IBM Doubles Down on AI, Palantir Falls Short | Bloomberg Technology
>> FROM THE HEART OF WHERE INNOVATION MONEY AND POWER COLLIDE IN SILICON VALLEY AND BEYOND. THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: COMING UP, THE CEO OF IBM JOINS THE SHOW AS BIG BLUE PROMISES TO SIMPLIFY AND SCALE ENTERPRISE AI. PALANTIR TUMBLES DESPITE RAISING REVENUE FORECASTS AND EARNINGS FAILED TO LIVE UP TO ITS CURRENT VALUATION. TESLA AS MONTHLY SALES CONTINUE FALLING HARD ACROSS EUROPE. BUT FIRST WE CHECK IN ON THESE MARKETS. WE HAVE THE FED COMING OUT
TOMORROW LIKELY HOLDING RATES BUT COULD WE GET A HAWKISH COMMENTARY COMING OUT OF THE FED CHAIR. THAT'S WHAT BLOOMBERG INTELLIGENCE IS EXPECTING. THE NASDAQ 100 UP AS WE HEAR THE TREASURY SECRETARY GIVING EVIDENCE ON THE HILL AS WELL. WE ARE STILL DOWN BY 7/10 MORE BROADLY AS WE HAVE ANXIETY ON TRADE. INDIVIDUAL MOVERS ONE OF THE KEY STOCKS THAT TURNS US LOWER THAT 12%.
STILL THE BEST PERFORMER ON THE NASDAQ 100 THIS YEAR. BUT THE FORWARD-LOOKING GUIDANCE IS NOT ENOUGH TO SUBSTANTIATE AN EXTRAORDINARY VALUATION. WE WILL DIG INTO THAT LATER IN THE SHOW. IBM TRADING FLAT MANAGING TO OUTPERFORM THE REST OF THE MARKET, WE WILL GET OUT TO THEIR ANNUAL EVENT WHERE THEY UNVEIL MORE SOFTWARE TO ALIGN AI, WE WILL HAVE ARVIN KRISHNA IN A MOMENT. WE GO TO U.S. SECRETARY -- TREASURY SECRETARY SCOTT BESSENT SPEAKING ON EFFICIENCY ON BUDGET CUTS AND THE STATE OF THE U.S. ECONOMY.
TYLER KENDALL JOINS US FROM OUTSIDE THE WHITE HOUSE. IT SEEMS TO BE PUSHING ON DOGE AND WHAT'S BEEN TOUCHED HERE. TYLER: THIS IS AN OVERSIGHT HEARING SO IT WAS WIDELY EXPECTED THEY WOULD PUSH HIM ON DOGE, THE TREASURY SECRETARY SAYING IT IS THE DEPARTMENT OF GOVERNMENT EFFICIENCY NOT GOVERNMENT EXTINCTION. THE TENT -- HE INTENDS TO BRING IT -- KEEP IT UP AND RUNNING BUT DID NOTE HE HAS ALREADY CUT $2 BILLION FROM THE IRS WITHOUT ANY DISRUPTION. BEYOND THAT HE DID GET INTO SOME TARIFF POLICY GRILLED BY THESE LAWMAKERS WHO WANT MORE CLARITY WHEN IT COMES TO THE TRADE STRATEGY AHEAD. HE DID SAY AS OF NOW THE U.S. HAS NOT ENGAGED IN NEGOTIATIONS WITH CHINA BUT REITERATED WHAT WE'VE HEARD FROM THIS ADMINISTRATION, WE COULD EXPECT LUMINARY FRAMEWORK AGREEMENTS AS SOON AS THIS WEEK.
HE ALSO OUTLINED SOMEWHAT OF A TIMELINE HERE. HE SAID ULTIMATELY WE COULD SEE 80% TO 90% OF 15 TROPPO -- TOP TRADING PARTNERS CLINCH DEALS BY THE END OF THIS YEAR. WHEN ASKED ABOUT THE IMPACT CONSIDERING SCOTT BESSENT HAS BEEN THE FOREFRONT OF TRYING TO DEFEND THIS ADMINISTRATION'S ECONOMIC POLICIES, HE SAID HE IS NOT CONCERNED ABOUT THE U.S. RECESSION AND IS BLOOMBERG ECONOMICS CAUTIONS THAT DOESN'T NECESSARILY MEAN THEY WILL BE REVISED UP. THIS IS VERY IMPORTANT HERE. WE WERE WONDERING IF WE WERE
GOING TO GET A FIRMER DAY WHEN THE U.S. GOVERNMENT COULD DEFAULT ON ITS DEBT BECAUSE THAT IS SEEN AS THAT HARDLINE NUMBER THAT LAWMAKERS ARE UP AGAINST A PASS THE RECONCILIATION PACKAGE THAT THIS ADMINISTRATION IS BANKING ON WHEN IT COMES TO THEIR TAX-CUT AGENDA. HE SAID IT IS FORTHCOMING BUT CANNOT GIVE LAWMAKERS THAT UPDATED NUMBER BECAUSE THEY ARE STILL SORTING THROUGH THE TAX RECEIPTS FROM APRIL. CAROLINE: THAT'S WHAT'S GOING ON ON THE HILL. SIMULTANEOUSLY WE GO TO WHAT'S HAPPENING WITH IBM. I AM PLEASED TO WELCOME THE CEO
FROM THE COMPANY'S THINK CONFERENCE. AND I AM EXCITED TO HEAR FROM YOU THE PACE OF CHANGE THAT'S HAPPENING. I THINK YOU PUT OUT IN THREE YEARS TIME THERE WILL BE ONE BILLION APPS.
IT IS SO NOISY IT IS CLUTTERED, HOW ARE YOU MANAGING TO STREAMLINE THAT FOR YOUR CUSTOMERS? >> FIRST I THINK THE NUMBER IS A REALLY FASCINATING NUMBER. A BILLION NEW APPLICATIONS USING AI, A THIRD OF THEM AND THE WAY WE ARE APPROACHING IT IS WHY NOT MAKE IT EASIER FOR CUSTOMERS LEVERAGE THEIR OWN DATA, CONSERVE THEIR OWN DATA TO THE MODELS AND THEN LEVERAGE IT TO MAKE THE ENTERPRISE A LOT MORE PRODUCTIVE. THAT'S WHAT WE JUST ANNOUNCED TO ORCHESTRATE WITH THEIR CAPABILITIES INCLUDING 150 NEW AGENTS, SOME FROM US AND SOME FROM OUR PARTNERS. CAROLINE: SOUNDS LIKE AN EXTRAORDINARY
NUMBER. YOU HAVE A BIG BOOK OF BUSINESS WHEN IT COMES TO GENERATIVE AI. $6 BILLION AND GROWING BUT HOW MUCH ARE YOU SEEING THE CEOS YOU SERVE PUSHING BACK ON OVERWHELM? HOW ARE YOU HELPING THEM NAVIGATE WHAT FEELS LIKE IN SOME WAYS A LESS THAN PRODUCTIVE ENVIRONMENT FOR THE AMOUNT THEY ARE INVESTING IN GENERATIVE AI. ARVIND: I THINK WHAT CEOS ARE CONCERNED ABOUT IS NOW THE AIR OF EXTREMITY SHE IS OVER. AS THEY ARE DOING THAT, THEY DISCOVERED ABOUT 25% OF THE TIME THESE PROJECTS ARE PAYING OFF VERY WELL FOR THEM.
TO LEARN FROM THAT 25 AND THEN FIGURE OUT WHAT ARE THE INHIBITORS IN THE OTHER 75 AND TAKE THOSE OUT AND THOSE ARE INVARIABLE AS FRAGMENTATION AND THE ENVIRONMENT. SO HOW DO YOU HAVE A MORE INTEGRATED ENVIRONMENT. YOU HAVE TO MAKE SURE THERE IS VALUE IN THE AI PROJECTS.
