From Mahard.
We're Innovation of Money and Power Collie in Silicon Vallet NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Now from New York and San Francisco. This is Bloomberg Technology coming up. Taiwan accusing China of illegally poaching talent from its tech firms.
We dig into the trade tensions.
An X goes dark in Brazil.
Judge is confirming a country wide suspension on the platform formerly known as Twitter.
And short sellers are circling some of AI's biggest question marks as earning season in marches on analysis coming up, But first a check in on the pressure on the markets. It is a risk of day to kick off September. It is a month that generally is hard at work if you're long stocks. But certainly and as that one by two point three percent edited is the worst day since the beginning of August.
And you're looking at the reasons why.
Yeah, there's a lot of downward pressure on the chip sector. In fact, that's probably an understatement. The socks down six percent, it is biggest drop since August. First and that name there is a big reason why. And video down eight percent on track intra day for its biggest drop in about a month, although actually at times in the session it's biggest dropped since April. There isn't really a clear catalyst.
There may be some hangover from earnings. Ian King and I writing about how Jensen one's often resounding message didn't quite get through last week. But maybe there's some macros things going on here. We also have chip earnings to come Carrot we.
Do, and let's just look broader for a moment ed in the world of chips and to one Ian King to help us, because Taiwan says Chinese chip companies are quote illegally poaching talent and trade secrets and are scoring a heated global rivalry that is developing the key technology used in phones and cars in ai Let's bring in inking and look, perhaps unsurprising, the tit for tat continues.
What did you make of it?
Yeah, I mean this is a recurring theme. We've seen US companies kind of dragged into this. And the biggest concern is this island is obviously a huge concentration of talent, very important talent in this industry. If you can't get the equipment, like a lot of the Chinese companies can't these days because of US trade sanctions, maybe they can get the expertise and build their own and that is
a continuing concern. So you're see in companies like Nara in China and equivalent of applied materials being accused.
The narrow case study outlined is that Narra supplies China's biggest chip maker or contract manufacturer, which is Semiconductor Manufacturing International or SMIC or SMICK. Extrapolate on that case study why this would be of particular a grievance to Taiwan.
Yeah, I mean it's a way around their strengths because Snake is obviously a massive well would be COMPETITIVESMC. It's probably the best Chinese contract manufacturer. So what Taiwan really doesn't want is an erosion of its own talent based flowing into mainland China. And this is obviously a concern for the US as well.
Well.
That bigger concern for the US it's labeled as being China's potential access to technology that would give them an advantage from the military context. Is that kind of the core of US policy around.
This it is, I mean, that's what it all started with under the Trump administration. The argument is that we need to stop China from getting access to advanced semiconductors because of what it will do for its military capabilities. But obviously since then it's flowed into other areas and made this a real focus of economic competition between the two countries, and.
Not just two countries embroiled in because the US is leaning on others.
Yeah, no, you're absolutely right, Carol. And what we've discovered along the way, and it's been along two or three years, is that unless Japan, unless the Netherlands in the form of ASML, restrict access to China of their key technologies, and perhaps there are workarounds, there are workarounds that China can make. And obviously what we're seeing with this Taiwanese situation is another attempt at work around. And if you Chinese,
it's a legitimate thing to do. Would they want the technology for their economy, But obviously from the Western perspective, this is a worrying development.
Bloomberg's in king, thank you very much. Now.
With Taiwan's growing dominance in advanced chips, Bloomberg News took a deep dive into how the boom in that sector is affecting its economy.
More broadly, have a listen.
Taiwan is the home of our treasured partners.
This is, in fact, where everything in video does begins.
It's become a lynchpin of the global economy. Taiwan's dominance in advanced chips grown through the AI boom, creating fortunes in the process local industry billionaires and ninety percent riches since the introduction of CHATCHIBT November twenty twenty two. While stocks in Taipei have searched, property prices hit a record high in March, with the biggest gains in the city of Sinchu, the home of semiconductor giant TSMC. That wealth boom is raising fears some will be left behind.
