Stocks Plunge and Coinbase Slashes 18% of its Workforce

throw the US into a recession. Plus, it is another sign of a worsening crypto downturn, coin Based announcing it'll layoff of its workforce, following other crypto companies that are also cutting staff. And my excloulsive interview with Cisco CEO Chuck Robbins on where he sees the economy headed and how the company is navigating the downturn and supply chain an He'll join me in an exclusive interview later this hour. I do want to dive deeper now into the markets

as we wait for the Fed's decision Wednesday. Leo Kelly, CEO of Verden's Capital Advisors, joining us now to discuss. So, what are you expecting from the FED tomorrow, Leo, and how is that impacting your strategy? Well, the FED has to be aggressive there's no question about it. They are well behind the curve. They have been for some time. We never really brought into the transitory inflation nonsense, and this has gotten far beyond anyone's expectations. So our expectation

is they act aggressively for the first time. While I think we all want them to take it carefully and slowly, the reality is they will do more damage if they're not aggressive then if they don't. So um, we think the FED is aggressive. We think the market expects that. I don't know that tomorrow is going to impact our

long term strategy regardless. It's really about the trend, the trend of inflation and prices, the trend of interest rates, which we think are breaking a secular forty year bowl market and starting to turn into a secular long term bear market for bonds. So there's a lot happening right now, and the FED is just one piece of that puzzle. Why don't see the biggest risks in tech specifically, Well,

it's like specifically. The problem is is there's still a lot of speculation um to wear out speculation in any market, in any bubble type market, and when we look around at things like crypto or we look at stay at home stocks. Back in the uh COVID years, there was tremendous speculation. There's tremendous stories, and it takes time and it takes multiple um let's just say shots at that

speculation before you wind it completely out. So more than likely what you see is you see these massive downturns. You probably get some over sold recoveries, but then you return back and until you get the last bit of hope out of the market, you don't see actual bottoms. Um. There was a great there was a great statistic. I just heard uh in the in the introduction that these companies have cash flow, and so this may be a little different. I would say, back in the dot com bubble,

Microsoft had cash flow, Cisco had cash flow. If you look at something like Cisco, um, it was at about ninety dollars at the top of the dot com bubble, got to nine, which was well below what its fair value was, and it took decades for it to come back before we started see reasonable prices. So interesting, I think tech you have to be careful with interesting that you use Cisco as an example, because I'm going to speak to Chuck Robins, the CEO of Cisco later this hour.

I also spoke to Amazon CEO Andy Jassey last week we spoke about the economy, his thoughts on rising inflation. Take a listen to what he had to say. I think the real challenge for us there is on the cost side. And there have been several things that have happened, um, some of which are more controllable than others. You know, I think the part that's less controllable is really around inflation. And I think we thought that inflation would start to attenuate in two and with the war in Ukraine, it

just went the other way and has significantly accelerated. You've got these massive companies like Amazon that have no control over where these numbers are going. You know, what do you think the long term impact is going to be on a company like Amazon and other companies that you know, rely on the health of the consumer. So history shows us that when the cost of capital exceeds the return

on invested capital, we go into a recession. And the cost of capital is rising rapidly, and so we're going to see a significant profit recession in the marketplace from companies like an Amazon and many others. And so if you're not inflation sensitive. This is going to be serious pressure on earning. So some of these reliable growth companies that have steadied growth patterns are going to start to see those patterns get disrupted and that's going to affect

PE multiples. The reality is with inflation that um, we have it. It's accelerating and one of the reasons is we're not addressing the problem. We have to go to the core of the problem of inflation, and until we do that, inflation will continue to surprise us. We cannot answer a supply side inflation event with more demand, and so far that has been the method of replacing and repairing inflation. So the Fed has to get aggressive and we cannot afford policy hours coming out of Washington that

stimulate more demand. I mean, that's the bottom line for inflation. All right, Lots to continue to watch Leo Kelly Verdon's Capital Advisers, thank you for giving us your input there. Well. For the first time since agreeing to buy Twitter, Elon Musk will address Twitter employees on Thursday. He'll speak virtually at a company wide meeting and to take questions. Twitter has been in a chaotic state since the deal came

together in April. While Musk has a passionate contingent of employees who support to take over, another contingent is openly critical. Some employees frustrated by Musk's ongoing questions about spam bots and I think it's Musk's attempt to renegotiate his forty four billion dollar deal. Twitter executives, however, have told employees they plan to enforce the agreement. Coming up is the future of streaming sports. We're gonna talk Apple, Disney, Netflix,