DON'T JUST DO AN EXPERIMENT AND LEAVE IT ON THE SHELF. YOU HAVE TO SCALE IT. SO HOW DO YOU CREATE THE RIGHT HYBRID ENVIRONMENT. AND THEN WE BELIEVE 35 WILL GO ALL THE WAY UP TO 50 AT WHICH POINT THAT'S A GREAT RETURN FOR THE CEOS. CAROLINE: THAT SOFTWARE YOU ARE UNVEILING, THOSE CONSULTING PROVIDING AT THE MOMENT.
HOW MUCH IS THAT BEARING FRUIT IN THIS CURRENT ENVIRONMENT. HOW WILLING ARE THE CEOS TO EXPERIMENT AND MOVE ON WHEN WE'VE GOT A REALLY UNCERTAIN ECONOMY ON OUR HANDS. ARVIND: I AM MORE OF AN OPTIMIST ON THE USES OF TECHNOLOGY IN THE CURRENT ENVIRONMENT THAN A PESSIMIST. WHY DO I SAY THAT? YOU HAVE SUPPLY CHAIN ISSUES, YOU HAVE COST ISSUES, PRODUCTIVITY ISSUES. TECHNOLOGY BECOMES AN ANSWER TO HELP SCALE THE BUSINESS WITHOUT HAVING TO ADD A LOT OF PHYSICAL COST. I FIND THE APPETITE OF THE CEOS IS QUITE HIGH TO SPEND ON TECHNOLOGIES.
CALLING IT SHOCK TO MEDIUM-TERM. SIX MONTHS, 12 MONTHS. I FIND PEOPLE LEADING IN -- LEANING IN VERY HEAVILY. I SEE IT REMAINING ROBUST DESPITE ALL OF THESE ISSUES THAT COULD BE TALKED ABOUT. CAROLINE: WHAT ABOUT GOVERNMENT AT THE MOMENT. SCOTT BESSENT GETTING GRILLED ON THE HILL AT THE MOMENT AND THAT HAS HAD IMPLICATIONS FOR YOUR OWN BUSINESS.
WE UNDERSTAND 15 CONTRACTS HAVE BEEN CANCELED. OR MORE TO COME, ARE YOU SEEING AN END TO THAT PROCESS. >> I ACTUALLY CHOOSE NOT TO WORRIED ABOUT DOGE.
WERE WE HAVE ROBUST CONTRACTS, WE HELP THE GSA ON EXPENSE MANAGEMENT, WE HELP THE DOD ON PAYROLL. THOSE HAVE BEEN VERY ROBUST AND I DON'T BELIEVE THAT THOSE WILL COME UNDER ANY SIGNIFICANT ATTACK. AREAS UNDER ATTACK ARE MUCH MORE ABOUT DISCRETIONARY OR MUCH MORE TIME IMMATERIAL OR LABOR AUGMENTATION BASED. THOSE MAY COME UNDER ATTACK. IT DOES NOT WORRY ME. I BELIEVE EVEN IF THOSE COME UNDER ATTACK THERE IS MORE THAN ENOUGH SET FROM -- OFFSET FROM AREAS. CAROLINE: ANY CANCELLATIONS WILL BE OUTWEIGHED BY BUSINESS YOU CAN POTENTIALLY WIN WITHIN THE GOVERNMENT AS WELL? ARVIND: I BELIEVE FROM HAVING TALKED TO VERY SENIOR MEMBERS OF THE ADMINISTRATION THERE IS A HUGE APPETITE TO USE TECHNOLOGY TO MODERNIZE GOVERNMENT AND HELP MAKE GOVERNMENT ITSELF MORE EFFICIENT.
YOU ALSO WILL HAVE TO INVEST IN TECHNOLOGY AND I BELIEVE AND NOT JUST MY BELIEF BUT I'VE SPOKEN TO THEM THEY HAVE AN APPETITE TO DO THAT. CAROLINE: AIR TRAFFIC CONTROL AND TRUNK HIMSELF TALKING ABOUT MAYBE RAYTHEON AND IBM COMING IN TO HELP SOLVE SOME OF THE REAL ANXIETIES WITH THE LOSS OF RADAR HAPPENING IN NEWARK. IS THAT PROGRESSING, ARE YOU ABLE TO SHARE ON HOW ANY SORT OF CONTRACT MIGHT SHAPE UP? ARVIND: I DON'T WANT TO TALK ABOUT ANY SPECIFIC CONTRACT OR AGENCY. BUT I THINK WHAT WAS JUST POINTED OUT WAS A GREAT EXAMPLE WHERE TECHNOLOGY WILL BE PART OF THE ANSWER. WET -- BETTER INTEGRATION,
COMPETING CAPABILITIES, ALL OF THOSE WILL PLAY A ROLE BECAUSE RIGHT NOW WE ARE LIVING ON NOT EXACTLY BUT ESSENTIALLY LET'S CALL IT A SLIGHTLY EVOLVED SYSTEM IN THE 1970'S. >> WHAT'S CRUCIAL ABOUT AIR TRAFFIC CONTROL IS ACCURACY. THAT'S ALMOST WHERE EVERYONE'S EYES ARE WHEN IT COMES TO GENERATIVE AI IS THE RISK OF THE UNDERLYING DATA BEING INACCURATE AND HOW THAT COMPOUNDS.
HOW ARE YOU MANAGING TO TACKLE THAT AREA OF ANXIETY AND REALITY. ARVIND: I BREAK THE PROBLEM DOWN. THE CORE OF AIR TRAFFIC CONTROL HAS TO BE BUILT ON VERY PRECISE DATA, COMPLETELY ACCURATE DATA. YOU ARE NOT GOING TO USE THAT TO ESTIMATE WHERE IT IS.
THAT WILL BE BASED ON PHYSICS AND HARD ENGINEERING. GOOD AI COMING IN OPTIMIZED AND WORRYING ABOUT HOW YOU INCREASE TOTAL FLOW AND CAPACITY AT AN AIRPORT PERHAPS BUT I'M USING THE WORD PERHAPS BECAUSE THERE WAS A LOT OF CAREFUL WORK TO BE DONE THERE. BUT COULD THIS BE USED TO PROCESS CLAIMS FASTER AT SOCIAL SECURITY OR THE V.A., ABSOLUTELY. AND THEN YOU MAKE CITIZENS
HAPPIER, DELIVER SERVICES FASTER AT A LOWER COST. THAT'S WHERE I WOULD GO FIRST. >> IN THE PRIVATE SECTOR, THEY ARE LOOKING FOR ACCURACY AND THAT IS SOMETHING YOU'RE OFFERING AT THE MOMENT. JUST SEEING THE ADOPTION AND THE USE OF PRODUCT OF A GENT TO K.I.A. BEING LIMITED BY -- AGENTIC AI. ARE WE RESOLVING THAT ALREADY. >> START WITH THE USE CASES, BUT YOU DON'T NEED TO BE 100% ACCURATE. IF YOU THINK ABOUT CUSTOMER
SERVICE, YOU THINK ABOUT EXPERIENCE, I THINK ABOUT OUR INTERNAL HEALTH LIST. THOSE ARE AREAS WE ARE DEALING WITH PEOPLE, YOU HAVE A 10 OR 15% RATE. SO NOW YOU CAN ACTUALLY HAVE A LOWER ERROR RATE THAN THAT BUT MAYBE NOT PERFECT BUT YOU CAN STILL LIVE WITH IT. CAROLINE:
THINK IS ALL ABOUT INNOVATION. I'M LOOKING AT THE CAR BEHIND YOU, THE WAY IN WHICH YOU ARE PUSHING THE AGENDA NOT ONLY WHEN IT COMES TO HYBRID, BUT THINKING ABOUT THE INNOVATIONS ON MAINFRAMES, BLOOD QUANTUM. ARE YOU GETTING QUESTIONS ON QUANTUM RIGHT NOW? SCOTT BESSENT WANTS THE U.S.