There is.
A worsening of income distribution across the board, and I don't see any any measure to improve this at the current juncture. Parents take the brand I have in their kids buying apartments, and somebody's not sustainable because the next generation.
Won't be able to do this.
Taiwan's government, though, has set ambitious growth goals, seeking a one trillion dollar economy by twenty twenty eight, with GDP per capita set to surpass that of South Korea next year. Anna belt Ruler's Bloomberg News Now.
More on geopolitics.
China's top easy makeer BYD says it won't announce plant investment in Mexico until at least after the US election.
It's all according to.
Sources, this as shifting American policy forces global businesses into weight and C mode. That's keet the technology investors reaction and erathments with ours CIOC this investment advisory services.
This is a theme manner.
More companies feeling a lack of clarity from the US right now.
Yes, it's a bit unusual to be this far into the election cycle with the election actually just around the corner, especially if you account voting not at the boot early voting, it can now have any clarity on the economic policies. And certainly our partners outside of the US are nervous, just as we may be here.
Let's talk about what you've been seeing domestically. There is a lack of clarity because the election has not happened, but the policy leanings that we're hearing, for example, from now the Democratic ticket. All you've feeling that companies all you yourself as an investor changing how you look at companies based on US wanting well more geopolitical tension with China not less.
Well, you know, China, I think is a special topic. I don't think it's I think it's party agnostic. I think that's one topic that Washington can agree on is being a bit hawkish towards China. And it has been
this way for many years. So you know, when companies like Buid say that they want to wait until election is over, I wonder to myself if some of that is just the company saying that the election itself is a bit of an uncertainty for the markets, or if it truly is it believes that there's going to be a policy difference, because from where I sit, I don't think there is Both the Democratic parties, certainly it wasn't Harris at the time, it was President Biden as well
as the Trump campaign. They've both been very hawkish, especially on evs that may be coming over from Mexico. So I think this is more noise than it is actually something that could be solidified into one party versus another being favorable to view Id or any other companies.
And you see that the Chinese issues by partisan.
Difficult, But is there a clear pro tech policy platform or pro tech investment for either outcome of this presidential election in the US.
And I think that's the hard part is that we don't know. It's the hard part. There is some policy generalities that we've heard of from either actually both parties, but there are any specifics that could make investors say, Okay, this is pro tech. If anything, I think there's increased pressure on tech with AI and certainly chips right AI enabled enabling chips.
There's a lot of.
National suitcurity concerns and we've seen this in the last few years. This is not anything new, and I don't think it's going to be something that's going to be new after this election is over.
In markets, there is seldom just one single headwind nor tail when at any one time there are multiple. Which is the greater focus for you right now? Central bank policy or November?
For US?
Right now, it is definitely central bank policy because there's so much uncertainty. There's a lot of noise we're trying to ignore. The FED, I think is more on the closer docket, especially with the September rate cuts at the market seem to be expecting. We are definitely expecting it. We've never been in the fifty basis point camp. We're still in the twenty five basis point camp. But we
think that could be a start of a cycle. Twenty five basis points isn't that big, so you know, it's not going to make or break a company that needs to borrow, but a certainly a cycle would be a signal to the markets.
And that could be the tie that lifts all boats tech certainly, but.
Not just tech, but other areas of the market that have been suppressed for about eighteen months now.
And all boats are not rising today in faederal falling.
But ship's the hardest.
Do you invest in AI and chips at this moment?
I think that depends on your time frame. If you're a long term investor like US, Chips definitely has a place because this AI thing is not over. It is not a hype. It needs to get cleaned up over time. But if you're a long term investor, that's the infrastructure that is at the center of how you develop AI.
So I think it can be.
An exciting expect It might be a buying opportunity, but certainly for the long term.
And there is anxiety in the market this morning, we're showing it on the screen. Were you left from Nvidia's earnings with confidence or are you still looking for more data on how long this investment cycle has to run.
