Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Eva Though in San Francisco.
This is Bloomberg Tech coming up.
In Vidia selloff, SoftBank isn't the only company exiting the AI MVP as a shareholder. Peter Teal's hedge fund offloads its entire position.
Details from a thirteen F filing, plus a crypto market sell off shows.
No sign of easing and some of the riskiest tokens.
They're bearing the brunt of it.
And Amazon is seeking to raise about twelve billion dollars through a debt offering an industry wide race to build AI infrastructure.
But first we check in on the markets that have been under pressure.
We are once again questioning AI valuations. We're checking some of the biggest winners and whether or not we're taking money off the table. We're off flat on the day on the NASAK one hundred. More broadly, but it's been a volatile session thus far, as we've tried to dissect who wins from some of the purchases, Alphabet being key among them, and who's being sold off. Let's just dig into some individual movers that I want to shine a light on because thirteen f filings they tell you an awful
lot who is being bought. Alphabet is being backed by Berkshire Hathaway. We're up five percent, a significant move that helps them as that one hundred more broadly be training flat even though sentiments seems to be shifting to the downside. Sentiment on the downside. For a video ahead of its earnings later this week, we understand that another key investor that everyone watches this one Peter Teel of loading his entire holding from his macro fund his hedge fund in
in video. We want to get to both of these key stories because the Teal macro fund, as we know, has been one that we really do focus in. At the moment, it does still hold onto Microsoft and a reduced stake in Tesla we understand as its main bets all according to that filing, we want to dig into it with a hedge fund. Reporter Emma Palmer, Now, look,
this is someone that we always follow. Peter Teel made his foun by backing meta artists formally known as Facebook, and now he takes key bets on publicly traded companies. But while offload one hundred million dollars worth of Nvidia.
Yes, it's especially interesting given how concentrated his portfolio is really only four or five stocks, So when we see a rotation in this portfolio, it holds a lot of meaning, even though the position itself was only about one hundred million dollars, which in our hedge fund world isn't that much when we look at the exposure, So you know, this may be a reflection of a lot of the
cautions and concerns that we're seeing around the AI space. Valuations, the amount of money that's just flooding into the space, concerns people have about the circular nature of investments and money in this industry, and so this could be an expression of that. Typically, when you see a concentrated portfolio and a shift that's notable, like editing a position entirely, then it often suggests a directional and concerning What's.
Interesting, though, is that the overall fund in terms of deployed money into equities gone from an excess of two hundred million down to about only about seventy million currently deployed, and we understand the coll so that he is still making big bets on startups. We just had Substrate on a couple of weeks ago, the CEO that he's now backing to take on ASML and take on some of
the chip design and equipment makers in particular Hammer. So do we think in similarity to SoftBank they exited five point eight billion dollars worth of Nvidia, but that was about.
Having money to be able to reallocate other areas the AI ecosystem.
Yes, exactly.
So when we look at these startup investors, you know, they put a lot of money into the pre IPO space, into these companies before they make a lot of their gains post IPO, and so you know how they think about the startup space and then how they think about the public market space could be expressed a little bit differently when we look at SoftBank, to your points, they did make that rotation to invest more into open AI.
So the thirteen f's give us some clarity and how these money managers think and what they do, but really doesn't show us everything. It doesn't show us intention now, it doesn't show us shorts, and it doesn't show us other types of hedges against a position. So we do have a limited point of view. We'll take that because hedge ferns are so secretive and so private. But it is somewhat of a very specific insight.
Great context.
What is the context around Alphabet and the buying by Boatsha Hathaway.
Yes, so when we look at Alphabet, a huge position for them eighteen million dollars eighteen million shares worth about five billion dollars as of the end of the third quarter. Now that means it is the tenth biggest holding for Berkshire Hathaway. Sizeable, but it also gives you a sense of just how much money this firm puts to work. Its biggest holding is still Apple. They did trim that steak by fifteen percent, but it still holds about a
quarter of the portfolio exposure. So it's likely less of a directional view, perhaps more of a rotation of the portfolio to manage its exposure. But when we see a brand new position and a one like in Alphabet Google, then it does suggest that there might be you know, a lot of bullishness as to that stock.
Love having the hedge fun perspective from your hammer across our world of Techema Palmer, we appreciate it. Meanwhile, all eyes on in video fundamentals as a company reports earnings.
