From Mahart where Innovation, Money and power Collie in Silicon Vallet NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Live from New York and San Francisco. This is Bloomberg Technology coming up, Big Tech on Deck, Alphabet, AMD, Reddit after the bell, will talk you through what to.
Expect and so Fi just came out with their own earnings. This morning, We're gonna speak with the ceo.
OUs shares of Trump media surge again getting briefly suspended amid the volatility. We discussed the election impact across assets, but first we check on the markets and I daral into what some say is indeed a Trump trade. Bitcoin powering ever higher, up another three percent. In fact, we're training at the highest since March of this year. What happened in March of this year, a record high. We
clip the seventy four thousand number. Of course, we hit just below that back in March of twenty twenty four. We're up three percent, and all of this being thought of is ultimately risk on many feeling that potentially this is a signal of a Trump trade, but also option signaling. Look, it's going to eighty thousand in November, no matter what the election outcome.
But and you're looking at the.
Micro yeah, there's a lot of headlines that's hit in the last hour or so. Tesla has seen a lot of volatility. Elon Musk, speaking in Saudi Arabia at FII and on the Trump trade, he said that actually, if Trump gets to office, he's more optimistic his lofty goals for SpaceX and Tesla will happen.
We'll get to that later in the program.
PayPal gave us guidance for the fourth quarter that missed expectations. We will dig into that later in the show. The stock on track for its biggest drop since February, and big tech in ernest right, I think Alphabet, the parent of Google, is the main focus. It's not just the big AI name. But if you think about it in the stock context, Caro, it's been disappointing.
For many investors.
They want signs that all the money being spent on AI will translate that growth, particularly in cloud.
We should probably talk about that.
We should, and someone's been writing about exactly that, as well as all the companies of course that are set to report Reddit, AMD SNAP. We think of Google though in particular as ed was laying out there, maybe just trailing the magnificent seven piers because investors are trying to struggle to price in antitrust risks and.
Many others that confront the company.
Rand Rastelca is the guy who's been across this and that there has been the sideways movement of Alphabet's shares. How are people trying to think about any rosiness from the earnings dialing into the anti trust picture?
Good morning, Thanks for having me so, Yeah, those are the two major issues people are focused on right now. Most everyone I talked to remains pretty positive on Alphabet as far as its fundamentals go. It's been showing improved results in its cloud business. Advertising seems to be fairly strong, which is of course key for the company search business. But you do have the anti trust the regulatory picture.
There's been some rulings against the company and people aren't quite yet sure how to you know, price this impact, How severe is any punishment going to be? How long is this going to remain in overhang on the shares? What is the ultimate impact here? These are very unclear right now, and that is something that is you know, weighing on the stock right now. And kind of preventing it from participating in the games that you've seen in the other Max seven.
Stocks weighing on the stock and it could weigh at the index level.
Right. You were writing over the.
Weekend about how profit expectations for those MAG seven names reporting this week are still way beyond the S and P five hundred overall, but I think we're on track for our basically lowest quarter of VPS expansion in six quarters or something like that.
How high is the bar? Like, how braced are we for this week? Well, it's really a company by company kind of thing. In general, Like you said, earnings growth for the Max seven is extremely strong, much stronger than the overall market. But we have seen a deceleration in growth. And given how much these stocks have moved up this year, you have some of the major index components, Apple, Microsoft,
and so forth. These names are prett expensive rolled up to their history, which does suggest there is a high bar here. You have slowing growth, high multiples that leaves limited room for error.
All right, Bloombo's Ryan for Selica, You've got to check out his reporting before, during, and after the big tech earnings beat.
Thank you so much. Let's keep a conversation going with Jay.
Jacobs, head of Thematic and Active ETF at Black Rock, which manages an astonishing eleven point five trillion dollars in total for its clients, And same question to you. Alphabet's one name, But if you think about the broad basket of AI, hyperscaler, software, hardware, chip names that you track, how braced are you for this week starting with Google?
Well, we're looking much further than just individual names. We have identified artificial intelligence and digital disruption is a multi year, if not multi decade, mega force that's going to have
a tremendous impact on the economy and markets. So while earnings might have some directional information on how some of this investment from hyperscalers are going with the adoption of artificial intelligence, we're really looking three, five, ten years out to see the landscape shifting impact of artificial intelligence on the economy.