Certainly more data, But I wasn't pessimistic about it. Look, I mean they beat right, it was just not good enough for the market. That tells you more about the valuations of the markets than about the company itself. So we're not pessimistic. But at the same time, you sort of wonder how long.
Does this have to go?
Right?
And they have great market share right now, but when do the companies like Facebook and other companies that they rely on for their revenues say enough is enough? And that is the uncertainty that I think is coming down the line, maybe in twenty twenty five, twenty twenty.
Six, Anna Rathan COIOCBIS Investment of Advisory Services.
Thank you very much so.
Coming up on the show, Brazilian judges ruling against Mask, upholding a nationwide ban against his social media platform X. We have the reports from the ground next and take a look at Intel.
Cara.
Investors are basically bracing for more information the chip makers presenting the city Global Technology Conference tomorrow and the options market pricing in a swing of around five percent in either direction on whatever's said.
Reminded. Last week, Bloomberg reported that intels.
Us its bankers to find strategic options like separating out its foundry business to start caught up with the chip slump down more than six percent in the session.
We'll be right back. This is Bloomberg Technology.
Quick check on the markets for you, because we are in sell off mode once again, as we were on August the first. We are down significantly on the Nasdaq and indeed across some key chip players. We are wiping off one hundred and ninety billion dollars in market cap from and Video.
At the moment, the worst.
Day since August the first, Broadcom has its earnings. All eyes were down more than four and a half percent. Apple off by more than one let's call it almost two percent, but pressure across the market.
We will keep you attuned to it. But let's dig into.
Some individual stories for you in the technology world. And Brazil Supreme Court upheld in order to banning on Mousqu's social network X as part of efforts to combat fake news and hate speech. Now Brazil joins China, Russia and North Korea in banning access to certain social networks mean most Daniel Cavallo is with us covering from Brazil and look, this really is Supreme Court winning out here at the moment, Daniel.
Yes, well, happic days here in Brazil. Let me tell you how this story started and beginning since the beginning of the year. Morai is a justice from the Supreme Court Periance zim edition. Maris has ordered the block of some X accounts that were spread in hate speech and mask. He wouldn't comply with this disorder. Disorder so WHATRA has begun to impose fines on X. They didn't pay, so Brazil's justice was looking for who was the legal representative
of the company in Brazil. I'm surprised there was nobody and this position. So last week, just as Maria said that Twitter would have twenty four hours to nominate someone for this position, it didn't happen. So Friday night he ordered the block of X in Brazil.
There are some outstanding questions Daniel about one of Elamus's other companies, which is SpaceX and it's starlink satellite based internet service. What are the considerations from the courts around Starlink and what they might do.
Well, what I has ordered the block of bank accounts of Starlink because as X wasn't paying for the fines that was that were in posed for the company. What I said, Okay, so we're going to block the accounts of another company in the country. And it's very controversial here in Brazil because there are two different companies. Yesterday, the panel of the Supreme Court, they confirmed the order to ban X in Brazil, but they didn't discuss the startling part of the problem. It's yet to come.
Bloomberg, Daniel Carvalio, thank you very much for some on the ground reporting. Another big story we're tracking is in the world of smartphones. Next week, Apple unveils its latest iPhone lineup, another new tech, but only a few hours later, Huawei will do exactly the same for its products, setting the stage for a smartphone few Let's discuss with Bloomberg Technology editor Dana Wohlman and in the Technology report a toolkit events are key. The difference with Huawei is that
this is about products largely for the Chinese market. But my goodness, the timing is curious, isn't it.
It is and normally, this is the sort of move that Apple would take scheduling really cheekly scheduling an event right on the heels of a competitors event. So for Huawei to do that to Apple is almost like Huawei out appling Apple in this case.
Talking of out appling, they talk about an epolk making product, everyone thinks it's going to be a several times folding phone. How much does that play to the Chinese market for Huawei?