TO LEAD IN AI AND QUANTUM COMPUTING. ARVIND: WE ARE VERY PLEASED WITH THE INNOVATION. WE CAN DO 450 BILLION AI INFERENCES PER DAY. WE JUST ANNOUNCED THIS QUARTER. THINK ABOUT USING THAT IN FINANCIAL SYSTEMS TO HELP REDUCE FRAUD.
THAT IS AN INCREDIBLE AREA OF INNOVATION. QUANTUM, PART OF THE REASON WE ANNOUNCED THE INVESTMENT LAST YEAR INTO QUANTUM AND WE BROUGHT OUT THE QUANTUM SYSTEM TWO THIS YEAR IS WE ARE VERY EXCITED WHERE THAT WILL GO. THAT IS AN AREA WE BELIEVE THE U.S. MUST AND CAN LEAD ON QUANTUM COMPUTING FOR NATIONAL SECURITY BUT ALSO FOR COMPETITIVE ADVANTAGE AND GROWING A BUSINESS. CAROLINE: DOES THAT CONTINUE TO GROW IN
THE UNITED STATES? YOU JUST UNVEILED A HUGE AMOUNT OF INVESTMENT INTO THE U.S ARVIND: WE PUT 150 BILLION INTO THE U.S.. WE BELIEVE IF I LOOK AT AI, HYBRID AND A LOOK AT QUANTUM COMING, THE GROWTH OPPORTUNITIES ARE HERE. WE WANT TO INVEST TO TAKE ADVANTAGE OF THESE OPPORTUNITIES. CAROLINE:
LIVE FROM THINK, WE VERY MUCH APPRECIATE YOUR TIME TODAY. WE ARE ALSO WATCHING SHARES OF OTHER PROVIDERS. ONE OF THE PARTNERS OFFERING IS SERVICE NOW. ITS FLAGSHIP GENERATIVE AI SOFTWARE PRODUCT APPARENTLY IS GOING TO HIT $1 MILLION IN ANNUAL CONTRACT BUSINESS. SHARES IN LINE WITH THE REST OF THE MARKET.
MORE NEXT, THIS IS BLOOMBERG TECHNOLOGY. >> LET'S GET BACK TO THE STATE OF THE MARKETS CURRENTLY UNDER PRESSURE TRYING TO CONSIDER WITH THE TARIFF IMPACT IS. SCOTT BESSENT TESTIFYING ON THE HILL SAYING THERE WERE NO SIGNS OF A RECESSION. PLEASE WELCOME HEAD OF MARKET ANALYSIS. FOR A TECH INVESTOR RIGHT NOW THE ANXIETY HAS BEEN AROUND VALUATIONS OF BIG TECH IN THIS CURRENT ENVIRONMENT. DO YOU THINK WE ARE OUT OF THE WOODS ON A RECESSIONARY ENVIRONMENT.
IS IT STILL TOO EARLY TO CALL? >> THANK YOU FOR HAVING ME. I THINK IT IS TOO EARLY TO CALL BUT THE BASE CASE IS NOT RECESSION. WE SAW FROM THE LATEST MARKET DATA THAT THE JOB MARKET IS PRETTY RESILIENT AND I THINK IT WILL TAKE A LOT MORE PAIN FOR US TO GO INTO A RECESSION. I UNDERSTAND TARIFF IS CREATING
A LOT OF ANXIETY AND OBVIOUSLY A LOT OF PARALYZES ON TRADE FLOW INVESTMENT POSITIONS BUT THERE ALSO WHAT'S HAPPENING, AND POTENTIAL TAX PACKAGE THAT IS GOING TO HAPPEN. I THINK THE U.S. THINGS ARE LOOKING OK AS WELL. I THINK IT'S PREMATURE TO CONCLUDE THERE WOULD BE A U.S. RECESSION. OBVIOUSLY THE STAKES ARE HIGH.
>> MUCH HAS BEEN SAID ABOUT THE U.S. IS A GOVERNMENT AND ITS BUYING OR INDEED PULLING BACK ON EXPENDITURE. WE JUST HAD THE IBM CEO JOINED THE SHOW SAYING HE'S MORE THAN CONFIDENT ANY NEW BUSINESS WITHIN THE U.S. GOVERNMENT WILL OFFSET FOR ANY CONTRACTS CUT. PALANTIR SHOWING REAL RESILIENCY IN THEIR U.S. GOVERNMENT OFFERING. HOW MUCH ARE YOU SEEING BIG TECH BEING ABLE TO WEATHER AT THE MOMENT ANY DIAL BACK IN GOVERNMENT SPENDING BUT ALSO PRIVATE SECTOR SPENDING.
>> I THINK WHAT WE LEARN FROM THE LATEST EARNINGS RESULTS REGARDING BIG TECH IS THE CAPEX ON AI REMAINS UNCHANGED AND THERE IS STILL SOME PICKUP AND THAT SPENDING. I THINK DESPITE THE DISTRACTIONS ON TARIFF AND THE CYCLICAL OUTLOOK I THINK THE LONGER-TERM AI THEME REMAINS DEBATABLE. THAT'S ONE AREA WHERE IT CAN DRIVE PRODUCTIVITY AND THINK THAT'S AN AREA AS WAS INTENDED AND HAPPY TO SPEND ON. SO I THINK A LOT OF THAT IS IN TACT. DESPITE THE RECENT POLLS IN SOME INVESTMENT POSITIONS THERE IS SOME TO BE EXCITED ABOUT. CAROLINE: IT IS INTERESTING THAT FOCUS ON SPENDING HAD REALLY BENEFITED THE HARDWARE OFFERING OR AT LEAST THE CHIP DESIGN SIDE WHEN IT WAS 2024.
2025 THE OUTPERFORMANCE HAPPENED IN SOFTWARE OFFERINGS SUCH AS IBM AND PALANTIR. IS IT STILL ABOUT A SOFTWARE WIN RIGHT NOW OR CAN YOU GO BACK TO HARDWARE? JANET: IN THE NEAR TERM THE SOFTWARE SIDE WILL LIKELY STILL OUTPERFORM AND BE THE INVESTORS PREFERENCE. IT'S A TRADE UNCERTAINTY THAT IS TOP OF MIND AND THERE IS SOME SCALE BACK ON TARIFFS, BUT A BIG QUESTION MARK REMAINS.
YOU CAN ALL -- ARGUE IT IS LESS IMPACTED. SO IT IS LOGICAL TO MAKE THAT THE CONCLUSION. HAVING SAID THAT ON THE HARDWARE SIDE, VALUATIONS OF SOME KEY INFRASTRUCTURES STOCKS HAVE COME DOWN AND IT IS REALLY QUITE FAIR AND VALID TO BE HONEST. A LOT OF THE CONCERNS ON PUBLIC VALUATION HAS COME BACK DOWN. IT ALSO PRESENTS GREAT OPPORTUNITIES FOR LONG-TERM INVESTORS BECAUSE THOSE ARE GREAT COMPANIES. CAROLINE: I AM GOING TO GO GLOBAL WITH YOU.
I'M INTERESTED IN HOW TECH IN EUROPE HAS PERFORMED. ASML, PINUP FOR THE INDUSTRY IS DOWN A LOT. HAS THERE BEEN BUYING OF EUROPE IN OTHER REGIONS? ARVIND: OVERALL -- JANET: OVERALL SPEAKING, THE TREND IS WE ARE SHIFTING A BIT MORE OF EXPOSURE FROM THE U.S.