and the future of streaming with Rich Greenfield. Up next, this is Bloomberg. As Netflix looks to turn around an already rough year, it is hoping Squid Game will be its savior. Just days after announcing the second season of its most popular series of all times, Netflix is now turning it into a reality competition. It is called Old

squid Game. The Challenge and the streaming service boasts that will have not only the largest cast in reality TV history, but also the biggest lumpsome cash prize four dred fifties. Six real players will hope to win four point five six million dollars. If you've seen the show, you know the significance of that number. But unlike the original series. There won't be any gore, they say. With the worst fate,

anyone will face going home empty handed. While Apple is betting big on sports, the company just signed a ten year deal to exclusively stream Major League Soccer on Apple TV beginning Back in March, Apple reach a deal with Major League Baseball to air Friday night games also on Apple TV. This deal coming just one day after Disney lost out on a bidding war for the streaming rights to the popular Indian Premier League. Rich Greenfield of Light

Shed partners with us now to discuss it all. And if you're a baseball fan, you know having those Friday sports rights are pretty important. Sport's gonna be the next big streaming differentiator or z big streaming differentiator now. I think the reality is all of these streaming platforms are realizing just how difficult it is not just to attract subscribers, but to re engage them and to make sure they

don't turn emily. And it's it's hard, right. There's a reason why Netflix spends seventeen billion dollars a year on content. It's not like they do it because they want to spend too much money and they just toss and burn capital. The reality is the difference between the old cable days that you and I grew up on. Remember you wanted to cancel your cable service like you had a literally call up Comcast or back in the daytime winner cable, you probably spent the better part of your day on

hold being transferred around to departments. If you actually got through the retention department and tried to quit or cancel, then you had to go return your equipment and stand in line like it was being tortured. Now, if you want to cancel a service, it's point and click and cancel, and you can sign right back up a few days later. So I think in many way, sports is being used as a tool that all of these companies are looking at to bring in new subscribers and to retain existing subscribers.

And I don't think any of these will be all sports. I think that's a very hard business model, and I think it's one of the reasons ESPN hasn't converted to over the top yet. But I do think that they're all looking at sports as yet another tool to drive subscribers and retain existing ones. How big a deal is Apple picking up Major League Soccer or Disney losing out on cricket. Do you see these wins and losses as you know more um you know, you know, not necessarily

big deals. I think Apple is a huge deal. I think every single person that invests in looks at the media space or runs a media company should be thinking about what Apple is doing. Because you know, the only thing holding the traditional media bundle, big video bundles, cable and broadcast networks. The only thing holding these bundles together, Emily, is sports. All the best entertainment programming. Think about it. Name one big own new show that's aired on linear

TV in years. Like everything is now starting its life on streaming. I don't care whether we're talking about squid Games, which you just talked about, or Mandalorian on Disney or Murderers in the Building on Who. Like, everything is happening on streaming. So the only thing sort of left has been sports. And yet look what's just happened. Amazon has just taken the number two TV series on linear TV broadcast TV in Thursday Night Football this fall only on

Amazon Crime. And then you see this deal with MLS today, like you're just every day the last pieces that are holding together the TV bundle are being stripped away, and that means two things. One more and more chord cutting, less and less viewership for these TV programs. And all of that means, you know, the bottom line is that these legacy media companies are facing more and more pressure because most of them are built around broadcasting cable networks.

It's gonna be very hard. How much M and A do you think we're gonna see? I know you you don't think good in the Netflix Roku deal is going to happen? Do you say there's a zero percent chance? Look, I hate zeros um. You know I've learned never to I've learned never to say never. I mean, I think if we had been on here six or you know, if you said eight weeks ago, is Netflix gonna do advertising? I would have said there's no chance. So you should

never say never. Everything is up for debate. I think the odds of Netflix buying roke wu are very hard to imagine. Why would you want to be in the device business? I think, you know, Netflix benefits from being a voweble on every device and not competing. Buying Roku would put them into you know, battling against companies like Samsung in video and that's just very hard for me to believe. And I think Netflix is very focused on

sort of an asset light approach, initially advertising outsourcing. There was a story out today that they may be doing this as the information reported they may be looking at using comcasts freewheel product. We think that makes a tremendous amount of sense. And look, they're going to connect into lots of platforms and use lots of players. They'll work with Roku's, they'll work with trade desks. But I'd be very surprised if Netflix was going to go out and

make a very significant acquisition. That's just not their style at all. They are turning this squid game success into a reality competition. What are your thoughts on that? I mean is right now the cultural is now, culturally the right time for a competition like this, with the world melting down. If you if you watch sweed games, the sort of the depressive nature of the world, it sort of feels like the right time for a squid game reality series, to be honest. But but leave that aside,