So this would really be building on some tremendous momentum for Huawei. According to IDC data from the most recent quarter, Huawei made it into the top five for Chinese smartphone shipments, knocking out Apple, which was quite extraordinary. And so this would really be building on Huawei's success in its home country. And as you say, the device is rumored to have foldable creases in not just one spot, but two spots,
and that would be a really interesting form factor. It would be a first of its kind that ships to the public. And what that really means in Layman's terms, is you can get a much bigger, more tablet laptop size screen that can compress compactly when folded into the size of a reasonably sized smartphone.
I've been invited to the Apple event which is here in California on September ninth. It had been, according to our reporting September tenth, but you've got the first US presidential debate on the tenth, so it's a choco block calendar. Just recap the Apple side, what we expect from them, and what Bloomberg's reporting tells us about the product lineup.
So according to my colleague Mark German, the devices will not physically, in an exterior way look much different from previous iPhones, and to some consumers that may come as a disappointment. The iPhone hasn't seen a major redesign since twenty twenty, so a lot of people would think the
iPhone is due for something just more striking looking. But indeed one of the biggest selling points will be the suite of new AI features, and even those, according to Mark, will have a slower rollout than consumers may have liked and possibly even Apple would have preferred.
Dana Wollman keeping us up to speed.
Hewlett Packard Enterprise HPE says it intends to pursue the four billion dollar damages claim in London against the estate of the recently deceased British tech tycoon Mike Lynch. I mean most Jonathan Browning is here with more. This is a controversial and difficult decision, I.
Imagine it is.
And yet Hewlett Packard Enterprise, which is the entity that has responsibility for the British case, has said that it intends to pursue this claim to the end. Just to distinguish between the two cases, there was a US criminal case that Mike Lynch was found not guilty in, and then there was the British case in London.
And in the London.
Case, Hewlett Packard sued Mike Lynch and his former chief financial officer over the collapse of Autonomy, the software company, and they found and the judge found that Mike Lynch had fraudulently boosted the value of Autonomy. We are now at the point where we are waiting to see whether those damages can be collected, and HP yesterday said they
intend to do so. It is little more than one week since Mike Lynch's body and that of his daughter were recovered from the sunken yacht off the coast of Italy. That it's an extraordinary story. Jonathan, could you just explain kind of procedurally, what is happening at the moment with the investigation of what happened and now this legal challenge at the same time. Yeah, So in Italy the prosecutor
has opened the preliminary inquiry. They are looking at potential manslaughter charges relating to the foundering of this luxury yacht, the Asian, that sank in such a short period of time, when when severe weather struck, and they'll be looking at human error and an all host of other issues. But as you say, it's it's it's just a few days since that happened. And then and then HPE comes out with their own statement that in in London they will
they will carry on the case. And lawyers will tell you that in a in a in a British case, the claim can fall to the estate in the event of a death.
And so in this case.
HPE will be pursuing the claim against the estate of Mike Clinch, that is his recently bereaved widow who was on the boat and managed to escape, as well as his his daughter who wasn't on board.
And as your story says, that men like you to face criticism going ahead with the claim, but Hewlett Packard Enterprise has its earnings.
Hate to bring it back to that, but has its earnings this week.
They were likely to face questions, Jonathan, So maybe they're getting ahead of that.
Yes.
I think that's probably the likely the likely reason why we know this now because the simple fact is that the actual court case is still weeks from conclusion. Bloomberg, Jonathan Browning, thank you very much for your reporting.
Welcome back to Bloomberg Technology. I'm Caroline Hide in New York and.
I'm Ed Ludlow in San Francisco.
And it is a down day to start this month of September, post Labor Day, the jolt comes back.
We are risk off.
We're just going to move on from this board to what is happening on the Nasdaq more broadly at the moment, because we are off by more than two percent at the moment on the Nasdaq one hundred and in life large part it is the chip names that are dragging us lower. I'm looking at a sell off that means risk aversion that means money pours into the bomb market. Tenure yields come down some five basis points. Bitcoin as well suffering from the risk pushback. We're down by two
percentage points. Move on the individual moves that I'm having a quick look at for you are some European names. Look, Europe has just closed and we have seen SAP under pressure not that much off by eight ten percent.