On Wednesday, Chris Larkin over e Trade from Augustanley, saying that the monthly jobs report would normally dominate the week's economic calendar, but with the AI trade struggling the past couple of weeks, in Video's earnings and once again looking like a key piece of the market's momentum, puzzle here to break it down in King, because look, we can see companies and hedge funds maybe selling their entire holdings of Invidio, but the fundamentals look pretty strong right now. In it seems yeah.
I mean, as you know, Caroline, we just had a chat with Jensen in Washington a short time ago, and what he was saying that that conference was like, hey, I've got half a trillion dollars with the vorders coming in the next few quarters. So on a fundamental basis, at least from his perspective, thing to see here everything is is kind of still heading up into the right.
I mean extraordinary. We're anticipating what fifty five billion dollars worth of overall sales coming on the quarter. In there is areas where we could perhaps get a bit more granularity, whether it's concentration of certain end users, but also whether we're going to get any access to China.
Yeah, I mean the concentration thing. They keep giving us a number, and it hovers around sort of fifty percent of their revenue at least for the data center business coming from sort of Microsoft, Amazon and that sort of those hyperscalers. I think investors would like to see that number go down as a percentage and see that AI was being spread throughout the economy. And as you mentioned in video, keeps saying, look, we're not banking anything from China.
We still don't know how the geopolitics is going to work out, but he has.
Been very clear on the opportunity of sovereign AI more broadly, so, do you think you'll get more of a global perspective there of other end users, whether it be governments or whether it be other enterprises.
Yeah, I mean, I think we've heard the sales pitch over and over again. He's very good at the sales pitch, as you know. And we've also seen a lot of deals announced here there, and you know, Jensen's been all over the world and that's all good, that's all trying to create the sense of progress, but I think what investors would like to see is that kind of translating into something in terms of revenue that rivals one of his big customers such as Microsoft, such as AWS such as Meta Ian King.
Thank you very much. It's gonna be a busy week as always for you.
Meanwhile, let's get the broader tech forew as investors, of course are gearing up for a videos results this week. Ja Jacobs is with US Blackrock, head of US equity ETFs. You've had some phenomenal success with certain of the ETFs you've offered this year alone in terms of actively managed AI bets in video a key holding. How much of an impact will it make on general sentiment do you think?
I don't think there's going to be a ton of change in sentiment based offf of short term earnings or just any individual company. We see a lot of our investors looking at artificial intelligence has just a long term transformational theme that they want in their portfolios. Oftentimes this is being funded by selling out of the tech sector and allocating to AI. So frankly, for a lot of investors, they haven't met changed their position in the mag seven.
They're just extending to get a broader exposure to the entire artificial intelligence value chain.
In the last couple of weeks, we have seen more anxiety though, and you've seen downward pressure on some.
Of the biggest AI winners.
JAY. Has that changed any of the types of conversations you're having.
No, I mean, we've continued to see inflows and to BAI, which is our actively managed AI fund, and I think frankly, a fair amount of investors out there have frankly been looking for a buy the dip opportunity. They've seen this trade continue with so much momentum over a couple of years. Now that we're on basically the third year anniversary of chat GBT coming out, a lot of investors have been looking for a little bit of a buying opportunity to get into the AI trade.
What, therefore, are.
Some of the conversations you're having in terms of nuance, because the nuance is constantly changing. Initially it was all about return on AI. Then it was about whether or not enterprises are really using them effectively, whether the pilots are working. What are the types of conversations that you're having about to the upside down the downside when it comes to your actively managed AI trade.
Well, we're seeing a lot of investors ask about kind of what's going on beyond the MAG seven. There's been a fair amount of discussions about data centers, about power infrastructure, about some of the early adopters and artificial intelligence. So a lot of that nuance is really about looking across the entire value chain for opportunities, not just concentrating all of the activity around the MAG seven.
So when you're looking at BAI, I think it's about seven billion dollars in active in assets under management there where are they managing to play out the entirety of the AI trade Because, as you say, much of the value has been gained in AI infrastructure bets, but that's broadening out now, Well, that's right.
I think a lot of the exposure is looking at that AI infrastructure trade that's semiconductors, but really broadly looking across the semiconductor spectrum, that's looking at data centers. We have some power infrastructure names in the fund. I think as we continue to see AI evolve, it's going to move from this CAPEX heavy infrastructure build out into more
of the models that are generating revenue. As you see more adoption and I think we're starting to see that in some of the earnings now about how many tokens are being processed by some of the largest large language models. That we're seeing a lot more companies talk about adopting
AI and their business practices. So I think over time, over the next couple of years, we will see a shift in the positioning from the infrastructure layer to the model's data and applications layer of the AI value chain.