Jay Caro and I like looking to the horizon as much as anyone else. But when the hyperscalers talk about CAPEX, the market responds in all sorts of ways. You must be a little bit excited or a little bit nervous about the next twenty four hours.
Well, I think What will be interesting about all of this CAPEX, which could be almost a quarter of a trillion dollars, is that money is being spent on semiconductor companies. It's being spent on data centers, it's being spent on power infrastructure, and in some of our actively managed strategies
like BAI, which just launched a few days ago. It's really looking at that infrastructure layer of artificial intelligence, where all that CAPEX money is being spent to take advantage of the revenue opportunities that we see today in artificial intelligence.
It's interesting over in Saudi Arabia, many tech leaders, finance leaders are speaking Massa Yoshisan, one of them talking about how Nvidia is undervalued.
Now, Jay, I know you've thought a lot.
About ultimately the investment in the picks and shovels. Are we too obsessed with one or two names? Do we need to broaden out?
I think we are.
This is a much bigger story than just the mag seven and just a handful of names and artificial intelligence. We really look across the entire AI value chain or the AI tech stack to find opportunities. I would really bucket this in three layers. There's the AI infrastructure layer that I just mentioned. That's about the semiconductors, that's about the power infrastructure, It's about the data centers that are providing that physical backbones artificial intelligence. The mid layer has
also gotten a fair amount of attention. That's where the models, these large language models live, where a lot of the proprietary data lives. But then on top of that is the applications layer, and this is where we could see some of the most significant growth over the long term, which is really what are the companies that are embracing artificial intelligence to build revolutionary products and Apple cations.
And I think if you.
Look across that AI tech stack, there's a lot of opportunity that goes far beyond just the mag seven and that's why we believe active management can be really powerful and artificial intelligence to pick and choose those opportunities.
Let's talk there for about some of the latest CTF you've launched and those within them to give the exposure. How broad are the names and how geographically broad are they as well?
Is it all about the US?
So if you look at BAI, which is our Artificial Intelligence and Technology Actively Managed GTF, it is largely focused on the digital infrastructure layer right now, that's where we see some of the most immediate opportunity because of all of that capex spending by the hyperscalers. That's where the flows of dollars are going today and therefore kind of the most concrete part of the artificial intelligence opportunity. But it is a highly concentrated portfolio. It really only has
about thirty four companies in it. That is our portfolio managers really taking high conviction bets on which parts of AI are going to.
Succeed, and so by compared Garrison, TEK is broad is still right because you have the full spectrum of software through too hardware, even the semiconductor names in there. What I always think about JAY is like, take the semiconductor space right in the context of AI accelerators, Nvidia, Intel and am D all compete with one another, but they will see this very expansive and enduring market. Why is the function of an ETF important to get the full benefit of that?
Well, because this is again this says about an entire value chain of opportunity. On one hand, you want high conviction picks and the names that are going to win, but at the same time, it's not about one or two stocks in artificial intelligence, we believe the whole basket of stocks is going to benefit in the ETF like BAI delivers that very efficiently to investors.
Jay, you've spelled out your long term viewpoint. But in the short term we have earnings. We also have an election in the US. From your perspective, is that a moment to actively invest to change up the portfolio.
It can certainly introduce some volatility or uncertainty into the portfolio. But again, if we're looking thematically at artificial intelligence, this is an area where we see, you know, this is longer than an election. This is longer than just the next four years. Even this is something that's going to
play out over multiple decades. So near term volatility is really less important to thematic investors than what is the trajectory of artificial intelligence over the next several years, which we remain very bolish on.
J Jacobs moaning British heado thematic and active ETFs at black Plock, We thank you. Coming up, we'll take a look at the volatility around Trump media shares, so push ever higher this morning. The details and where you're looking at well.
Elon Musk participated in a surprise conversation at the Future Investment Initiative taking place in Riard to discuss the future of AI solar energy, but also why he thinks AMA's launch for Starship is more likely under a Trump presidency.
Listen to this.
I feel more optimistic about it with a Trump White House and an point House because the biggest impedimental progress that we're experiencing is regulatory is over regulation.
Shares of Trump Media, the operator of the True Social site, were suspended earlier today after they rose as much as twenty one percent in pre market trading.