TO EUROPE. I THINK IT'S FAIR ENOUGH GIVEN WHAT'S HAPPENING AT THE MOMENT. AND EUROPEAN TECH FOR EXAMPLE THOSE ARE GLOBAL LEADERS, HAVING A MONOPOLY ON THE MACHINE THAT PRODUCES THESE CHIPS. I THINK THERE ARE SOME CONCERNS IN THE NEAR TERM CYCLICAL DIFFICULTY BUT OVER THE LONG TERM YOU'RE STILL PRETTY CONFIDENT ON THESE SECTOR LEADERS. CAROLINE:
YOU CAN GO CROSS ASSET FOR US. THIS HAS BEEN A BIG WEEK FOR CORPORATE DEBT SALES FOR BIG TECH WHEN YOU THINK ABOUT APPLE COMING AFTERWARDS EARNINGS. GOOGLE LAST WEEK FOR THE FIRST TIME IN YEARS. HAVE YOU SEEN MORE APPETITE
ACROSS THE FULL BREADTH OF ASSETS WHEN IT COMES TO TECHNOLOGY? JANET: IF YOU TALK ABOUT CORPORATE DEBT, RIGHT NOW WE HAVE A PREFERENCE ON GOVERNMENT BOND OF JUST PURELY ON THE BONUS SIZE. IT REALLY DEPENDS ON SPECIFIC SECTORS AND ISSUERS. GENERALLY SPEAKING WE DON'T THINK THE CONFERENCE REFLECTS THE POTENTIAL RECESSIONARY'S. IT'S A BASE CASE FOR SURE. BUT WE JUST HAVE TO BE PREPARED FOR EITHER SCENARIO SO IF WE DO GO INTO A RECESSION AND MORE ECONOMIC SLOWDOWN I THINK UPWARD BONDS WOULD BE WHERE -- THE PLACE TO BE. CAROLINE:
WE STILL HAVE AND, WE HAVE THE JUGGERNAUT THAT IS NVIDIA. WHAT ARE THE CATALYST FOR HERE ON OUT AT THE MOMENT. IS IT FUNDAMENTALS OR THE BREAKTHROUGH WHEN IT COMES TO TARIFFS AND TRADE. >> I THINK FOR THESE INDIVIDUAL STOCKS THE FUNDAMENTALS WILL BE ABSOLUTELY IMPORTANT. I THINK AS I MENTIONED THE AI CAPEX REMAINS INTACT. BUT I THINK THERE IS CONCERN ON MARGINS. ALSO THERE ARE CONCERNS FROM
THE CHINESE COMPETITORS, ETC.. I THINK WE HAVE TO WATCH THE FUNDAMENTALS BUT MACRO INVESTORS WILL STILL BE LOOKING A LOT AT WHAT THE FED PLANS TO DO FOR EXAMPLE AND WATCH OUT FOR THE MAJOR ECONOMIC DATA FROM THE U.S.. >> LET'S GO THERE TO THE FED. I ARE YOU EXPECTING HAWKISHNESS OR DOVISHNESS OUT OF THE FED TOMORROW? ARVIND: I THINK THEY ARE LIKELY -- JANET: I THINK THEY ARE LIKELY TO STAY ON HOLD. WE SHOULD NOT BE EXCITED ABOUT THE SHIFTING TO MORE DOVISHNESS.
I THINK GIVEN THE INFLATION. IN CONSUMER INFLATION IS REALLY HIGH AT THE MOMENT. I THINK THERE IS A HIGH BAR FOR THE FED TO SWITCH TO MORE DOVISHNESS SO I WOULD NOT BET ON THAT YET. CAROLINE: GREAT TO HAVE SOME TIME WITH YOU. THANK YOU VERY MUCH. ONE OF OPENAI'S MAJOR STAKEHOLDERS IS THE BIGGEST HOLDOUT AS THE CHATGPT COMPANY TRIES TO RESTRUCTURE. KEEP AN EYE ON TESLA SHARES.
WE HAVE SEEN FURTHER SALES PRESSURE OVER IN EUROPE. DISASTROUS NUMBERS OUT OF NOT JUST SWEDEN AND SOME OF THE NORDICS, BUT ALSO IN THE U.K. AS IT FINALLY TURNS NEGATIVE IN APRIL IN A BIG WAY. >> TIME FOR TALKING TACT. PALANTIR SHARES ARE REALLY DRIVEN LOWER TODAY AFTER ITS FINANCIAL RESULTS FAILED TO LIVE UP TO INVESTORS LOFTY EXPECTATIONS.
THEY BUMPED UP THE REVENUE FORECAST REPRESENTING GROWTH OF 36% FROM LAST YEAR. VALUATIONS OFF HIGH 12%. GOOGLE IS ARGUING THE DOJ'S REMEDIES GO BEYOND THE COURT'S NARROW RULING. OPENAI HAS AGREED TO BUY NAI ASSISTED CODING TOOL ACCORDING TO SOURCES. THIS MARKS THE CHATGPT MAKER'S LARGEST ACQUISITION TODAY. THE DEAL HAS NOT YET CLOSED
PARADE WE WILL HAVE MORE IN A MOMENT. WE ARE UNDER PRESSURE. 6/10 OF A PERCENT OFF BY THE NASDAQ 100. WHAT WILL HAPPEN WITH THE U.S. CANADA MEETING. WHAT WILL HAPPEN WITH THE FEDERAL RESERVE IN TERMS OF TRAVEL FOR RATES WHERE WE GET INFLATIONARY SETTLE -- SENTIMENT. WILL WE GET HAWKISH TONE.
BITCOIN CURRENTLY UP A QUARTER OF A PERCENT. COMING UP, AN IMPORTANT CONVERSATION WITH THE CEO OF ARES MANAGEMENT JOINING US FROM THE GLOBAL CONFERENCE. THIS IS BLOOMBERG TECHNOLOGY. ♪ >> WE ARE HERE AT THE MILKEN GLOBAL CONFERENCE JOINED BY MICHAEL ERA GETTY. THANK YOU FOR JOINING US HERE ON SET. A LOT OF CONVERSATION GOING ON. IT IS KIND OF TAKING UP ALL THE AIR IN THE ROOM THESE DAYS.
WHAT DO YOU MAKE OF THE STRATEGY YOU ARE SEEING FROM THE ADMINISTRATION AND HOW YOU AS AN INVESTOR REACT TO IT? >> WE TRY TO STAY ABOVE THE POLITICS AND THINK ABOUT WHERE THE MARKETS ARE GOING AND HOW IT AFFECTS CAPITAL FLOWS IN OUR BUSINESS. THE GOOD NEWS GENERALLY FROM AN ARES PERSPECTIVE IS THE BUSINESSES TEND TO BE MIDDLE-MARKET SERVICE COMPANIES THAT HAVE THEIR CUSTOMER BASE IN LOCAL CURRENCY AND LOCAL MARKETS. WE DON'T REALLY INVEST IN A LOT OF COMPANIES AND MAKE THINGS OR HAVE TO GRAPPLE WITH SUPPLY CHAIN ISSUES OR TARIFFS. IN TERMS OF THE FIRST ORDER IMPACTS WE ARE PRETTY UNAFFECTED. OBVIOUSLY THE LONGER THAT THESE TRADE IMBALANCES GO ON, THE TRADE WAR GOES ON IT AFFECTS EVERYBODY IN TERMS OF THE ECONOMIC IMPACT AND THAT'LL WE ARE KEEPING AN EYE OUT FOR. HOPEFULLY WE'LL GET SOME INFORMATION THE NEXT WEEK OR TWO TO GIVE PEOPLE SOME CLARITY. SONALI:
WHAT ABOUT THE DIFFERENCE THAT YOU SEE BETWEEN SMALLER AND MIDDLE SIZED COMPANIES. THERE'S A LOT OF CONCERNS THERE WILL BE A DISPROPORTIONATE IMPACT TO THE CHANGES FOR THOSE MIDDLE SIZED COMPANIES. MICHAEL: THE REALITY IS MOST OF THE MARKET COMPANIES ARE INSULATED FROM SOME OF THE LARGE CROSS-BORDER IMPACTS OF THE TARIFFS AND I COULD CRAFT AN ARGUMENT THAT THEY ARE ACTUALLY MORE PROTECTED IN SOME RESPECTS FROM SOME OF THE ISSUES THAT WE ARE GRAPPLING WITH. IF WE HEAD INTO A RECESSIONARY ENVIRONMENT, THEY WILL BEAR THE BRUNT OF IT. IT COULD BREAK EITHER WAY AND WE WILL HAVE TO REACT TO THE MARKET GIVES US.