When though you do hear headline risk SoftBank selling its entire stake and Nvidia, Peter Tel Macro Funds selling its entire steak and in Vidia, do you suddenly get a load more calls? Do you suddenly get a little bit more of a questioning of the circularity of deals that we've had of late.
No, that hasn't been the case.
And I think it's because you can look at kind of the near term noise about who's buying or selling or some you know, very short term earnings. The long term trend of this theme has only been gaining stem and so I think a lot of our investors really look at it as has there been a structural shift here or not? And oftentimes if you're looking at thirteen f filings or just headlines. It could just be repositioning within the value chain. It doesn't represent a lesser bet
on artificial intelligence as a whole. So we continue to have a ton of conviction. Our clients have not been terribly concerned about headlines. It's really about kind of the continued adoption of artificial intelligence that's been driving so much of the interest in this fond Okay.
So maybe a buying opportunity. What about some of the cellar that you've seen in crypto. Of course significant flows have come into your ETF when it comes to the Bitcoin exposure, but that's come back of late. It must be said, how is that feeling sentiment wise?
You know, kind of similar. I mean this fond ibid is still up nearly double since we launched it just last January, so I think, you know a lot of early people are still quite excited. And then what's been changing is there's been growing of availability of ibit. So some of the major wealth platforms in the United States, which represent trillions of dollars of assets, have just enabled their advisors to be able to buy ibit, and so frankly, for a lot of people who are just getting into
the ecosystem. They're quite thrilled that they get to be able to get in off of highs as they start to think about allocating as a more structural position in people's portfolios.
Jjks a black Root. Great to check in with you, Thank you very much. Indeed, today, who are coming up? Well, we're just talking about crypto. It's supposed to be crypto's year with an administration in the White House that was more friendly to it. So why is it the digital coins have been foiling? We'll have more on that next. Will just check in on Amazon. We're going cross asset for you because we're down one point nine percent on Amazon. But that's the equity trade. The fact is it's selling
a six part bond sale. At the moment, it's first US delominated sale in at least three years, up to twelve billion dollars worth forty year debt.
Are just a percentage point.
Also over where theoretical US treasuries are trade. They're cashing in on the debt market, looking to put into data centers. It would seem from New York there's a Bloomberg tech.
Crypto. It's in sell off mode.
Still, we're currently off for the month thirteen percent. On Bitcoin, it's down twenty five percent thereabouts from its highs of one hundred and twenty six thousand dollars where it hit back in October. Ethereum, as you see, has been held
harder off by twenty percent. And look the smaller crypto Dogecoin, which of course was initially set up as a joke, it's also down fifteen percent in the last month alone, as people start to question really whether we can hold on to the gains and certainly some of the leverage that's been built into the system. Let's talk about all
of this with Blue Moost crypto reporter Miaoshen. Now, what is it that is driving the selling and the sentiment lower because we all thought the administration's adoption of crypto in many ways would just continue the asset classes rise.
Yeah, exactly.
I think what we're seeing today in the crypto market is that it's still recovering from what happened in October, where we saw this larger liquidation event happened in the crypto If you look at like both institutional and retail investors, we haven't seen any large firms coming out saying they had any blow up and stuff like that. But it does feel like sound trading shops, smaller ones might have some issues. You can see that from the open interests
of perpetual futures market in crypto. The open interests hasn't really recovered since the market crash in October. That tells me something about sound trading shops may have had issues.
Yes, I mean, remind us what happened was October the nineteenth thing? It was ever the course of a weekend, just an awful lot of leverage got pulled out the system because a sudden jarring move in cryptom and everyone then had this sort of well they were margin called. It would feel like, yes, why would we not have heard of certain blow ups? So what could have therefore been more broadly making everyone more nervous about training that's going forward.
I think we saw the number Obviously, the larger liquidation numbers are in history. I think a couple of reasons point into that. Obvious retailers are looking more leverage in the space. That's why we're seeing more sort of like cruidations events. The other thing, I think previously both most of the future's tradings are happening on centralized exchanges like finance and coin bits, right, so we can really tell. So sometimes these numbers are more like murky. You don't
know exactly what happens when large liquidation events happen. But today a lot of these tradings happens on Chin on the blockchain directly, so there's more transparency. So the numbers tend to look much bigger than previous cycles.
I think we're looking at certain atf flows.
They've been more than fifty billion since their creation, but we' seen about two billion pulled out in the last couple of months.
Where we think the most pain is it in bitcoin?
Is it the larger areas or is it some of the more sunning, riskier core old coins that have been traded and whipsored a little harder?