I think you're bringing up a greater issue. Netflix isn't broken. None of the streaming services are broken, per se. That the reality is it's all about content. Consumers are going to gravitate to the services where they spend the most time and where they have the most content that keeps them entertained. And you know, the reality is Netflix still is by far and away the biggest service of all

time spent on connected TVs is on Netflix. But I do think they need more iconic shows, and Stranger Things has been huge coming back. All four seasons were the top four most watch shows on Netflix a couple of weeks ago, So there's no doubt that franchise zeitgeist content is critical, and I think that's why you're seeing Netflix lean into doing more, not just a second season of Squid Games, but how can they build this franchise even broader.

I think that makes a lot of sense, and I think you're gonna see Netflix pivot from having instead of just volume of series, really making sure that they have a good number of series that really are zeitgeist and really water cooler conversation that create the buzz that they need. I think they haven't had enough of that, and that's part of the reason why they've suffered over the course

of the last couple of quarters. We've seen a few Disney stories over the last week, you know, more sort of Game of Thrones, Chapec firing Peter Rice has head of Content. Apparently it only took seven minutes. How optimistic right now are you about SPEX leadership and the culture he is trying to create given the channel in is that he's faced. Look, Shape came in at a very hard time, right right right in the middle of the pandemic.

Was no easy task. The theme park business was just you know, sort of he was very much behind before he became CEO. Is obviously having an incredible resurgence. They literally can't keep up with demand and they're raising price. But I think the real question for for Schapeck is what is his plan? You know, is ESPN and sports the future. Clearly they just bowed out of sports on streaming in India as you brought up the I p L rights went to Viacom, a team which is owned

by Reliance Geo and James Murdoch and others. But you know, certainly bowing out of digital or streaming in India is a big deal, and it sort of points at this larger existential question for Shape of like what is the future of Disney is it about Disney Studios, the meaning the film studio and the TV studio, the theme parks and Sumer product which all really worked well together. Do they need to be in the ABC broadcast TV business? Do they need to be in the ESPN and f

X business? Like, I think there's some very big decisions for Shaping, and I think we're all waiting. I mean, the reality is is there a future for Hulu or do they just put more and more of that content onto Disney Plus. Like there are some really big structural decisions. Maybe that's what the board is waiting for, to sort of see what the ultimate what Disney ultimately looks like. I will say I was surprised the board came out with a comment sort of endorsing um Shaping, but didn't

just renew his contracts. His contract expires in February. I'm not sure what they're waiting for, like either renewest contract or tell us they're bringing in a new CEO. It does seem strange that we're sort of sitting here waiting to figure out what happens next. The stocks obviously suffered, but the whole group is down substantially. I think investors really want to know what is the structural future of Disney, what are the assets that are they keeping, what assets

are they getting rid of? And we really haven't gotten that sense from Disney over the last six months. Yeah, it was certainly interesting to hear from the board, but you make a very good point, like rich Greenfield always going to have your rich thank you stopping by Investor without Coast. Leve believes we will have a techno economic war over the next twenty years, most likely between the US and China. He talked about tech valuations and what it takes to be a VC on this week's episode

of Bloomberg Wealth with David Rubenstein. Well, we high look at it is what is the underlying innovation that's going on, and how large a market is it addressing. If it's large, then the valuations will look large. If you look at it Google, it's it's a great valuation. I'm I would think it'd come back, but it's a twenty some percent growth company, not a fifty percent growth company. The early stages of much most venture would be considered low growth.