The CTO steps.
Down for some inappropriate behavior we understand had a previous role. We see Delivery Hero down by one point three percent. Again, this is German company, but actually has a Middle.
Eastern unit that it's looking to.
Well, maybe IPO in Dubai and bankers have been talked to. In video though front and center ed. We must keep showing this the fact that the Invidium name is down by seven percent, worst day since August the first the socks.
Nearly every player is on the.
Downside, right and given in Video's market cap or waiting in indexes, it's important come back to me on the other megacap names though, because it's a similar story kind of bias so.
And broad my anxiety.
They're the biggest points drag after in Video on the Nasdaq one hundred at least, I.
Don't see any news out there. I don't see any catalysts.
The lead of the Bloomberg Global Markets RAP is firmly on Nvidia. But these are noteble declines, and of course we just talked about Apple in its event next week. Probably expect some volatility in the interim. Let's get to one of the top stories on the Bloomberg terminal. Wall Street is getting into shorts as traders hunt for winners and losers in the AI race. Check out super Micro,
Lumen and Symbiotic. They were hit by various research reports questioning their valuations and the ches as a results of getting punished. Bloomberg's Bilea Lipshaltz has been writing about this and fresh in the mind because we covered it so deeplyyond the show. But Hindenburg's short sellers report on super Micro is kind of the latest high profile example. But just explain what you're trying to outline in your piece.
Well, and when you mentioned super Micro, this is a company that went from just about two billion dollars in market cap up to sixty six billion dollars in market cap in just about two years. So we're seeing a number of these AI beneficiaries, whether it's super Micro with their business. Symbolic is a company that makes warehouse automation robots and has a play or at least they pitched
themselves as of AI related company. Lumin Technologies has seen shares rally over the last few months given their positioning within the AI trade as well. And we're just seeing to an extent a number of activist shorts, whether it's Hindenburg, Carasdale and some of the others, just kind of calling out and diving deeper into these companies, into their operations,
into what they're actually doing. And that's something that it seems like with these manias, whether it's Bitcoin, whether it's pot stocks or AI, we see Wall Street more than happy to pile into the number of these stocks, a lot of these very good companies, and we've seen that with Nvidia over the last few years. But when the scrutiny kind of gets ramped up in maybe a risk off tone like we've seen today, that's when a number
of these companies can fall under pressure. And that's really what those short reports have called out again, four companies for very different reasons for their bearish reports, but nonetheless each pretty much down more than twenty percent since those reports were published.
Is anyone willing to buy the dip here, because actually super Magu is on the up today only but a percentage point.
It's up one point four percent.
Again, the concerns from last week from the Hindenburg report, from the delayed filing kind of just caused people to rethink and recalibrate some of those bets. Has the company come too fast, too high, too quickly?
Again?
It was trading north of six hundred and twenty five bucks just a few weeks ago and still only at four forty six right now. We're searching for or separating winners and losers, is one of the quotes in the story. I think we've dwelled on the losers. Who the winners out there? Have you been able to find them?
Bailey?
Well, we've seen a number of them met Right Even with Nvidia's fall off today of seven percent, if you bought in really at any point for the most part over the last two year years, the stock is absolutely ripped. We're still it seems, and I know I think you would probably know better than I. It still seems like investors right now are teasing out the picks and shovels, if you will. We see on the private markets the open AI latest funding around, that's a tremendous valuation for a company.
So the big concern, at least when.
I talk to folks, whether it's later stage investors or those growth and crossover investors, is where are you finding that value? And as we see companies stay longer or say private long for longer and raise some pretty eye popping valuations, that's where people are putting money to work. But we're also still seeing with the super micros of the world and in videos of the world AMDs, that there still.
Is a lot of money to be made.
The big question is where what is the proper valuation and when do you, as Carol put it by the dip and how does that kind of fit into a broader portfolio?
Any lipshiwz. That's a great story. We thank you.