I think for sure from auto coins perspective, because you can see that from the prices action, right, Like you mentioned about those core not just doagecoin other like cryptocurrencies.
During the market.
Crash in October, sun Tooken's went down to almost zero, which is crazy to think about, right. I think that hurts especially retail investors because retail investors are those who tend to buy a lot of auto coins, and they got wiped out from that market crash, and right now you just don't see a lot of demand from these auto coins.
But people are still buying, Like we just had J Jacobs and Black Croc saying for many a pullback in certain of their ets means people actually buy into it. I'm seeing Michael Saylor, I mean obviously og crypto buyer and treasury stocker upper of he's doubled down on.
His digital asset treasury.
It feels like so is he making the most of lower bitcoin prices.
I think it's a two different source.
Right We're talking about the micro strategy micro sailors like Bitcoin sort of like buyers, and then we have the auto coin buyers. I think we need to separate this to as to like driving forces. I think all the bigcoins like because the fundamental is speaking, nothing really changed on bitcoins specifically. There are still buyers, but I think what's happening the market has been like sort of like got into the bigcoin market as well. That's where we're
seeing what's happening with bitcoin. I think that's the sort of aftermath what happened with all the coin crashes in the October market crash, except.
Blimberg's Miyasha, and you've got to follow her all of her work across crypto.
It's fascinating.
We thank her.
Meanwhile, coming up.
Apple set to make big changes to its iPhone designs.
And its release schedule. We're on that next. This is a BLUEBG Tech.
Apple Well, it's set to change up not just its iPhone designs but also its release cycle next year, releasing three high end phones next four, with mid tier phones to follow six months later. The latest topic in this weekend's power On newsletter. For more, Blueberg Senior Tech editor Dana Wolman joins us, Dana, why is it so significant that the timing would change?
So?
I think both consumers like us and also, frankly, Apple's competitors have gotten used to Apple releasing new iPhones every year like clockwork in the fall, and that has certain ramifications.
One.
I think consumers savvy consumers, and that's many of us know not to necessarily replace an iPhone if they don't have to in the months preceding what they assume will be the launch. And Apple's competitors have moved up the launches of their flag flagship phones, often to over the summer,
sort of getting a jump on Apple. So this would be a big change for the company if it does indeed turn to a strategy where it releases new products throughout the year, as opposed to concentrating these really powerhouse launches in one particular season.
Season, often towards the holiday season. But now they're trying to drip feed a little bit more day now. And what's interesting is that we are expecting some really seismic changes to the actual phone itself.
Yes, absolutely, And this comes on the heels of Apple introducing the iPhone Air, which Mark German said in his newsletter really feels like a test case for something even more ambitious, which would be Apple's upcoming foldable phone, And that would be just the first of several new changes to Apple's iPhone line and really just coming as part of a larger what seems like a larger spate of
product launches. I think consumers to some extent have gotten used to long lulls between Apple's product launches, and I think the launches now are going to be more frequent and just more numerous. It does seem like Apples in a period of launching more stuff, in some cases more ambitious products than perhaps consumers have come to expect.
And there must have been economies of scale to a certain extent of having one big event with all the marketing prowess around it and everyone to go and digest rather than this constant drip feed. Was that why initially it all came one big, particular wow moment.
I think that is certainly part of it, and I think the holiday timing is no coincidence. As Mark wrote in his newsletter, there were certain downsides, of course, as well, to this strategy. It sounds like it puts some strain on various teams inside Apple, from marketing to engineering, and also concentrated revenue in a certain part of the year, which is not ideal for the company. And it sounds like this new strategy is intended to address a number
of those pain points. And I didn't even mention the impact that those kind of concentrated launches might have on some of Apple's suppliers, but Mark did mention that as well in this weekend's newsletter.
Okay, and so well, Broady, who do you think the competition is that they've had to really align themselves. I just think of this season that's just gone almost to front run Apple. We had Google with its announcements just weeks before.
Samsung often tries to do it.
Is that really where some of the competitive spaces come from.
Yes, and certainly I have a very US centric point of view. So here in the US, those would be Apple's biggest competitors on the smartphone front. And then there's a whole of other competitors in China, which is a huge critical market for Apple. And and that's a market where Apple has you know, sort of plateaued a bit and has seen rising competition from domestic players. So it does have a lot of competition in different regions and
on different fronts and at different price points. I would add, not all of its competition is at the premium end. There are a whole bunch of brands, especially in Asia, that are making devices that are quite aggressively priced.