Trading later resumed. What's going on, Let's.
Bring in Bloomberg's baby Lipshaltz. I think we get this idea that there's this thing called the Trump Trade and that DJT because it's the parent company of Trump's social media platform, Truth Social, is a part of that. But explain the specificity of what happened this morning. I don't get it.
Well, nothing makes sense and meanwhay.
So you have to go in understanding and acknowledging that the thing with Trump Media shares, given the fact that Donald Trump owns more about sixty percent of the stock, is that it typically trades closely with the betting odds. So we've been tracking a number of betting markets that have been shifting up into the right for Donald J.
Trump to return to the White House.
What we saw today with some of those volatility halls by Mike count it was about five of them to the up and downside is just simply an overwhelming amount of activity and volatility. We saw volumes about six times
of what's normal in the first hour. So when you see investors, whether that's retail traders who are pushing their investments on things like Reddit or True Social itself, or Wall Street professionals or even just auctions traders, that's what we can see with some of these wild swings to the up and downside, and just looking at today, it's really emblematic of what we've been tracking. When you even look back to when this spec deal was announced back in October twenty twenty one, it.
Has generally been up into the right. Even if there is volatility on an industry basis.
What two hundred and seventy two percent at least was the number we counted yesterday over the last five trading weeks, is it really the eye of the storm when it comes to the so called Trump trade. What are the names have been evolved in?
Meanwhile, it's the biggest one to keep an eye on, and it is really the most indicative. Obviously, it trades under DJT. That's Trump's initials, so the ticker symbol is actually that closely tied in a line with the former president.
We also keep an eye on Rumble.
They're a Peter telbacked video platform, typically skewing towards a more conservative audience, trying to also rally against big tech. The company is also in partnerships with Trump Media itself. We keep an eye on Funware, which really seems to be more of, at least when I talk to investors,
more of a gambling mechanism. It was associated with some of the past Trump campaigns, though doesn't appear to be tied towards the twenty twenty four re election campaign, but that also has gotten swept up in the shift as well.
Bailey, you wrote a story on October twenty fifth, which I appreciate seems like an eternity ago now that basically, if Trump wins, it's hard to see what happens next with True Social and DJT. But I think you were talking more about its business, Like, what do we know about this company as a company.
It operates and owns True Social, an X lookalike platform that is one of the many kind of places that Donald Trump will post.
We do know ed in the first.
Half they reported just about one point six million dollars in sales, so not profitable. One point six million in sales or revenue is a drop in the bucket relative to its multi billion dollar market evaluation. It has struggled to retain users. We've seen that with third party apps.
The company doesn't actually disclose those metrics. We will be closely keeping an eye on their third quarter results, which should be coming in the next few weeks, just in terms of what activity or at least what ad sales look like going into the election. But when I talk to some skeptics that they really call out the fact that all eyes right now are on Trump's re election campaign.
So if the company is struggling to get anywhere near training a profit and only had one point six million dollars in first half sales, the question going forward is how does that actually grow?
Bailey Lipshaw's we appreciate it, thank you.
Let's stick with politics because Jeff Bezos defended The Washington Post's decision to stop endorsing presidential candidates, saying there was a quote credibility gap afflicting the media industry and that endorsing a candidate would create a perception of bias, and the move by the billionaire owner of The Washington Post prompted as many as two hundred thousand subscribers to cancel.
That's according to MPR. Bloomberg's Mike Shepherd joins us to discuss, and Mike, I know you have a history what the Washington Post yourself, and just take us back in history. How long have they been saying that they support certain candidates.
Well, first my own history.
I did work at the Washington Post for twenty two years before joining Bloomberg in twenty eleven. So we do have some long standing ties to that newsroom and a lot of the good people that work there. And the history that the moss with endorsing candidates goes all the way back to when Jimmy Carter ran for the presidency.
So there is a history and a tradition. And one of the concerns among people who are close to the newsroom and even outside observers is that this carries the appearance, eleven days before the election, of not just stopping the practice of endorsements, but spiking an editorial that was intended to endorse Kamala Harris for the presidency. And this carries the appearance of doing exactly what Jeff Bezos is trying to avoid, or at least as he explained it during in his article yesterday.