Meanwhile, though, look, a key question still out there for investors is regulation. In California, the legislature has actually approved a controversial AI safety bill last week, which requires companies to make sure their technology doesn't cause major harm.
It now faces its biggest test.
In front of California Governor Gavin Newsom, who has stated he doesn't want to overregulate the state's dominant AI sector. The bill has drawn both criticism and praise from a series of national figures Wheny Gonzalez is with us to discuss this.
She is the CEO of.
SAMA, which provides high quality training data to power AI technology. And I would have thought you've been doing well as all companies suddenly want to be able to label their data and use large language models. What do you make of this regulation going through California?
So AI can be a force for good, but it does need some safety guards and some guardrails put in place. I think this is really a signal that the unregulated era of AI is over. I think that first step was with the eu AT that happened and was ratified overwhelmingly last year by the majority of the year union.
The worry for.
Some in the market open AI has been a voice for this Wendy, is that the regulation coming through will harm in particular smaller companies and also open source large language models.
Is that something that you agree with or is this the.
Necessary step taken to ensure that AI remains for good.
Well, it's a tricky regulation to put in place. There's always this balance of ensuring that we're not stifling innovation while trying to reduce harm and to create transparencing in AI.
Within the SB ten forty seven regulation itself. There are some parameters related to the amount invested in AI, so they're trying to find a little bit of a balance of if it is a large scale model that is that has you know, over one hundred million of investment or ten million dollars to deploy that, that is what would be subject to this as well as AI that could be used to enable cyber attacks to critical infrastructure such as energy, you know, nuclear, you know, chemicals as an example.
So it's about NDY.
We spoke to academics who said they were consulted but didn't like the content of the bill. We spoke to Senator Scott Wiener who said he spoke to everyone he could and tried to get input from as many people as possible.
Then you have Meta that's against it.
From the open source perspective, why couldn't we find a bill that basically worked for a broad coalition given all the talk about it.
It's true that it is someone incomplete. I think one of the best things that can be done is that public private partnership where you know, companies like Meta open A I know there's are really on the leading edge of developing this technology, and I think there were a few things that were basically incomplete in this. One was that there, you know, is the notion of kill switches.
The other is this notion of having third parties tests. Well, that becomes really difficult for proprietary AI right yourself up to a third party, and that's a reason why companies may not want to participate. Then there's some other important items like sandboxes, So an AI research and development is a critical part of this. If we don't have some content around how sandboxes can be leveraged to test out whether there are actual harms, I think it could become
very challenging. So really, at the end of the day, what I think everybody's wasting some concern on is we don't want to have any unintended consequences, whether it is IP stifling of invation ye. At the same time, I think we could all agree, and most Californias probably do agree that some safeguards for this pervasive technology are necessary.
Wendy Summer provides data labeling and evaluates models. How is the bill and its content is going to impact you in practice?
Well, one of the most critical things about developing responsible AI is having some human centric validation. So I believe that this will ultimately drive forward some additional measures for both human centric validation, quality and management systems. So I think there could be an increase ultimately over time. But what we do see is that a lot of companies, including big tech, probably do a little bit more than maybe the public is aware of in terms of trying
to provide these safeguards. Now it's really about putting forth a regulation that balances that and really create some transparency. So we've seen it happen before, certainly, whether it was green emission standards set up by California or you know, laws like GDPR in Europe where they did set forth a wave of actions that ultimately companies had to comply with. So well, I wouldn't say it, you know, we're seeing
it droves right now. I do think over time companies are going to need to think about this because, as I mentioned before, I think the unregulated era is coming to an end.
Mindy Gonzade is great test in time with the CEO of Sama. Now we want to stick on the theme of AI. But the set off thing that we're currently seeing in the markets ed this is of the start of August all over again. We're down by two percent on the NASAQ one hundred we're looking at in video being the biggest points drag once again, obviously when it's worth so much two hundred billion dollars being wiped off on one day alone in its market cap.