When you in that world and you're addressing large markets, you have a proprietary advantage, then the valuation metrics are very, very different and traditional valuation approaches don't really work, but continuing to apply them as companies mature is a mistake and is the deal valuation so high that it's gonna be hard for people to get the returns that they want at a venture investing. So I do think given the hype we've seen the last five years, we will

see a decline and returns. Uh not for everybody. The good firms continue to be disciplined about valuations, but I do think in general for the industry will see a decline. The best firms will still do well. So coastal ventures will do okay, I hope. So we have to earn our keep the coastala there. With David Rubinstein, Welcomeack to Bloomberg Technology and Emily changing San Francisco stocks, Folly even further on fears that the FEDS aggressive policies to fight

inflation will throw the US into a recession. Is this rightful cause for alarm? Where are we headed for the next half of the year. I want to get into all of this and more with Chuck Robin, CEO of Cisco, who is joining us now from Cisco Live two in Las Vegas, the company's first in person conference in two years. Chuck, it's great to have you back here on the show. How's it going bring us the atmosphere from the floor. How does it feel to be back in person? Well, Emily,

thanks for having me. And you know, we we're saying this week we're putting the live back in Cisco Live. We've got sixteen thousand of our closest friends here, we have a lot of our partners back here that are demonstrating. There's lots of education going on. We had a slew of great product announcements this week, and so I think everybody is just as you would expect, excited to be together in person. I think everybody's been longing for it.

And a joke today that we're so glad that we're not doing this over video and it's still room somewhere where we're getting no feedback. So it's a lot of energy. Now. Cisco has always been considered a bell weather for the economy, and I have to wonder what your customers are telling you and how inflation and what's happening in the markets

is impacting how they're spending. You know, we talked today with our customers and partners here about the fact that over the last five or six years, we've dealt with a global trade war and terrorists, We've dealt with a pandemic, We've dealt with social justice issues, We've dealt with supply chain issues, we have a war in Ukraine, we have inflation.

So our our customers, while it's not the new normal, I think they're dealing with the reality that there's always something going on in the world, and technology has proven to be so effective during the pandemic at keeping the global economy and the global productivity at a great level that I think technology is going to remain strategic for our customers. And to them say they're they're powering ahead. So we'll see. Elon Musk says he has a super

bad feeling about the economy. Jamie Diamond said he's preparing for an economic hurricane. How does Chuck Robbins feel, Well, I remain optimistic, but I'm thinking specifically about the importance of technology to our customers and how looks like we lost Chuck Robbins. They're joining us from Cisco Live two will work to get his shot back up. We're seeing sentiment at pretty much an all time low. I don't think I've ever seen people, uh, you know, feeling this

negative about the industry. All of that said, there are still plenty of crypto firms that are hiring. Um you know that we're seeing layoffs for sure, but the sort of or ideology that powers this movement is intact. That was Nick Carter, founding partner at Castle Line Adventures earlier on Bloomberg. Now, the dual crisis of Terra and Celsius shaking up defy in ways that may have very serious

repercussions for the crypto markets. I want to talk about all that and more with our crypto contributor Shinali Bossic and with Sheila Lawren, CEO of the Crypto Council for Innovation. Sheila, great to have you here in person. So, look, there's chaos in crypto markets, in markets more broadly, but especially in the crypto markets. Just how how low are we going to go here? Where's the bottom? Well, it's it's hard to know, it's impossible to know. But we are

seeing real world consequences. We're seeing real job loss affecting real people. We're seeing real people losing real money. And that's in the context, of course of record high inflation, erosion of purchasing power for families. So all at all, it's it's it's not a great picture. That being said, as you noted, it's hardly were hardly immune. It's hardly just the crypto market being affected here. It's really a

much broader global economy melt down. So we you see coin based first to hiring, freeze, now slashing of its workforce. This on the back of the stock plummeting. What's your reaction, our reactions that were in a contraction phase. There are other firms who are hiring. There's a lot going on in the market that's adjacent to crypto as well, And I think what we're seeing is a pivot towards core principles and ideologies. Building a brand new financial and technology

ecosystem is not easy. It takes stamina, and I think if I were new to this industry, I would be nervous. But over the six and seven years i've been here, I've seen a bunch of these cycles come and go, and so I think that what we're just seeing is again and refocusing on street priorities. And my hope is that we're going to come out of this the way we have before. You know, you had mentioned real people losing real money, and I want to steal your former

lawyer hat for a second. I mean, how does the SEC look at something like this and want to protect investors after so much money has already been lost. Well, Frank, that's source of frustration I think for the industry is that we really have been looking to agencies. The industry has been been calling this for this for quite some time, to say, we do need the ability to distinguish some of the scams that do exist us in this space

from the very legitimate projects that also exist. And instead, what we're seeing is intense litigation enforcement actions against legitimate actors for relatively minor kinds of infractions rather than some sort of clarity, which is what the industry really needs. So I have to say, wearing a lawyer hat, I'm not super thrilled about what what the engagement we're getting from the agencies that are here to really support and help all of us. We needed that lack of clarity.