>> WHAT TO MAKE OF THE RELATIONSHIP CHANGING BETWEEN THE WORLD ECONOMIC SUPERPOWERS. A LOT OF INVESTORS HAVE LOOKED MORE AND MORE TO CHINA AND ASIA MORE LARGELY. THE TARIFF ESCALATION HAS NOT BEEN HELPFUL TO THAT MOVEMENT. DO YOU THINK THERE SOME REVERSAL THERE. MICHAEL:
WE INVEST MONEY ON BEHALF OF INSTITUTIONS AND INDIVIDUAL INVESTORS ALL OVER THE GLOBE. WEAVER LARGE BUSINESS IN THE ASIA-PACIFIC REGION. PART OF OUR BUSINESS IS BENEFITING IN TERMS OF PEOPLE ALLOCATING TO OTHER REGIONS OF THE WORLD WHERE WE HAVE CAPABILITY CAPACITY. OUR INDUSTRIAL LOGISTICS BUSINESS IS BENEFITING FROM SOME OF THE CHANGES WE ARE SEEING AROUND THE GLOBAL SUPPLY CHAIN NEAR SHORING AND RE-SHORING AND TRYING TO PLUS ONE. THERE WILL ALWAYS BE PUTS AND
TAKES. VERY FEW INVESTORS HAVE BEEN INVESTING INTO THE CHINA MARKET OVER THE LAST MANY YEARS SO WE ARE NOT REALLY SEEING THAT SIGNIFICANT AMOUNT OF DISRUPTION. >> AT A TIME WHEN A LOT OF PEOPLE ARE LOOKING AROUND AND SEEING CAPITAL FROZEN YOU'VE ACTUALLY RAISED A SIGNIFICANT AMOUNT IN PLACES LIKE PRIVATE CREDIT. WHAT DO YOU THINK YOU ARE DOING DIFFERENTLY HERE AND WHAT DOES IT MEAN FOR YOUR ABILITY TO BRING IN MORE FROM INVESTORS FOR THE REST OF THE YEAR. >> LAST YEAR WE HAD A RECORD YEAR OF FUND RAISING.
CRAWLING BACK NEW A U.N.. THIS FIRST QUARTER WE HAD EARNINGS YESTERDAY TO THE DRY POWDER ABOUT $145 BILLION TO INVEST. I THINK WHAT WE ARE DOING DIFFERENTLY FROM A POSITIONING STANDPOINT IS WE HAVE A BROAD DIVERSIFIED GLOBAL BUSINESS. I THINK WE ARE GIVING INVESTORS A LOT OF CHOICE AS TO WHERE THEY WANT TO PLAY AND WHAT RISKS THEY WANT TO TAKE. AS ONE OF THE PIONEERS OR
LEADERS IN PRIVATE CREDIT WE ARE ONE OF THE FEW MANAGERS THAT HAS A TRACK RECORD THAT GOES BACK 20 OR 30 YEARS WERE PEOPLE CAN SEE HOW WE HAVE PERFORMED THROUGH CYCLES AND AS WE TALK WITH INVESTORS IF YOU LOOK AT OUR PRIVATE CREDIT STRATEGIES BROADLY ACROSS REAL ASSETS AND CORPORATE WE ARE GENERATING 12 TO 15% RATES OF RETURN RIGHT NOW. SO ON RELATIVE VALUE BASIS, THIS AMOUNT OF UNCERTAINTY ON THE FORWARD PATH OF EARNINGS, VALUATIONS OR THINK MOST INVESTORS ARE FINDING IT FRANKLY EASIER TO TAKE SHELTER IN THE CREDIT MARKETS AND MAKE THOSE LOW TO MID TEENS RETURNS WITHOUT HAVING TO WORRY ABOUT THAT EQUITY RISK PREMIUM. SONALI: IS THAT BECAUSE RATES HAVE REMAINED HIGHER ULTIMATELY? MICHAEL: IT'S CLEARLY A REFLECTION OF THE BASE RATES ENVIRONMENT. AS THEY ARE CONCERNS ABOUT ECONOMIC WEAKNESS OR SEEPING IN AND CREDIT SPREADS ARE STARTING TO WIDEN OUT. SO RATES ARE COMING DOWN I THINK PEOPLE FELT THE ASSET CLASS WOULD BE MUCH MORE RATE SENSITIVE THAN IT IS BECAUSE WE ARE MAKING UP FOR THAT REDUCTION IN CREDIT SPREADS WIDENING. SONALI: I CAN'T HELP BUT THINK THERE
MIGHT ACTUALLY BE AROUND THE CORNER IN THE WAKE OF SOME OF THIS TURMOIL A GOLDEN OPPORTUNITY THAT'S FORMING TO DEPLOY LARGER AND LARGER DOLLARS GIVEN HOW MUCH VALUATIONS OF CORRECTED. WHAT DOES THAT LOOK LIKE? MICHAEL: WE NOW HAVE SEEN THAT WE ACTUALLY HAVE GROWN FASTER THROUGH PERIODS OF DISLOCATION. SO THE FASTEST GROWTH WE HAD WAS THROUGH THE GFCI TERMS OF PROFITABILITY. THE SECOND WAS THROUGH THE COVID PANDEMIC AND THAT'S A COMBINATION OF JUST LEANING STRUCTURES THAT WE MANAGE, THE CAPABILITIES WE HAVE.
SO WHENEVER WE HAVE MARKETS IN DISLOCATION IT CREATES OPPORTUNITY. WHAT'S UNIQUE ABOUT THIS MOMENT IS THE AMOUNT OF INVESTMENTS THAT ALREADY MADE IN THE PRIVATE MARKETS AT HIGH VALUATIONS THAT WILL REFLECT IN THE LOWER RATE ENVIRONMENT AND THE MAGNITUDE WE HAVEN'T SEEN BEFORE. SO THE RESOLUTION IF YOU WILL OF ALL OF THOSE ASSETS THAT NEED TO RESET BASIS WE THINK WILL BE A MASSIVE OPPORTUNITY IN PLACES LIKE SECONDARIES, OPPORTUNISTIC CREDIT, OPPORTUNISTIC REAL ESTATE. WE ARE QUITE EXCITED ABOUT THE FUTURE. SONALI: SECONDARIES IS A GOOD PLACE TO DIVE IN BECAUSE YOU ARE SEEING LIMITED PARTNERS LOOKING TO SELL. ALSO, THE PRIVATE EQUITY INDUSTRY HAS BEEN HOLDING ON TO ASSETS FOR YEARS. THE IPO WINDOW HAS NOT OPENED
IN A MEANINGFUL WAY. M AND DAY ALSO PRETTY STALLED. WHAT DOES THAT MEAN FOR THE PRIVATE EQUITY INDUSTRY. CAN THEY KEEP BORROWING TO KEEP THE PARTY GOING? MICHAEL: I THINK THEY CAN. THE FINANCIAL INCENTIVES ARE ALIGNED TO LONG-TERM EQUITY VALUE CREATION AND THAT MAY REQUIRE HOLDING THESE ASSETS FOR LONGER. THERE WAS A REAL TENSION FROM
LIMITED PARTNERS WHO WANT TO SEE A RETURN OF CAPITAL BEFORE REINVESTING. BUT THE OPPORTUNITIES FOR LIQUIDITY HAVE GOTTEN MUCH MORE INNOVATIVE AND CREATIVE AND COMPLEX. SO IF YOU ARE A PRIVATE EQUITY GP, TODAY THE ENTIRE MARKET IS ABOUT THREE PLUS TRILLION DOLLARS OF PRIME EQUITY INVESTED. 60% OF THAT IS 4.5 YEARS OLD OR
MORE. THERE'S ABOUT $1 TRILLION OF EQUITY THAT HAS NOT BEEN INVESTED. SO THE CHALLENGE THE PRIVATE EQUITY INDUSTRY IS FACING IS DO I TAKE MY TRILLION DOLLARS AND INVEST IT INTO THIS NEW MARKET WHERE THERE'S PROBABLY GOOD OPPORTUNITY OR DO I USE IT TO SUPPORT VALUATION AND GROWTH IN THE EXISTING PORTFOLIO. YOU CANNOT DO BOTH AND THAT'S WHERE SECONDARIES COME IN.