At least in the first week of August, there was something to point towards right the unwinding of the yen carry trade central banks. There just seems to be a lot of anxiety for no specific reason or catalysts in the market. In the global wrap on the Bloomberg points out that, like you said, Caro, August in September historically pretty tough. Yeah, chip makers are doing badly, but there are other sectors at play, like the energy sector. I don't know where else we could look.
Yeah, oil down sub seventy five dollars if you're looking at Brent. But it's notable that Tiro have come out a particular fund manager there saying, look, I am worried once again about a yen shock, seeing another one coming.
Maybe it is the same cause.
Of anxieties that we saw in September, always being a pretty tough month if.
Your long equities.
We're going to stick on this theme throughout, but coming up another busy slate of earnings with AI and focus there too, looking ahead to results. Broadcom from HP Enterprise that conversation, I'm next, this is Broo Meg Technology.
Okay, time for talking tech and first up in the news. DirectTV says customers lost access to what Disney programming today after the company's failed to reach a new licensing pack. The company also says Disney sought a waiver to all claims that its behavior is anti competitive as part of any new deal. Plus, South Korean startup Rebellions is planning to go public as early as the end of twenty twenty five, seeking to capitalize on booming demand for the
chips used to power generative AI. Plans to select global banks for a domestic listing around March. And Airbnb is urging New York City officials to scale back a local regulation that outlawed most of its short term rental listings when it came into effect nearly a year ago, citing impacts on travelers and hosts. The company says the regulation has quote failed to deliver on the promise to combat the housing crisis.
Caroline and let's.
Just return our attention to earnings because there are still some to come. Believe it or not, HPE and Broadcoms set to reveal actually pretty healthy growth in quarterly reports this week. That will also be sifted for clues on the longevity of pretty heavy corporate spending on AI. Let's break it all down, men intelligence analyst man needs saying. I'm going to start with Broadcom. The market is anxious today. It seems to be a report coming from the Semiconductor
Industry Association showing below seasonal trends. But what will we dissect from Broadcom more broadly?
Look, they are a pretty diversified company, and you look at their two main segments. You know, the software side is recurring in nature. They tend to focus a lot more on cybersecurity, and as we know from the crowd strike outage, cybersecurity spending actually has done pretty well, and in fact our survey suggest it should there should be an uptick as a result of their outage on the semiconductor side. Look, every hyperscaler has told us they're overinvesting
right now in AI infrastructure build up. And granted, you know sixty percent of the dollars are going to Nvidia, but the remainder. I would say Broadcom, Marvel. We saw the print from Marvel was pretty strong because all these hyperscalers are focusing on custom chips. I mean, at the end of the day, whether it's Amazon or Google, they want to do their in house chips as well as a lot of the enterprises that are focused on compliance aspects of jen AI. They don't want to build everything
on the cloud. So to my mind, a company like Broadcom that's giving you all the you know, the basic infrastructure you need, whether it's on the networking side or the custom chip development, they should benefit from the trend and the capexpen vire seeing.
And BROADCM may not say it explicitly, but Broadcom helps Google with its Tea EU. What about Hewlett Packard Enterprise. It's kind of like at this stage and earning season historically might have been hard to get yourself kind of pumped up for this, Mandy, but look at the anxiety in the market.
It's another print we need to watch well.
So I look at it this way. All the companies that require you know, AI ready servers, there aren't many places they can go to. It's still I mean SMCI, albeit all the things that happened, you know, with their ten K filing, but an HPE and I think all these companies have razor tin margins when it comes to the AI servers, but still it's the growing part of
their business. And right now we have heard from every semiconductor maker that you know, the market is under supply, and that's why you know, whether you're a server company or chip company, you still write this trend. Now, what you know the new black Bell release will do, who knows, but clearly you know we know for fact that all these companies are looking to build their AI infrastructure, and I think because these companies fit in the supply chain, they should benefit from that trend.
There's been much said of bulls versus bears. Now some of the bearish line of argument is just valuation. MANDI what do you make of some of these valuations on these companies.