Mike, just the basics here of why we're talking about this. Jeff Bezos the founder of Amazon, a high profile, an incredibly rich person in the world of technology, and he owns the Washington Post. Just take those basic facts and explain the significance of this action.
Well, the signific against cannot be overstated. And it is yet another twist and an election that has had a historic number of surprises already. And it even caught the
attention of Kamala Harris this morning. She was interviewed on the Breakfast Club syndicated radio program, calling it disappointing, but then also tying Jeff Bezos, the world's second second richest man after Elon Musk, to Donald Trump and other billionaires, saying, look, these are the people, the billionaires that Donald Trump is more likely to support. Rather than mainstream Americans. And we do see our own analysis here at Bloomberg indicates that
more billionaires have donated toward the Trump candidacy than non billionaires. Now, when it comes to the tech industry, we do see a little bit of a reversal of polarity. We do see more of the wealthy tech founders, especially people like Eric Schmidt and Bill Gates. They have thrown their lot in with Kamala Harris, but overall, Harris is using this moment to point to what she sees as billionaires leaning toward Donald Trump.
One billionaire just name checking Donald Trump over in Saudi Arabia, a live stream of Ela Masque, just speak to the impact that he's making.
Mike Well, his impact on the race cannot be overstated. First, it's financial. He has put more than one hundred and thirty two million dollars of his own money into a superpack that is backing Donald Trump.
But he is also putting in something.
That's very precious for a guy who's running five companies, and that is time. He has spent time on the campaign trail in Pennsylvania and other states. He has been with Donald Trump, including at the event in New York at Madison Square Garden on Sunday, and he is seeing in Donald Trump as he is seeing Donald Trump as someone who can clear the path for some of his own ventures and his own aspirations, including a trip to Mars.
And the President is being present former President Trump as if he were to make a return to office, someone who can clear the path when it comes to regulations.
Yeah, that's the soundbit that we played early to Stay of Blowburg's Michael Shepard. Thank you very much. It's time for talking tech and first start. Indian food delivery platform Swiggy is seeking to sell shares for an IPO that may raise one point three five billion dollars.
According to sources, The IPO will open for.
Bids from November sixth and shares he expected to start trading from November thirteen. Swingy's IPO follows Hyundai India's recent record sale. Plus, Toshiba wants to reach double digit market share in the world's power chip market by twenty thirty as it lags behind rivals.
Toshiba may eventually form.
An alliance of companies that would corner thirty percent of the industry. According to one of his executives and over in Japan, Liberal Democratic Party heavyweight Akira Amari was defeated in the general election. It removes one from parliament, one of the chip sector's biggest advocates, while concerns have been growing over the amount of taxpayer money getting plowed into that industry.
Of caroline.
In other international chip news and the Biden administration finalized restrictions on investments by US individuals and companies into Chinese technology, including semiconductors, quantum computing, artificial intelligence. Of course, Bloomberg's Mackenzie Hawkins is here with more and this was long in the making.
Just what is new in terms of these policies.
So this is sort of the last big shoot to drop from the Biden Administration's restrictions on Chinese advanced tech development. We've said a lot of time on the show talking about export controls, restrictions on the sale of actual chips and ship making components to companies in China. This is restrictions on investments by American individuals and companies into Chinese AI chip and quantum computing companies. The rules have been
in the works for over a year. There was originally fears that the investment restrictions would cover a broader swath of industries, but officials say they're aiming for a narrowly targeted approach looking at technologies that are key to US and Chinese national security.
It's been some time, I think, since we've discussed the sector in these terms. But the target is American mutual funds, large venture capital firms, other technology companies that want to get a placehold on some of China's tech. Right, I'm trying to understand McKenzie, who would be subject to these controls?
Right?
So there are exemptions for certain types of investments, such as publicly traded securities or certain limited partner investments, but the goal is really to capture American capital and then know how that officials say comes with American capital going
into early stage investments in Chinese startups. So, you know, officials brief reporters on there were frictions before they were formally announced, and they pointed to a report by a think tank based here which found that between twenty fifteen and twenty twenty one, of all of the global transactions investing in Chinese AI companies, seventeen percent involved American investors, and of that around nine and ten were at the
venture capital stage. So that's the type of investment that officials are aiming to capture with these rules.
The Chinese Foreign Ministry spokesman saying his nation strongly deplodes, infirmly rejects these new US restrictions. They didn't come into force briefly until January the second.