Well, said Dana Woman. Great to get the contacts. We thank you. Now it's time for talking tech and first up. Shares of Chinese giant c ATL fell from a major shareholder moved to cut its steak in the company. The latest pressure facing the energy storage maker as reports grow that the US rold makers are actually pushing to cut impults of Chinese made Brigg components, which could hit sentiment
for c ATL further. August Sanley wrote plus Google a meta, They're among those who have delayed their role out of some sea Internet cables stayed to run through the Red Sea. Now this is but it's tensions and heightened security threats have made roots more dangerous and complicated for commercial vessels.
The delays are said to be throttling.
The supply of much needed broadband in underserved countries. Now coming up, Ramp CEO Eric Glyman joins us to talk about the startup's latest funning round as its valuation jumps again. This is Bloomberg Tech. Welcome back to Bloomberg Tech. Let's check in on these markets. It's a big week. It's our super Bowl. It is in video earnings coming on Wednesday. But we're just languishing, just flat on the day as we build up to that all important macro event, let's
call it. We're off by about a tenth of a percent. Is people try to dissect what we're going to hear from the key job supports as well what we're actually going to get in terms of data the FED. But at the moment, stocks retreating bonds dollar rising a little bit. Let's move on to the individual stops that I want you to keep an eye on, though, because Alphabet higher four percent high, it's really sustaining some of the NASDAK today in large part because Basha Hawaway's been a buyer.
Huge amount almost five billion dollars worth of Alphabet shares stocked up by Berkshire have the way we got in the thirteen F filings new although in video we looked for thirty F filings coming from Peter Teel. His macro fund completely sold out of his position. Look, it's only one hundred million dollars worth, not five point eight billion dollars.
We've seen soft bankhof flow the previous week. Nevertheless, people either making the most of the share price rise, booking in profits or allocating to different types of AI trade. We're seeing Dell off by six percent though some big moves coming from that stock today along with HP, along with oempers, largely because Morgan Stanley is worrying about sluggish demand and more broadly the fact that the price of memory tips is going higher it's going to be impacting
some of the margins. Dell a significant seller and the double downgrade we got from Morgan Stanley. But let's talk in the private markets now, because we've got some big news because corporate spending management platform RAMP, it's got a new valuation and it's big. It's thirty two billion dollars comes after a three hundred million dollar primary financing round and an employee tender offer. Marks another huge jump in the start up value in a short period of time.
RAMP CEO Eric Lyman joining us now. So the money, why do you need it?
Eric?
Oh my gosh.
Well, a couple of things.
First, thank you so much for having me today, and what is a joy? We're incredibly excited to raise the signs for a couple of reasons. First, the business is growing even faster at scale. Ramp's customer base and the revenue we're doing has more than doubled over the past year.
And we find the times we're living in right now, the opportunity to invest in bringing AI to businesses around the world to automate expense reports make it easier to run a business and also invest furthers in this growth made it an easy choice to invest and serve more customers faster.
Okay, because there has been so much fits and starts of how much Generative II is actually leading to productivity. Many worrying about the ninety five percent of pilots that aren't working according to MIT.
So what's working for you?
How are you showing that this is really building productivity and or time management allocation where people can do the work they want to do, not just file expense reports.
Something that so unique about RAMP as we measure our own success by how much less money we've helped customer spend, and what we find is that the average customer that adopts RAMP is able to reduce their spend by about five percent per year, and the media and customer using RAMP is growing their revenue by about twelve percent per year,
which is more than double the US national average. I think that uniqueness on ROI, on actually showing companies where they can cut out spend, how they can automate expenses, separate us, and I would argue makes us part of that five percent of in that study where people are finding is actually very very useful and.
They actually demanding real detail. I loved some of the notes that I got that your treasury agents moved five point five million dollars of idle cash into four percent investments.
Your policy agent.
Prevented five hundred eleven thousand out of policy transactions. Is that the granularity that people want to see?
Yes, it is because I think for a lot of companies, really they're looking to understand. Okay, I know that time is money. If you're a company, every hour that you're paying someone, let's say, to do their expense reports, is an hour that they're not selling the next customer, reporting on the news, whatever really drives value to that business and ramping able to show this was attempted to spend that on a different type of program would have gone through.
This is time your people would have been doing these low value tasks instead, that's automated. The spend didn't occur in the first place. The categorization is done for you makes a real difference. And for a CFO, I think is really all that matters. It's about the bottom line and that's what we deliver.