WE ARE SEEING SIGNIFICANT DEMAND FROM THE GP COMMUNITY AS WELL AS THE LP COMMUNITY TO KINDA FIGURE OUT HOW TO RECAPTURE SOME OF THAT 3 TRILLION AND GIVE IT BACK TO INVESTORS. SONALI: DESCRIBE THAT TENSION WITH ASSET FIRMS. WHAT IS IT? MICHAEL: I THINK MOST FOR SKID LPS WHICH IS LARGELY ALL OF THEM UNDERSTAND THE WORLD WE LIVE IN AND I DON'T THINK THEY WANT TO SEE ASSETS GETTING MONETIZED AT VALUATIONS THE DON'T REFLECT INTRINSIC VALUE. THEY WANT TO PARTICIPATE IN THIS NEW VINTAGE. SO IF THERE IS A TENSION IT IS
HOW DO I CAPTURE THIS WONDERFUL OPPORTUNITY SET YOU JUST REFERRED TO WITHOUT COMPROMISING VALUE PORTFOLIO AND NOT JUST THE DIALOGUE. GPS AND LPS WILL ALL BE IN A DIFFERENT PLACE DEPENDING ON THEIR LIQUIDITY OR THE AGE OF THEIR PORTFOLIO. SONALI: IT'S CERTAINLY THE TOPIC OF THE DAY AND AREAS IS RIGHT IN THE MIDDLE OF IT. THANK YOU FOR JOINING US ON SET.
THAT IS THE CEO OF ARES. BACK TO YOU. CAROLINE: THANK YOU SO MUCH. LET'S CHECK IN ON THE BROADER MARKETS RIGHT NOW BECAUSE WE HAVE BEEN UNDER PRESSURE COMING OFF OF OUR LOWS IN ANTICIPATION OF THE FED TOMORROW AND WITH THE TREASURY SECRETARY HAS BEEN SAYING ON THE HILL. DISCUSSION ABOUT DOGE, THE U.S. NOT BEING IN A RECESSIONARY PATH RIGHT NOW. LOOK AT WHAT INDIVIDUAL STOCKS
ARE ON THE MOVE. WE ARE CURRENTLY TRADING FLAT ON THE STOCK BUT THEY WERE A TEA BACKER OF OPENAI. WE KNOW OPENAI SAID WALKED BACK PART OF ITS MORE CONVENTIONAL FOR-PROFIT COMPANY BUT ITS RESTRUCTURING PLANS HAVE NOT RECEIVED THE BLESSING OF A MAJOR STAKEHOLDER WHO IS MICROSOFT. NOW, PALANTIR IS ALSO SLIDING. SALES FORECAST FALL SHORT OF WHAT IS A VERY LOVELY VALUATION ON THE STOCK. THIS IS BLOOMBERG TECHNOLOGY. ♪ TECHNOLOGY PODCAST ON THE TERMINAL, APPLE, SPOTIFY AND I HEART. THIS IS BLOOMBERG.
LET'S TALK ABOUT DOORDASH. IT'S ON A BIT OF A BUYING SPREE FOLLOWING HIS EARNINGS BEAT ANNOUNCING TWO MULTIBILLION-DOLLAR ACQUISITIONS. AND HOSPITALITY TECH COMPANY SEVEN RUNS FOR 1.2 BILLION. THE ACQUISITION WOULD EXPAND DOORDASH'S REACH. LET'S GET THE INSIDE TRACK. WE START ON THE M AND DAY BEFORE THE FUNDAMENTALS. WHY ARE THEY SUDDENLY EXPANDING
OUTSIDE THE U.S.? >> IT REALLY COMES AT A TIME WHEN DOORDASH HAD A STRONG FINANCIAL POSITION AND IT THINKS IT CAN GO INTO THE U.K. AND SORT OF MORE URBAN EUROPEAN MARKETS AND REPLICATE THE EVENT THAT TOOK THEM TO A DOMINANT POSITION IN THE U.S. WHERE THEY COVER TWO THIRDS OF THE MARKET. CAROLINE: THEY EXPAND GLOBALLY. THEY ARE ADDING ON THE ABILITY TO BOOK YOUR RESTAURANT WITH SEVERAL THAT HAVE ACTUALLY BEEN WORKING ALONGSIDE IN PARTNERSHIP NOW THEY MADE THE ACQUISITION. CAN YOU JUST TALK ABOUT WHAT
THE FUNDAMENTALS ARE TELLING US RIGHT NOW. >> THE REPORTED EARNINGS TODAY, THE OUTLOOK WAS A BEAT. THE ADJUSTED EBIT OUTLOOK WAS A BIT CONSERVATIVE. ANALYST ESTIMATES DUE TO THE ONGOING INVESTMENT INTO THESE NEW INTERNATIONAL MARKETS AND BUSINESSES. SO ANALYSTS WOULD BE LOOKING AT HOW THEY ARE GOING TO INVEST AND READ ACROSS THESE MARKETS AS THEY GROW IN THE COMING YEARS. >> DIG IN A LITTLE BIT. WHY WANT TO BE BOOKING MY
RESTAURANT VIA THE APP AS WELL IS GETTING THE FOOD SENT TO ME. HOW WAS THAT THE RIGHT SORT OF ALLOCATION OF 1.2 BILLION? NATALIE: FOR DOORDASH THEY ARE EXPANDING THEIR ENTERPRISE OFFERINGS FOR RESTAURANTS. THIS IS NOT ONLY A RESERVATION PLATFORM LIKE OPENTABLE, BUT IT IS ALSO FOR RESTAURANTS TO BUILD UP LOYALTY OR REACH CUSTOMERS MORE EASILY.