Look, I think with Nvidia you could argue the multiple is rich, But can you find another company that's growing sales at fifty percent plus? And so that's where you know, as long as they keep beating and raising the way they have, it's hard to be bearish on valuation. At the same time, there is a risk that when the growth tapers, and it will taper, everyone expects that. It's a question of when it will happen, and when that happens, the multiple will be cut into half or even more so.
Right now we are in that phase where nobody knows how these llms will keep scaling. There will be a plateau in terms of, you know, the scaling for the llms, but we haven't hit that yet, and the market will look ahead it will look twelve to eighteen months ahead, but right now the bed is it's not twelve to
eighteen months ahead. It's probably a little further along. And I think until then the valuation is sustainable because with tech, you pay a premium for growth, and these are the growth pockets.
Within that tech sector many real quick.
If Capitol extend, it shows was the watch word for the hyperscalers? Which metric do you watch for? Those are the names left to report?
Well, So, look, I think when it comes to Broadcom or HP Broadcom is more diversified, but top line growth is what you care about and gross margins. With Nvidia, what everyone was scared about was that peak and gross margins. So with Broadcom, if we hear a similar story, then that's when you get worried because gross margins are very important for hardware companies.
Blimberg Intelligence senior analyst Man Deep saying thank you very much.
Fans of Oasis, they're looking back in anger. You get it at Ticketmaster thanks to prices at skyrocketing for the group's highly anticipated reunion tour. Now the ticket platform was using dynamic pricing to set ticket prices, which of course ad just prices based on real time demand from the market. Price is jumped by multiples when tickets went on sale, prompting hundreds of complaints to advertising regulators.
Bloomberg's Charlie Wells.
Joins us, now you are the voice when it comes to personal finance, and you'd been embracing for this people playing the system ahead of it.
Charlie, Oh yes, I have. I have been covering this story since last week. I've been talking to fans up and down the UK and it's striking how the energy has changed from last week, when there was a sense of jubilation. I was talking to fans who were willing to do anything to get their hands on these tickets, to frustration. This week, those same fans unable to get them due to some tech issues and of course some of those dynamic pricing issues as well.
That frustration is playing out on instagram x formerly known as for I literally see Liam and Old Gallada's faces everywhere which lakes we think about technology. Is there nothing that they could have done from a tech perspective to stop.
This or is tech to blame?
That's a really interesting question. I mean, on one hand, there's a sort of communications and marketing side to this, where you know, dynamic pricing is newer here in the UK than it is in the US as far as concerts, but when you think about things like Uber, of course there's surge pricing here. So there's an argument that the band or that ticket master could have been clear that
this was going to happen. But I've actually been talking to a number of fans, you know, after the weekend, and they said that some tech glitches were actually.
Almost more frustrating.
So women named Nikki Bentley here in Essex said that she was accused of being a bot by the website. And then I also spoke with someone in Brighton, Rob Harlowe, and he said he made it to the front of that digital queue, but by the time he got there he was then kicked out, oh and ended up at number two hundred and fifty thousand in line. So a mix of that kind of communications issue, but also some tech quitch.
Is here, bloom bags, Charlie Wells all over this story for a little while, Thank you very much, Carro.
We go straight to markets. We have to.
I don't know where to look other than at the index level NASDEK one hundred.
Tech is under pressure.
That's an understatement in video is the problem at the index level from a points drag perspective. But when you see a name like Apple down more than two percent, then you start to ask, Okay, what's the bigger thing that's happening here, And it's probably the chips, right.
And ed, we are in back to school mode.
We've got volumes actually higher when compared to previous cellos. At the moment, we're up some seven percent in volumes on the Nasdaq, and you're so right, it is chips, chips and chips again, we're down by seven percent on in VideA. The broad semiconductor indexes under pressure. I think only one name was in the green. Were seen by five point eight percent. We're off of our lows on the day ed, but it's important that we look ahead to Broadcom in terms of its earnings.
Yeah. Intel speaking tomorrow at that City conference as well.
That does it for this edition of Bloomberg Technology.
Short a week, but my goodness, a lot to talk about and recap.
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