How much of a hangover does that give the ecosystem when you don't know what you can build? How do you then invest in projects when when you don't know what's possible. Well, I think that's exactly right. And what we're kind of seeing a response to you right now is where there is this high degree of uncertainty on what is going to eventually be kosher, you know, to have built and to have engaged with with people aren't

sure what to do. And we've been again, we've been asking for many years for guard rails, for guidelines on how to engage. We want to work collaborately with regulation and with policymakers, and you know, in some cases that's happening. We are seeing a lot of support from the legislative side of the house. We are seeing an approach a center to run and Lumus had their recent bill that

kind of trying to clarify c FCC SEC jurisdiction. A lot of engagement abroad from the Europeans, from from APAC countries seeing this, but here, you know, the SEC maybe not taking quite the same approach. Well, I'm sure there's lawmakers who are looking at what's happened with Tera and looking at what's happened with Celsius and are like, I

don't know about any of this anymore. I mean, you know, these are companies that and and and you know, um, you know, structures that seem to be very legitimate but are having major issues. What do you say to reassure them? Well, I think it's not actually not that hard to differentiate some of these things from other things. Right, there's a reason Celsius has a particular lending platform they were engaged

with unclear to me and maybe to others. Maybe others know whether they are what kind of insolvency we're seeing here is this cash flow insolvency is and balance sheet insolvency. But I think there's a reason that coin Based, for example, scrapped it's lending right kind of said it's not the right time. We don't have regulatory clarity that we need to see around some of that engagement. As far as Tara, it's a pretty highly dif for initiated algorithmic stable coin.

It does not flect the broader crypto ecosystem in any kind of meaningful way. So I do think the thing to note is that education is really important here. Crypto is not a monolith. Every crypto l one learn one platform has a very different approach to what it's thinking about doing. Every stable coin is different. The reserves are held differently, and all of that nuance is critically important for us to understand as we move towards more of

a regulation and policy environment. So what crypto projects are you most excited about? You know, where do you see legitimate, high potential. So I'm really excited about the ones that are focusing on real problems, solving real problems for real people. I think it's not a surprise We've seen crowdfunding of a wartime defense of Ukraine right in this environment. We've seen massive amounts of outlays to India during COVID relief.

We've seen examples where this institutions are we're really focusing on real problems. We also know that we've got one point seven billion people in the world without access to basic financial services. It's a massive gap the legacy institutions have not solved. So projects that are focusing in those places and understand that there's a gianic market there that needs to be at these basic baseline checking account kinds

of services. Those are the projects that I personally think you're gonna see longevity and stamina, and you're gonna see those emerge from this particular moment that we're in stronger than ever. All right, Crypto Council for Innovation CEO Sheila Warren, thanks for sharing your view on the landscape we are facing our own Chinali Bossi, Shinali, thank you for joining us as well. Coming back up, Chuck Robin, Cisco CEO once more from Cisco Live for more of that exclusive conversation.

He'll be with me next. This is Bloomberg. We're back now with Chuck Robbins, EO of Cisco and this week's Teconomics. Chuck, we were talking about the economy Elon Musk. Of course, Hassetti has a super bad feeling about it. Jamie Diamond is preparing for an economic hurricane. How do you feel? How would you phrase it? Well, I I remain optimistic, but I also understand there's a lot of complexity in

the world. And uh, I think that you know, we're focused on delivering the technology to our customers, to focused on delivering for our shareholders, and we'll have to see how things play out. There's certainly a lot of complexities. I think the FED is gonna move tomorrow. The question is how far do they move and what does that mean? But I think, you know, we're just preparing for what we can control, and then we'll respond accordingly to things

that we can't. So are you preparing for a possible recession? I mean you have to be planning for different scenarios. We are always planning for different scenarios. But we've been around long enough and been through enough downturns that we have playbooks and we know how to we know how to deal with those appropriately. So we'll see. I'm trying not to borrow any trouble right now, even though I understand it's a very complex environment that we're operating in.