And it matters to the CEO because they want time allocated in a different way. I saw that Brett Taylor of Sierra and also the chairman of open AI was quoted saying, you know his talent and therefore better placed to be working on the agency wants to build, not filing at Spenser Sports. But but you talk about that
twelve percent average revenue growth your customer base. Is that because you are serving companies like Sierra startups rather than the Fortune five hundred or the bigger kind of companies that perhaps don't have the revenue growth that startups do.
It's a great question.
First, you know, I like to believe the most disciplined and well run companies, of course, will be adopting we think the most cutting edge tools in the market, which is ramp that helps people just run leaner. But I think the majority of our customers, by a long shot, are actually traditional businesses farms, nonprofits, restaurants, hospitals, traditional businesses that you would not expect in many ways to be cutting edge adopters for them. They're looking for easier to
do expense reports. You know you might be used to. You know, it's the worst out of your month doing expenses for them. They tap a card, it does itself. They upload an invoice. Our ocr will go and automatically categorize the transaction, set the payment date to the data to actually due, so you're not losing a dollar out
in interest and then categorizing the transaction for you. And so I think you know when you look at the type of businesses, these are leaders like CBRE, Shopify, the Boys and Girls Clubs of America, businesses of all shapes and sizes. I actually think are looking, especially in these times, get more from every dollar an hour.
Your venture backers are a who's who lists. Basically light speed has led this financing. But you've got co to of an air thrive. We've got fans one so many of them continuing to back you. But I want to go to the talent side, because there was an opportunity for your employees to tender their shares. How many did or how many are holding on thinking thirty two billion isn't the end of it.
It's people at RAMP are very very excited about the momentum. I mean, just to give you some context, RAMP is now larger than the media and publicly traded SaaS company, and our gross profit, which is a great measure of our profitability, is growing ten times as fast, and so no doubt, I think people are very very excited. There's a lot more to deliver. The process is ongoing. But for us, whether an employee chooses to sell or not
to sell. It's very valuable, especially in building a public company, to know that you have the option that you can say yes or no to selling some shares. And we think that's a great thing.
Building a public company.
Will address that timeline next time, Ram ceo Eric Clyman's got to catch a flight. But it's been so good to have you in the show. Thank you very much. Indeed, meanwhile, coming up, go back to the markets for Fionnas and Cultus City Index, Scena market analyst.
No, we'll all thinking about as in video results.
That's next.
This is Bloomberg Tech. The pressure on Tech, well.
It's coming as traders are suddenly getting more selective about the AI beneficiaries.
Two stocks that show the.
Divergence a micro core Weave and Micron now shares of compute provider care Weave as you see, down forty four percent in a month, while Micron has seen a twenty four percent rise on demand for its memory chips.
Bloomberg Execut's reporter.
Com and Ryanicky has been writing about what seems to be suddenly some discernment coming from the investor base. Let's take call Weave first and foremost, it's still much higher than it's IPO. But why are we suddenly seeing a bit more pressure on the stock.
Yeah, so we've really switched from a capex discussion back to an ROI return on investment discussion, and traders are really looking for the ROI. They want to see that all of the spending on AI is paying off and that it's really making a difference to companies, either top line or bottom line. And so with core Weave, that's a little bit of the concern. You know, they're spending a lot, are they actually seeing a return on investment?
And then the other thing with coreve is that they're financing a lot of their growth with debt, and so those the difference in balance sheet is something that's also really coming into focus here with traders saying, you know, even though they grew revenue, I think they doubled.
It in the last quarter, that debt is an.
Issue and they just want to make sure that it's going to be you know, okay going forward.
Yeah, the same sort of concerns.
Nervousness crept in when Meta sold thirty billion dollars of bonds, but then Alphabet gets a pass, they sold debt and we're seeing Amazon come to the market as well. Today. I'm interested then on the halves because Mike Cron look memory flying off the shelves. It seems as though their share price is rocketed this year totally.
And it's really interesting because it's it's all of this demand that we hear about, right, there's incredible demand. People are making these huge forecasts, but it's really balancing it with the other pieces of the puzzle on the balance sheet, and I think that's why we're seeing Micron do so well as opposed to Oracle. Remember had that huge spike
when it said it had this incredible revenue forecast. But as it's taken on more debt and some of those other things have shifted, it's sold off all of.
That huge jump.
So I mean, as you said, Alphabet getting a big jump, this yame, I mean Berkshire Hathaway's stake off, so probably ducing that. But we're just seeing a huge sort of diversion in the names that people are flocking to and then selling off.