WHETHER THEY ARE IN RESTAURANTS OR THEY ARE ORDERING ON THE PLATFORM. SO THERE ARE TWO SIDES TO THIS YEAR. BOTH CONSUMER FACING IN THE B2B SIDE. CAROLINE: LET'S TURN TO ANOTHER SET OF EARNINGS THAT SEEMED TO UNDERWHELM INVESTORS. SHARES OF PALANTIR PLUNGING
AFTER THE COMPANY PRESENTED IN EARNINGS OUTLOOK THAT FELL SHORT OF LOFTY EXPECTATIONS. PALANTIR IS ONE OF THE MOST POPULAR TRADE AMONG RETAIL INVESTORS. LET'S JUST THINK ABOUT HOW MORE INVESTORS ARE REACTING TO THE NEWS. WE -- RETAIL INVESTOR OF AK MEDIA. A QUARTER OF A MILLION FOLLOWERS , YOU ARE VERY
POPULAR FOR YOUR THOUGHTS ON THE STOCK AMONG WHAT THEY'VE CALLED A RETAIL ARMY AND WHAT DO YOU MAKE OF THE NUMBERS TODAY? >> I'VE BEEN COVERING THE COMPANY FOR A BETTER PART OF FIVE YEARS AND JOINED -- THERE IS SOMETHING RETAIL SAW IN THIS STOCK ON THE SINGLE DIGITS THAT WALL STREET DID NOT SEE. WE'VE SEEN WHAT'S HAPPENED SINCE THEN AND HOW WALL STREET IS BUYING AT A HIGHER PREMIUM. MAYBE THAT'S BECAUSE IT DESERVES A HIGHER PREMIUM? A COMPANY THAT JUST A 39% YEAR ON YEAR GROWTH. THE REMAINING DEAL VALUE IS UP 127%. THE U.S. GOVERNMENT BUSINESS IS ACCELERATING. IT'S A COMPANY DOING $900
MILLION IN REVENUE. WITH LESS THAN 800 CUSTOMERS. I KNOW >> THE VALUATION IS AGGRESSIVE. >>JUST DOUBLE-CLICK ON THE MARKET CAPITALIZATION.
$255 BILLION, THE STOCK RUN EXCESSIVELY THIS YEAR FOR 60% HIGHER. I'M INTERESTED IN YOUR TAKE WITH SOME OF THE ANALYSTS OUT THERE. JEFFREY'S SAYING THIS IS A RETAIL TRADE.
I AM NOT HEARING PEOPLE TALKING ABOUT PALANTIR IN THE INSTITUTIONAL MARKET IN ANY WAY THE SAME AMOUNT WE ARE HEARING IN THE RETAIL COMMUNITY. IS THAT RETAIL RESILIENCE THERE? AMIT: IF YOU LOOK AT THE SPLIT IT IS 50-50. SO THIS IS NOT TESLA IN 20197030. THERE'S OBVIOUSLY INSTITUTIONAL INVESTORS THAT ARE EXCITED ABOUT THE NAME. LET'S TAKE A SECOND AND STEP
BACK. OPENAI IS WORTH 300 BILLION ON THE PRIVATE MARKETS. AIG SAID THIS A MONTH AGO AFTER INVESTOR DAY IN THEIR EARNINGS. AIG EXPECTS THE ADOPTION OF AN
AI POWERED UNDERWRITING SOLUTION LEVERAGING AIP TO DOUBLE ITS FIVE-YEAR REVENUE FROM 10% TO 20%. THE CEO OF THE COMPANY HAS BEEN SAYING LARGE LANGUAGE MODELS LARGELY ARE BECOMING COMMODITIZED. I AM NOT SEEING THE STOCK IS CHEAP I AM SAYING THE MULTIPLE IS AGGRESSIVE BUT IT MIGHT BE WARRANTED BECAUSE THE IMPLEMENTATION OF AI IS WHAT MATTERS. >> I SUPPOSE SOME AREA OF CONCERN IS EUROPE.
AND INDEED INTERNATIONAL EXPANSION. THAT WILL BE THE CATALYST THAT MAY BE STARTS TO HAVE PEOPLE GOING IT SHOULD BE WORTH 56 TIMES ITS 2026 REVENUES. WHEN WILL WE GET THAT INTERNATIONAL EDGE. AMIT:
ALEX SAID THIS ON THE EARNINGS CALL. EUROPE IS IN A CRISIS. THEY ARE NOT GOING TO SURVIVE, AT LEAST THE BIGGEST COMPANIES WON'T SURVIVE UNLESS THEY SURVIVED THE AI REVOLUTION. THAT IS BECAUSE THE UNITED STATES IS EMBRACING THE AI REVOLUTION. ALSO SAYING YESTERDAY
GOVERNMENTS ACROSS THE WORLD ARE CERTAIN TO INCREASE THEIR INQUISITION OF PALANTIR AS WELL. PALANTIR RECENTLY SIGNED A MASSIVE NATO CONTRACT FOR THEIR MAVEN PLATFORM. I THINK WE WILL START TO SEE A GROWTH SPURT AND S-CURVE IN EUROPE. THERE ARE STILL CULTURAL DIFFERENCES THAT I THINK THAT
WILL COME THROUGH AND WHEN IT DOES I THINK THAT WILL BE A CATALYST >> FOR PALANTIR. >>WE'VE ALREADY SEEN RESILIENCE SHOWN WITH U.S. GOVERNMENT CONTRACTS. BUT IS THERE ANYTHING THAT GIVES YOU ANY SKEPTICISM ABOUT A PULLBACK IN SPENDING FROM THAT SIDE? AMIT: NOT REALLY. IT WAS FUNNY IN FEBRUARY WHEN
THERE WAS A PENTAGON HEADLINE THAT SAID THEY WOULD BE CUTTING DEFENSE SPENDING AND PALANTIR WAS DOWN 10%. IF THE GOVERNMENT IS GOING TO BECOME MORE EFFICIENCY WITH THEIR SPEND YOU NEED TO EFFICIENTLY ALLOCATE. THIS IS ONE OF THE MOST LOGIC THINGS THEY'VE BEEN TALKING ABOUT FOR A WHILE. IF WE NEED A BETTER ALLOCATION OF CAPITAL TO GET MORE TRANSFORMATIVE RESULTS I WOULD IMAGINE TO BE A MASSIVE TAILWIND VERSUS A HEADWIND AND THAT'S WHY IT'S BEATING ITS PREMIUM.
IN TERMS OF THE STOCK BEING DOWN THIS WAS 70% FROM THE LOWS OF APRIL. IT'S A STOCK WELL ABOVE 10 EXTRA BLOWS OF 2022 WHEN WE TOOK A CHANCE WHEN WALL STREET DECIDED HE WAS CRAZY. SO FROM THAT PERSPECTIVE STOCKS GO UP AND DOWN. I THINK THIS IS A REACTION TO THE NEWS BUT THE QUARTER ITSELF WAS TREMENDOUS. CAROLINE:
THEY BEAT AND RAISED. THE STOCK IS STILL UP MORE THAN 42% OVER THE COURSE OF THE YEAR THE BEST PERFORMING STOCK THROUGHOUT WHAT HAS BEEN A PRETTY VOLATILE STATE OF TRADE. IT IS FROM YOUR PERSPECTIVE GOING MORE BROADLY THIS THE NAME THE RETAIL COMMUNITY STILL WANTS TO BE NUMBER ONE, WHERE ELSE HAS RETAIL STARTED TO GET THEIR BETS WHEN IT COMES TO ATTACKING THEIR SYSTEM. AMIT: I THINK IT IS PALANTIR. WHEN ALEX SPEAKS, PEOPLE LISTEN. I WAS A NATIONAL LEAGUE COMPETITIVE DEBATER ONE OF THE TOP THREE IN EUROPE. WHEN I DISCOVERED PALANTIR IN 2021 AND I SAW ON THEIR WEBSITE THEY REFER TO THEIR DATA INFRASTRUCTURE AS ONTOLOGY.
THAT IS A PHILOSOPHICAL WORK. DR. KARP WROTE THE BOOK WHICH IS A NUMBER ONE TIMES NEW YORK BESTSELLER. WHEN YOU TALK ABOUT RETAIL AND WHAT CAPTURES THEIR INTEREST.