So let's talk about the supply chain. What do you see that's still being impacted, especially when it comes to say SCO, What problems are starting to unwind and how long will these problems in general be with us? Yeah, I think on the supply chain front right now, we're obviously still seeing capacity issues around semiconductors, because every product on the planet now seems to have one or more semiconductors in it, and that's probably in the time where

we start to see some capacity come online. We've seen obviously the PC demand is kind of slowed, which we think is freed up some components in the marketplace, and we're starting to see inventories at brokers increase a bit, which they build their inventories from oversupply that that suppliers have acquired that they don't need. So that's actually a

positive sign. So starting to see some good signs. But I still think we're we're three six, nine months to where we really get this thing resolved in a way that's acceptable to our customers. Honestly, we're now in a period where the big big debate is do you go back to work full time or not. WebEx of course, one of Cisco top products helps enable remote work. What is Cisco's policy at this point on remote work? How are you thinking about it? And what it means the

company and your investors. So there's two things. Number One, we've opened our offices and we actually are leaving it with the management. The manager and their team to determine how many days a week do you need to be in the office as a team to drive your productivity. And then if you say that's two days, then which days do you want to come in as a team. We don't think in our case, we don't think it makes sense to mandate days where people are come in

the office before the pandemic. We have almost fifteen percent of our employees work from home full time anyway, and a great majority of our teams have distributed team members, so they're gonna be interacting over video anyway, and so

we're leaving it up to the teams. But we're also building a whole set of products and a solution portfolio for our customers who are trying to solve this hybrid work issue, because every customer has a different approach that they're taking, and we believe we have a lot of technology that can help them. So do you think Elon Musk calling workers back to the office, is he going

to be on the wrong side of history. Well, every company, I think is different in what they need, and they're like groups within our company that have decided they need to be in the office more often. So our engineering teams that want to collaborate in whiteboard and build products together, they're spending more time in the office than perhaps some of our other teams. So it would be very difficult for me to critique another CEO's decision about what they

believe they need their employees to do. But for us, we think this strategy is working. So far, and we've seen the innovation continue to to pour out of the organization. The teams are doing a phenomenal job, so we're quite comfortable with where we are. If the future of work is hybrid, you know, security is even more important. I

know that's one of the focuses of Cisco Live. You know, talk to us about the threat landscape you see out there for businesses and the vulnerabilities they still face in terms of shoring up their defensions, getting their systems ready and able to enable this kind of work for the long term future. Well, the complexity that's been created over the last few years. Every customer we have now is

dealing with employees that are massively distributed. Their applications are running in multiple places public clouds, private cloud sas applications as well as data is now being distributed. And now we have IoT really becoming real sort of bringing new devices onto the network, and so it really creates a new paradigm around how our customers need to defend in security, which is why we announced our strategy around Cisco Security

Cloud this week, continued Trusted Access, Secure Connect Plus. So we're bringing out technologies that help for this new environment and at the same time, I think it's just imperative for all of us that we have to stay focused on employee hygiene because the people and the passwords and all those things that we count on everyone to do properly every day continues to be one of the biggest risks in the system. What's your view on M and A right now? With valuations coming down, are there any

areas you're interested in potential targets you could share? Well? We have. Uh. I've been asked a few times if our M and A strategy has changed because of the valuations, and I've said, our strategy hasn't changed. The openness to talking to us might have changed on the other side, but uh, you know, we remain interested in the same area as we have been interested. Uh you know, we're always on the lookout for security. They're emerging areas around

observe ability. But uh, you know, we we start with is it a strategic fit for our technology portfolio? Is it a cultural fit? And is it good for our shareholders long term? And as long as those three work, the valuations certainly make a lot more assets actually fit in that criteria, a lot more so than perhaps six months ago. Any chance Cisco would make a competing bid for vm Ware. I'm not going to comment on that, but I think we're we we we we're constantly looking

at all of our our potential targets out there. And uh, you know, we've had we build partnerships with companies we acquire, and we do lots of our own innovation and internal research and development. We're gonna continue to focus on all of those. So look, check you've been in this industry for a long time. You've been working at Cisco for a long time. One of our guests earlier in the show pointed to Cisco stock and what happened in the dot com bust and how it's taken decades to get

back to where it was from a historical perspective. How do you see this downturn fitting into the you know, longer term picture. I'm just so curious how you're evaluating it. It's funny you say I've been around for a long time. You actually were one of my first interviews when I became CEO. Uh, and um, I think, look, what's happened is there's now a higher value put on being profitable.