Is there any way that these could be subject to change? Mackenzie?
So this is sort of the last leg of what has been a very long rulemaking process, and this is a final rule. So it's highly, highly unlikely that things would change between now and January. Tewod. They wouldn't only investments going forward.
It's not a retroactive policy, Megs.
Mackenzie Holkins. Wait, thank you, Welcome back to Blue Meg Technology. I'm Caroline Hyde in.
New York and I'm me d love Lo in San Francisco.
Quick check on these markets, because while we're pushing higher on the Nastack and then Astak one hundred, we're up about five ten percent now, so near trading highs of the day and in fact training highs. Ever, because we are close about two hundred points on the NASAK one hundred to its record high set back in July.
So we keep an eye on those numbers.
We want to dig into some of the individual movers because we are thick and fast and earning season and really Cadence Design Systems doing particularly well, having its best day since March of twenty twenty, up eleven percent. It's numbers coming in strong, it's revenue posting growth of about nineteen percent, and it's all about Cadence dot AI basically in the design workflow artificial intelligence now integral, says the CEO.
We're seeing AMD.
We're going to see the numbers after the bell, and look, we're pretty buoyant and running into them more than two percent higher. The question is AI accelerators. Are they managing to make inroads on Nvidia and how much of the market share and they manage to take from the likes
of Intel. When it comes to the BC and it comes to as the server business, PayPal look disappoints, even though we saw the third quarter fiscal third quarter do well in terms of profits on the revenue forecast, disappointed and the shares have run up into these earnings well by about five percent.
Ed.
What have you got?
Some other headlines in the last thirty minutes. Apples overhauled the design of its Mac Mini desktop computer for the first time in about fifteen years, cutting the device's size to five inches across and adding a Speedia M four chip series doing Bose Mark German joins us in San Francisco. This is kind of consistent, right with what Apple is doing with new gen of different hardware, platform size and then updating the processor.
What else do we know?
Yeah, it's quite interesting.
So last year this time they held an event called Scary Fast timed around Halloween. They launched the three new chips, a bunch of new Macs, but it was a thirty minute kino and it's sort of disappeared, as you will, on Halloween right after that. This time around, they're doing three launches three days in a row. Yesterday Monday was the iMac with the M four, Today is the Mac Mini with the M four and M four Pro. Tomorrow will be the new MacBook pros at the M four,
M four Pro and M four Max. This new Mac Mini looks extremely impressive. It's probably the most impressive new mac that I've seen from them since the current MacBook Pro design launched three years ago. Two inches tall, five inches across, super cool, super powerful two ports on the front, now matching the Mac.
Studio as you reported, would be the case.
I think this is going to be a very hot seller. People like to use these to connect them to TVs gaming setups, and they're also extremely popular in the enterprise and in server environment. So this is a nice launch for Apple, a.
Nice launch and necessary when you're baking in the markets expectations to growth at this company. We had key Bank, the analyst there last week saying, look, we very rarely have geographical growth and every product growing in terms of revenue, but the market seems to be baking that in mark How.
Likely is it that we're going to see such growth do you think.
Well, well, the Mac Mini is only going to be a very incremental part of that.
Right.
They'll generate sales here, but probably they'll sell maybe a billion dollar worth of these tops through the end of the year, maybe even a little bit less than that. So this is not a super material.
Launch for them.
It's really a cool launch that gets people in the Mac community really interested. It sets up the design for this product, hopefully not for the next fifteen years like the last design, but certainly this is a nice launch for them. But it's not important from a financial standpoint, like let's say a new iPhone or iPad mark.
Overnight, our colleagues in India reported some interesting numbers about exports from that country for Apple, So not necessarily the end market, but what they're doing there and then selling to the world.
What do we know?
India's becoming an increasingly important part of the overall Apple story in terms of production and in terms of sales. I think you're a one day going to see more product development happen there as well if you have some engineering labs, particularly for maps testing there as well. So India is incrementally becoming a bigger part of the Apple story. I don't think they're ever going to drop China totally, but they're inching towards India becoming the new China.
Al German, we thank you. Let's turn our attention to Netflix now. It's in talks to release Gretagog's upcoming remake of the Chronicles of Narnia on Imax screams globally. This would be one of these streaming platform's biggest business deals with cinemas.