We want to know who's got the margin and who's got the capital to be able to afford all the investment. It's so good. Your writing's always brilliant common rhinicky. We appreciate it. Meanwhile, more on the AI anxiety in the markets that are just skittish ahead of Nvidia's numbers, fas and cultures with us in City Index Financial Markets senior.
Analysts, we just come off this conversation in common.
Where people are deciding that they would perhaps sell some of their previous winners and certainly ones that have taken on a lot of debt.
Is that something you'll say, yes.
I think we are seeing that investors are becoming more selective over where they want to invest as far as the AI trade is concerned. I mean, previously it had just sort of been invested in AI and anything that
really mentioned AI seem to be a winner. But I think whereas we we're sort of seeing this AI trade mature, investors are taking their time to become more selective, questioning, you know, how this is going to be monetized, what can actually be how it will be used, rather than just jumping on the AI trade more broadly.
Should they be questioning in video.
That's a great question. I mean, you know, it's very much in focus for our clients. This is you know, one of the key earnings or the key earning I would say each season. And obviously we have seen you know, the likes of soft Bank leeder Thals selling out entirely of then the video holdings. I do think there is that this is a litmus tech. You know, can the chip maker continue powering the AI rally that's really you know, defined the broader market tech tech rally this year. I
think there are some reasons to be positive there. You know, we heard from CEO Huang in October that there's four hundred billion dollars worth of orders for chips that are very much at the heart of this AI boom, so that is a strong order book. But obviously, at the same time, we have seen really impressive rally in this share price, and we know that growth is strong but slowing. But I think broadly speaking, I think it will be fair to say that there is potential for that AI
rally to still continue to run further. There are concerns obviously about that circular deals around one trillion circular deals that we've been seeing. I think that's what the market's nervous about. So, you know, any insight into that I think would be helpful.
What about the concentration that comes with n Video. I think it was last earnings report about thirty nine percent of orders are coming from just two key hyperscalers. Is that something that people are worrying about, not only the secularity of deals, but the over reliance I'm just say a few players.
Yeah, I think that is going to be again, you know, remaining a point of concern. As you mentioned, if you've got sort of you know, fewer customers or fewer big clients, then obviously there is a risk that is attached to that. So you know, any broadening out of that is going to be good news as far as the stock is concerned.
And obviously, you know, we are saying that the market is nervous, and I think we do see this every time we come to Nvidia earnings in recent quarters, that there is a little bit of nervousness surrounding the numbers. And I think that does come with reason. You can't just jump blindly into a trade, but I think there is still reason to be positive.
Can you balance, therefore, just the level of rationality in the market right now, and whether you give credence to the worries over a bubble or whether actually this is just how growth is likely to continue. Yeah, do you know.
I mean, as you point out, there have been so many discussions surrounding are we in bubble territory comparisons.
To the dot com era?
But you know, I think that the market is still acting rationally. It is still questioning whether you know, these are valuations which are acceptable. And I think that does point to a market which, as I said, is acting rationally, which does go against that bubble narrative. But I think, you know, we do need to be moving this forward as well and questioning, you know, how will this be monetized, will demand actually be met? You know, what are the
strains that could appear? So I think that is the signs that the market is right asking the right questions.
They're asking those questions around the equity side. What about the bond market offerings that we're seeing coming thick and fast. How much you're seeing just a desire to begain AAI exposure from names like an Amazon that hasn't sold dollar dormandy and debt in three years.
Yeah, So this is really interesting and I think it does point to this.
Sort of almost insatiable demand.
I think that you know, there are reasons to be cautious and again, you know, going back to that idea of being making sure you question investments before jumping in is always a good idea. And I think, you know, creating these these the bond sort of aspect of this trade is quite an interesting take on it.
And one that will be following closely any cause. On crypto, ah, do.
You know, Crypto is a really interesting one at the moment. You know, I think we saw that rejection last week about one oh seven level, but I think you know the fact that we've taken out some really key technical levels. The fifty week SMA was one that I was watching very closely. We're seeing that that institutional demand has really faded. Long term sellers, long term holders are selling, So I think there's a lot of reason to be cautious.
That said, you know, I think the levels.
That we're holding around at the moment, that's ninety three thousand, I think as long as that holds, and there could be potential if we see institutional demand return for a move higher. But I think, you know, the market still feels a bit fragile after that massive liquidation of an in early October, which is causing that reason for caution we.
Like you're talking technicals on simple moving averages. We appreciate it for Ona Sinkotta, as City and x stay well. Coming up, Ford strikes to deal with Amazon to sell used cars on the e commerce website. We'll talk about the reason and the impact on other online car dealers.