WHAT CAPTURED MY INTEREST WAS THIS GUY WHO DID NOT CARE WHAT ANYBODY SAID. HE WAS GOING TO BE HIMSELF AND SAY HIS POLITICAL BELIEFS REGARDLESS OF WHAT HAPPENED TO THE COMPANY. I THINK BECAUSE PALANTIR HAS A BACKBONE, ALEX KARP IS RUTHLESS ABOUT EXPLAINING WHAT THAT VISION IS, GROWTH IS THERE TO JUSTIFY WHY RETAIL WANTS TO BET ON A TECH STOCK THAT IS ACCELERATING IN THE AGE OF AI.
CAROLINE: WHAT'S THE SENTIMENT LIKE MORE BROADLY? AMIT: IF YOU LOOK AT THE J.P. MORGAN DATA IN APRIL AND MAY, MARCH HAD $40 BILLION OF NET INFLOWS FROM RETAIL. APRIL HAD ABUT $42 BILLION OF NET INFLOWS FROM RETAIL. HEDGE FUNDS TOOK DOWN THEIR POSITIONING TO THE MAG SEVEN THE LOWEST SINCE 2023 AND HEDGE FUNDS SHOWED THAT THERE SHORT POSITIONING ON THE BROADER S&P IS AT 2022 LEVELS. THIS IS A GAME OF IT RETAIL IS RIGHT ON BY THE DIP WHICH WILL ALLOW VALUATIONS TO BECOME MORE MATURE OR IF THE HEDGE FUNDS WILL BE RIGHT. WE RECOVERED EVERY THING FROM THE APRIL LOWS.
I CAN IMAGINE HEDGE FUNDS AND THAT CRATES MORE FORMAL AND MOMENTUM. BUT RETAIL HAS BEEN BUYING THE DIP AND I THINK THEY WILL CONTINUE ON PALANTIR. >> WE THANK YOU FOR YOUR TIME. CEO OF A CAME MEDIA. SHARES OF TAS LOWER AS SHARE SLIDE ACROSS EUROPE FOR THE MONTH OF APRIL. THIS DESPITE THE COMPANY
ROLLING OUT AN UPDATED VERSION OF THEIR SUV. LET'S GO TO CRAIG FOR MORE. MANY BLAME THE LACK OF A FRESH ITEM TO BE ABLE TO BUY INTO, THE FACT THAT THEY HAD PUT ON ICE THAT PRODUCTION. BUT NOW WE GET THE TELL THAT PEOPLE ARE STILL NOT BUYING. CRAIG: THAT'S RIGHT. THAT WAS KIND OF THE BIG EXCUSE YOU COULD THROW OUT IN THE FIRST QUARTER WAS WE HAD THIS CHANGEOVER FROM THE MODEL Y THAT WAS GOING TO INEVITABLY LEAD TO SOME LOST PRODUCTION AND THAT SORT OF CHANGEOVER IS FAIRLY COMMON IN THE INDUSTRY.
IT'S MAYBE WHAT WAS UNIQUE FOR TESLAS THAT THE MODEL Y IS SO IMPORTANT TO THE COMPANY AND ACCOUNTS FOR SUCH A HUGE PORTION OF THEIR VOLUME AND FOR THEM TO HAVE TO TAKE THEIR PRODUCTION LINES DOWN AT EACH OF THE FACTORIES WHERE THEY MAKE THE MODEL Y WHICH IS IN ALL OF THEIR ASSEMBLY PLANTS AROUND THE GLOBE, THAT IS A BIG DEAL FOR THEM. BUT BY THE TIME MARCH ROLLS AROUND YOU HAVE THE MODEL Y STARTING TO SCHOOL BACK UP AND DELIVERIES OF THAT REFRESH MODEL Y'S STARTING IN EARLY MARCH, GETTING INTO APRIL FOR SALES TO BE THIS DRAMATICALLY DOWN IS A TROUBLING SIGN IF YOU ARE A TESLA INVESTOR. CAROLINE: SWEDEN OFF BY 81%. U.K. OFF BY 62%. WHAT ARE REAL NUMBERS TALKING HERE. HOW FEW CARS ARE BEING PURCHASED. CRAIG: IN THE U.K. IT WAS JUST OVER 500 UNITS THEY
MOVED SO THIS IS A REALLY DRAMATIC DROP FOR THE COMPANY. I THINK THIS IS A CASE HERE IN EUROPE WHERE YOU STILL SEE VERY PATCHY TAKE-UP OF ELECTRIC VEHICLES WHERE SOME SMALLER MARKETS YOU HAVE A HUGE TAKE UP. I WOULD POINT TO NORWAY BEING THE SORT OF BRIGHT EXAMPLE, TO THE POSITIVE.
BUT IN OTHER MARKETS, EV'S ARE TAKING QUITE A WHILE TO ACCELERATE AND GERMANY AND THE U.K. HAVE HAD SORT OF TRADED PLACES IN TERMS OF BEING FAR AND AWAY THE BIGGEST WITHIN EUROPE AND FOR THOSE COUNTRIES TO BE INCLUDED AMONG SORT OF THESE COUNTRIES WHERE WE ARE SEEING REALLY DRAMATIC DECLINES IS TROUBLING BECAUSE THAT IS WHERE ALL THE VOLUME IS IN THE REGION. CAROLINE: THE OTHER PART IS HIS POLITICAL REPUTATION, THAT IS CRIMPING DEMAND? CRAIG: THAT IS WHAT IS TOP OF MIND FOR PEOPLE FOLLOWING THESE DEVELOPMENTS IS HOW MUCH IS HE HURTING THE BRAND'S STANDING. THE EUROPEAN MARKET IS A LOT MORE COMPETITIVE THAN THE U.S. IS, WHERE A LOT OF EUROPEAN COMPANIES WERE BRACING FOR THIS YEAR BEING A MUCH TOUGHER COMPLIANCE YEAR. CO2 REGULATIONS WERE SCHEDULED
TO TAKE ANOTHER SORT OF STEP UP WHERE YOU HAD TO MEET A LOWER CO2 STANDARD FOR YOUR FLEET. IT LOOKS LIKE THE MANUFACTURERS ARE GOING TO GET SOME RELIEF ON THAT FRONT BUT IT SORT OF ALREADY IS THE CASE THAT WE ARE SEEING THE FRUITS OF THOSE EFFORTS OF TRYING TO MEET THOSE NUMBERS. A LOT OF PRODUCT HAS COME TO MARKET. YOU HAVE CHINESE COMPANIES COMING TO MARKET IN SPITE OF TARIFFS. TESLA HAS MORE COMPETITION. CAROLINE: THANK YOU SO MUCH ON ALL THINGS TAS LOVE. WE SEE PRESIDENT TRUMP WELCOMING TO THE WHITE HOUSE
THE NEW LEADER OF CANADA MARK CARNEY WHO IS BUT A WEEK AFTER WINNING THE ELECTION PROMISING HE IS THE MAN TO GUIDE CANADA THROUGH THE ECONOMIC TURMOIL, CHECK THEM AGAINST AGGRESSION FROM THE WHITE HOUSE, EXPORTS IN CANADA PLUMMETING AS IT WOULD SEEM FROM THE TARIFFS THUS FAR. SO CURRENTLY SEEING THAT CONTINUATION OF DIALOGUE BETWEEN MARK CARNEY AND PRESIDENT TRUMP. LET'S RETURN TO THE MARKETS. BECAUSE OF TARIFFS AND WHAT THIS MEETING WANTS TO BE DELVING INTO BETWEEN THE LEADERS. WE HAVE SOME EARNINGS AFTER THE BREAK AS WELL. AND UP BY 1.5%. WHAT WILL THEY SAY ABOUT AI DEMAND, WILL THEY SHAKE OFF THE ANXIETY. ARM, A DESIGNER UP BY 4/10 OF A
PERCENT. FROM NEW YORK, THIS IS BLOOMBERG TECHNOLOGY.
2025-05-08 12:57