According to sources. Let's bring in mus Lucas.
Shore and they have done it before, but this would once again be sort of an interesting area for them to push.
Yeah, like Netflix has largely embraced movie theaters when they have worked with filmmakers that want that. Think about Martin Scorsese with The Irishman or Alfonso Corone with Roma.
You know this is no different.
Greta Gerwig coming off of Barbie has a lot of clout in the Hollywod community. Netflix was very excited to get her to adapt the sort of legendary series of children's books. But she wants to see those movies in theaters, and so Netflix is going to try to work with her without sort of violating its beliefs about putting movies in its on its screens and on as streaming service prompt for its customers.
Lucas, I don't think we've ever had the chance to discuss this with you, but basically, how does Hollywood see.
Netflix in this field of like big fiction?
I think about Rebel Moon and Atlas Jennifer Lopez, like, personally those were great, but I guess they want big hits the world over Narnia.
Well, Atlas actually was a reasonable hit.
I mean I think, yeah, you're right that Netflix has tried a lot with these sort of world building science fiction projects, largely because it doesn't sit on a trove of historical intellectual property like Disney and Warner Brothers and other studios do, so it's had to invest a lot more in original properties when it has gone outside of that and tried to buy ip that it could use, like it did a deal with the did a deal with a royal doll.
Now it's not this Narnia. I mean, look, it could work. I don't know.
Their track record on the quality of those movies, I'd say is sort of mid to poor, but people do tend to watch them, just because people watch whatever's on Netflix that has a big budget Netflix puts in front of them.
Well said, it's interesting what they lose because of not always going for the big screen. Emerald Fanal for example, Hernie Wuthering Heights.
They didn't want to.
Go in Netflix because of this. So is IMAX going to satisfy Greta Gerwig?
Do you think?
Yeah?
I think it'll satisfy her for this project.
You know, I don't think Greta.
Gerwig will want to make all of her movies at Netflix or her next several movies at Netflix. You know, I could be wrong, obviously, if this becomes a huge success and she wants to do it again, she could. But what we've tended to see is big name filmmakers like Greta Gerwig, like Alfonso Corone, they want to see their movies and theaters and so they will mostly do that.
But if there's a project that they are particularly drawn to or that no other studio will make and Netflix will step forward, they'll do it, and especially because Netflix will often satisfy the budgetary requirements that they have or want. But it's sort of a you know, a temporary waystation for a lot of these big filmmakers and not a home, whereas Christopher Nolan, for example, another filmmaker, likes to find a home.
Right.
He was at Warner Brothers for several years. Now it seems like he's going to be at Universal for the foreseeable future.
Well, they've got money spend what is it, at least one hundred and seventy five million on this Narnia one, Lucas, Sure, we thank you.
Ed Yeah.
Coming up on the show, how a Spanish brain computer interface company is taken on Neuralink.
That's why we're looking forward to Carro.
Yeah, meanwhile, what's in a here and now ed bitcoin crypto? You've been keeping it close on it, as we all have.
Look.
At one point it touched seventy two thousand dollars. We haven't done that since April, but we are very close to the record high setback in March of this year, which is close to seventy four thousand dollars.
Just under it.
Well we get there. We're up three percent.
Options traders think it's going to get to eighty thousand come what may in the election by the end of November. This is Blomberg Technology. We hear a lot about Elo Musque's brain computer startup Neuralink, but it is far from being the only player in the field.
Take in Brain.
It's a European company building devices that could one day treat neurological disorders like Parkinson's disease.
The startup just announced today that it's.
Raised fifty million dollars to develop its graphic based mural technologies. Let's bring in the CEO co founder, Carolina Aguila for more, and Carolina, just how soon might we see such things as Parkinson's and other diseases tackled?
And how.
Thank you, thank you for having me here and hello on New York. Well very soon, because we already treated two patients on our safety at study and last year we already obtained FDA breakthrough designation, so we actually provide to the FDA reasonable proof of superiority versus car and neuromolation. So it's I mean, this funding round, which is significant, is going to help us to get there in the next few years.
Let's go back to basics really quickly.
So synchron does this sort of intravenously with a stint neural link is the insertion of very very thin wires directly into the brain.
How does your technology work?