That's next. This is a Bloomberg tech.
Ford seaming up with Amazon to sell it's used vehicles directly through the e commerce trant, becoming the second major automator after Hyundai, to list cars on massive online retailer. Let's get more, Brie Exalter reporter Keith Norton. So, Hono went first. Now Ford is doing it? And am I going to Amazon dot com and finding my forward there or have they got other areas in which I'm gonna be able to navigate?
Yeah? So I mean it's certified used vehicles from Ford. Initially Handai does new vehicles through Amazon, and yeah, it is your very familiar, you know, add to my cart kind of Amazon experience. You can do the financing, you can browse the site and pick your car, and then you pick it up from a dealer. You do the final paperwork at the dealer. You can do a test drive at the dealer if you'd like to as well.
What's interesting is that it did have an impact on CarMax, on Kavana, on others that are selling used cars and used vehicles. How much of a significant player do you think Amazon could become?
Yeah, I mean they are Amazon, right, so if they really get into this and that is their goal, they could become a very significan player. So you saw those two carbon or carmets dropped initially on the news, although carvan is back up again. So you know, I think it does stimulate interest in the category of online car buying, which a lot of consumers, you know, it sounds good to them because it reduces the hassle, reduces the time. It's the sort of no haggle, one price selling. A
lot of people like that option as well. So it is something that has promised.
What about new vehicles? Would they dip that toe.
That Yeah, I mean that's kind of what Ford was telling me. You know, they're going to see how it goes with this certified used program. And you know, these are cars that receive multiplaying inspections. They have a manufacturer's warranty of up to a year and twelve thousand miles on some of them, so it is sort of new car light, if you will. So if that goes well, they may do as Hyundai is doing and sell new cars on the site as well.
And mess Keith Norton is a great story. Thanks for sharing. It's a busy day for Amazon more broadly, as it announced its first dollar denominated bond sale in three years. It aims to raise twelve billion dollars a six part debt offering. The mex expense of Soaper is here to explain why Amazon might be tapping the debt market. Have a feeling of something about data.
Centers, Yeah, exactly. They've been spending a lot on data centers and this is more more fuel for that. They're coming in a little lighter than some of their competitors in terms of the amount they're looking to raise a twelve billion. Others have raised thirty billion, twenty five billion when we look at like Oracle and Google and Meta.
So they're coming in a little bit light. But that also might just be an indication that they have more cash flow available to keep these investments going on a running basis, and they're looking at one hundred and fifty billion in twenty twenty six.
Onex wow, and twelve billion is but a bit of a drop in the ocean in that respect.
But I can understand when you're able to sell forty a debt a just a percentage point.
Over theoretical US Treasury is it looks like a relatively cheap way of financing some of these big names. But Spencer, where have we understood where the big expense is coming full from Amazon in terms of the data center one.
Hundred and fifty billion.
Is it going into the land, Is it going into the infrastructure? Is it going to building their own chips as well?
But a bit more.
Yeah, it's going into all of the above, and they can't build them fast enough. And a big consideration is still power, you know, is still once they build these facilities where they have the you know, sufficient energy to power them. So yes, it's it is a race, and they just want to make sure that they have the capital available that take care take advantage of any opportunities as they come.
It feels hard, I'm sure for those that have recently been said that they're being like go from the company though.
Just yeah, of course, you know, Amazon recently laid off you know, more than ten thousand workers, and yes, but you're just going to see them constantly recalibrating. It's such a vast business and they have so many you know, operating lines that some are getting more efficient because of AI, and they're letting people go, but then they're going to keep investing in hiring in the artificial intelligence race to make sure that that they're keeping up with their peers.
And briefly talking of AI race, it looks as though finally Jeff Bezos might becoming a CEO at least a co CEO again. Project Prometheus has been reported on the New York Times, So we could be launching a startup.
Yeah, that's very interesting report, and it also just highlights how even Bezos has to diversify in the AI race, you know, because when these kind of technologies emerge, there's always a question of you know, you have these big established companies that can throw a lot of money at it, but they also have all of these encumbrances in terms of their existing operations and will that you know, is it better to have a pure place startup looking at
artificial intelligence inclusively to plow ahead. And so it is interesting to see him going going solo with a new a new artificial intelligence startup.
Yeah reports that it's going to have six billion dollars out the gates and it's AI for engineering and manufacturing of computers, automobiles, and spacecraft. We know we liked Blue Origin. Meanwhile, bluebgg Spencer Sofa, thanks so much for breaking it all down.
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