Clearly there's there's there's a lot of similarities in some of the companies that had great ideas, uh, you know, similarities with the dot um bus. And I think i've heard people talk about it today and over the last few days, is that there were certainly quality companies that emerge. And I think what what will be realized out of this is that what are the real, valid business models that are going to emerge that have the ability to make money over the short term and over the long term.

But it's clear right now the market is going to reward real companies that build real things and make real earnings. And our current quarter, the low end of our guide we gave it the last earnings call is a record EPs year for Cisco, So we're pretty happy with where we are. So look, you know, if as you're mapping out your plans, what's your own what's your sort of strategic advice to yourself in terms of how you get how you get from you know this point to the

end of the year dealing with all of these unpredictable forces. Well, my advice is look back at what you've done over the last two and a half years, because they've just been different crises and we're just dealing with it yet another one now. And you know, we focus a lot of it sounds clichetic, but we focus a tunnelness stuff we really can control. And I've been at way almost all my life. The things that I can control our monitor and we plan for, but we don't worry about them.

And so we're going to continue to do what we can do, continue to execute, and continue to deliver technology that we think our customers really need right now as everybody's trying to modernize and really build their architectures for the new world, and candidly to deal with the next crisis and be ready because so many of our customers were not ready when we went into the pandemic. All right, Cisco CEO, Chuck Robbins, I remember that first interview you

did with me as CEO. Appreciated the time then, and now thank you for joining us. We'll let you get back to Cisco Live, all right. I want to get now to another big enterprise company, and that is Oracle. After it's sank to a sixteen months low in Monday markets fall, but now having the best day in six months after fourth quarter cloud sales topped estimates. Our ed letlow has been taken a deep dive on that at

what do you see how quickly things change? I mean, Oracle is interesting because they set their stool out right there, like we want to move into cloud and cloud is less than a quarter of revenue, and they performed, you know, cloud grew in the quarter. They're giving a really bullish outlook about growth in the current quarter of the year at a time where everyone's worried about recession. It's kind

of similar to Cisco. You know, they're not the sexiest companies with respect to if he's just listening and he's still listening, But they're really important as a read on the economy because this is where businesses also also has to spend their money. Well, so you read what Chuck Robin said there. He's optimistic, but it's complicated. There are a lot of things that they can't control. What is

Oracle saying about the economy. There are macroeconomic headwinds. But I think what's really interesting for them is that they, just like Cisco did, they're kind of maintaining the idea that the demand is there that even smaller businesses are willing to spend on moving to cloud infrastructure. Why because over the course of the pandemic. They learned that investing

in moving to cloud is cost efficient. You know, it might be an upfront cost, or it might be a brave decision, but when the world is changing, you're not labored with a lot of hardware or a lot of servers that there will be obviously in a few years time, So it seems like the smart choice. You still need technology to keep remote workforce is connected. For the example, as Chuck was pointing out, you know Larry Allison. Of course,

you know we we don't talk about him enough. Last we were talking about his plans for when I, um, you know, to talk to us about the significance here of you know, a guy and a company that we don't actually talk about very much. But it's still a giant industry. You know, it's interesting we talk about him more. Is a is a Silicon Valley kind of name than we do. Is the CEO of a really big company, and he owns a really big chunk of Oracle, which

is worth remembering. He has a vested interest in its success. But you know he is participating in these earnings calls. He's stepped down from the board of Tesla, which is a news item of the last week is an ally Elon Masque. He's a reported backer of Mosques bid to buy Twitter. He's on his island in Hawaii, but he's also running a really critically important tech company in Oracle. Yeah. Interesting to see how his career has involved at Bloodlow.

Thank you, thanks for that quick update, and that does it for this edition of Bloomberg Technology. We're gonna continue to stay on top of all of this market mayhem. Full coverage right here on Wednesday of the FED meeting, we are expecting those rates to rise seventy five basis points. Coverage starts live one thirty pm Eastern time, ten thirty am Pacific. Also, we're gonna be joined by Victoria Green of g squared for market reaction tomorrow and Melton two Mirrors,

chief strategy officer of coin Shares talking crypto. That's all coming up tomorrow. I'm Emily Changed in San Francisco. This is Bloomberg