Yeah, well, it is a technology that it sits on the brain, on the cortex of the brain, and also has a deeper probe that it's inserted more into the basal ganglia and together, actually it's able to decode in a bidirectional communication with the brain specific biomarkers that are disrupted in diseases like Parkinson's disease and actually restore such functions.
So we call it busy itherapeutics because this bi directional communication with the brain is actually able to decode so to read, but also right into their brain and actually restore the function.
We're showing a video which is demonstrating that right now. So fifty million dollars you know in your development process and scaling of the technology, where we deploy that money.
Yeah, these fans are extremely important to continue the clinical trials that we are now conducting. We are on boarding up to ten patients for this safety trial that also is going to show the superiority of graphine rescues current metals like platin idiom. To expand the team because we need very much excellent talent across boards. So we are developing the semiconductor process of the interfaces, but also the electronics,
the software, the artificial intelligence. So we have already sixty people, but we are missing some key pieces that would like to recruit and also to continue the platform development to the final pivotal that leads to the conversization.
So many people listening will be so excited at the idea that Parkinson's disease, that epilepsy, the strokes can in some way be tackled with this who from a venture community is excited to put the money in, whereas the ultimate return the reward for them when it comes to your own growth.
Well, we are seeing deep tech fans very, very interested on this field. I think in the past it's been a traditional healthcare metech BC driven world, and now dep tech, with the emergence of semiconductors, is also willing to chip in big time into the development of such ventures. The end, we're at the convergence of metech digital but also the semiconductor world now that chips act. It's fuel and also a lot of money.
In the US, but also in.
Europe, this community has bigger funds and is willing to make this happen.
Tarlina, what's the regulatory environment like for this in Europe relative I guess to the United States where we'll see this in the real world.
First, yeah, we are regulated by the medical device regulatory bodies, So for US it's very important to get, for instance, what we call a C mark. It's a very similar process to the one in the US. Whoever, I think in the US there's been a tremendous progress with FDA actually being extremely supportive with the FDA Breakthrough Designation program but also the TAP program that we belong to, and basically we are able to meet monthly FDA to discuss some of the hurdles and the questions that we have
in order to develop this conversization at the speed. So artificial intelligence is one of the subjects that we've been treating in the last months, month after months, and this is something that Europe still doesn't have. But I hope that it's coming soon because it's extremely useful for innovation and to not get people lost, which is also.
Waste of money in brain. CEO and co founder Caroline Aguila, thank you so much. Sofi Technology has raised its profit guidance for a third time this year. Is it benefited from efforts to expand beyond its student lending business here with Sofi and its results right now down seven percent. I think the bar was pretty high going into this. That that does put it on track for its biggest drop since August.
What's going on?
Let's ask the CEO, Anthony noto and Anthony, you know the story in the Court of Gone. It's kind of the result of the work you've put into so far doing more. Just explain that a little and where you're bearing fruit in sort of diversifying business lines right now?
Sure, First to your point about the stock the study is of about forty forty percent in the last month, So it came into the quarter after a very big increase in value over the last thirty days. So I think we're seeing some of that being taken off the table. But we had our best quarter as a public company. We had record revenue. The growth rate of the revenue
accelerated to thirty percent year of year. That growth was driven by sixty four percent year of year growth in our financial services and our technology platform revenue taken as one, that now accounts for forty nine percent of our total revenue. And so we're not just a lender anymore, is the key message. And this is a historic day for us.
Not only is it historic revenue, but we're to that fifty to fifty split between lending and mind lending that we wanted to drive to to really continue to diverse fire revenue. We've been able to overcome a really tumultuous environment over the last five years to deliver seventeen quarters of consecutive seventeen quarters of record revenue growth and improving profitability, and we finally got to the point where the business is fifty to fifty, which is right where we.
Wanted to be.
The strength is really driven by the frigal services products growing thirty seven percent year of a year, and that's driving the revenue growth that I mentioned.
Part of this sort of slow down response in the stock I think is some investors looking at your comments about balance sheet growth longer term low single digit growth.
What would you be a response to that? Please?
We want to grow our revenue twenty to twenty five percent compounded annually, so there's a lot of different drivers to get there. We do not necessarily need to grow a balance sheet at that rate, and in fact, we don't plan to grow a balance sheet at that rate. We've made a migration to more fee based revenue streams that are capital light in high ROI. This was our
first large quarter of generating loan platform business revenue. It's a business we've been in since twenty nineteen, but it was a big contributor to both our growth and revenue as well as profitability. So we don't need to grow the balance sheet faster than it has been growing. In fact, we want to take risk off the table and leverage the other pieces of our businesses or other pieces of
our business that are fee based. In the core, about one hundred and seventy five million dollars of our revenue was from fee based revenue and growing a meaningful amount year of year.
Let's just talk about putting that lever and indeed a sixty four percent jump in the financial services and the tech platform segments. Where else can you invest there to ensure that sixty four percent is something you continue sure.
Within the financial services segment, we have several businesses. We have our Sofi Money business, which is benefiting from a high interest rate. We're seeing great growth in deposits two point four billion dollars of member deposit growth, really strong spending annualized ten billion dollars of spending, and so we'll continue to grow that member base at a really high clip. Second is our invest business. It's also growing meaningfully year year.
We also have our credit card business, and of course our business that provides referrals to other financial services product which we call Lantern. And then as I mentioned, the loan platform business. That business itself grew over one hundred percent year of year and it's annualizing now to billion dollars with really strong improvement and profitability. So we'll keep
driving product and member growth in that business. In the thirty plus percent range, and that will then follow with revenue growth at are above that level over time.
Talk to us about the macro, because you're saying to investors you feel really good about the current environment, that headwinds and dissipated anything.
That worries you.
I mean, we're all still bracing for an election, and that feels like quite a lot of lack of transparency.
Yeah.
I do think there's still a degree of uncertainty out there, but I think the trends are clear that we're going into a declining rate environment versus an increasing rate environment and a declining rate environment. We have several businesses that will benefit meaningfully. Our home loans business will benefit from more financing. Our student loan refinance and business will allow people to refinance their student loans at a lower rate in a lower rate environment, and so those businesses will
have a tailwind for sure. In addition to that, as rates come down, the rates that other competitive banks are offering their members or their clients will also come down, and we will be able to maintain a super your rate compared to them because we also own the lending origination platform, so we can use the two of them as a competitive advantage. To drive a better apy than our competitors broadly defined. And then lastly, within that business,
our credit card business. We just launched two new credit cards that we think uniquely meet the needs of our members that have a lot of growth prospects behind them as well.
Anthony, what's your M and A plan from here? For things you don't already have.
We're heads down. We're not focused on M and A at all. We're not focused on capital raises. We're focused on growing our business organically twenty to twenty five percent in revenue on a year of your basis balance sheet growing much slower than that, and continue to build unaided brand awareness. Our unaated brand awareness is a key to become a household brand name. It's a key to become a trusted partner in a business where people have to
trust you to give give you their money. And we've driven that up forty percent year of year to seven percent. Our goals to get it into the thirty percent range. We're well in our way and making great progress.
Have you got any worries about the consumer at this point? Anthony? And consumer credit quality?
Sure, our credit has actually continued to improve. We saw a peak and credit normalization in Q one, and it's gotten better each quarter since then. That said, you know, we're very vigilant and making sure that we think will be in a stable economy. Declining rates with a recession would not be great. Declining rates with a stable economy would be great. And that's what our current forecast has for twenty five.
And see we literally have thirty seconds the election. How are you brace for it?
You know, we can work with whatever administration we have. There are different characteristic of the administration that could be more favorable for our business. I would say generally, more favorable capital markets would be welcomed. More favorable treatment towards businesses would also be welcomed. There's a lot of opportunity that sometimes gets stifled by different approaches as it relates to capital markets, to M and A from the different agencies.
So we're looking for a good balanced approach from whatever administration wins. But we're prepared to work with both ends of the aisle.
So FI CEO Anthony Notta, thank you so much for joining us on your earnings.
We appreciate it now.
That does it for a very busy edition of Bloomberg Technology and more earnings coming thick and fast after the ballot.
Yeah, that was a good way of ending it though.
A really interesting conversation recap on the podcast. You know where to find the pods online on all the platforms you'd expect. It is going to be a massive week the megacap Tech earnings starting Earnest Affter the Bell from the team in New York City and the team out here in San Francisco.
Stay with us this week. This is Bloomberg Technology