July 11, 2025 • 38 mins
Watch Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Hosts: Paul Sweeney and John Tucker
On this podcast:
- George Ferguson, Bloomberg Intelligence Senior Aerospace, Defense, & Airlines Analyst, discusses Delta Airlines earnings.
- Jennifer Rie, Bloomberg Intelligence Senior Litigation Analyst, discusses BI’s “Deep Dive: Trump Antitrust Machine a Work in Progress.”
- Anurag Rana, Bloomberg Intelligence Technology Analyst, discusses Coreweave buying Core Scientific in all-stock transaction.
- Craig Trudell, Bloomberg Global Autos Editor, discusses Tesla investor concerns about CEO Elon Musk’s new political party.
- Sam Fazeli, Bloomberg Intelligence, Director of Research for Global Industries and Senior Pharmaceuticals, discusses what President Donald Trump’s tax bill means for pharma companies.
- Tim Craighead, Bloomberg Intelligence Research Director for Content, discusses 10 companies to watch in the 3rd quarter of 2025.
- Mark Douglas, MNTN President and CEO, discusses the company’s recent IPO.
Bloomberg Intelligence, the research arm of Bloomberg L.P., has more than 400 professionals who provide in-depth analysis on more than 2,000 companies and 135 industries while considering strategic, equity and credit perspectives. BI also provides interactive data from over 500 independent contributors. It is available exclusively for Bloomberg Terminal subscribers.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Intelligence
with Paul Sweeney.
Speaker 2 (00:13):
The real app performance has been the US corporate high yields.
These are two big time blue chip companies. One person's
cast is another person's animal spirits, breaking market.
Speaker 1 (00:23):
Headlines and corporate news from across the globe.
Speaker 2 (00:26):
Our view is, if the economy is slowing.
Speaker 3 (00:28):
Down, there is the possibility of the debt spirals.
Speaker 4 (00:30):
Both tutum competing and AI are going to power the future.
Speaker 2 (00:33):
People are just buying everything with tex.
Speaker 1 (00:35):
Bloomberg Intelligence with Paul Sweeney on Bloomberg Radio, YouTube and
Bloomberg Originals.
Speaker 5 (00:42):
I'm Paul Sweeney and I'm John Tucker, filming in on
Bloomberg Intelligence.
Speaker 2 (00:46):
On today's show, we dig inside the big business stories
impacting Wall Street and the global markets.
Speaker 5 (00:50):
Hn Every week we provide the in depth research and
data on some of the two thousand companies at one
hundred and thirty industries our analysts cover worldwide.
Speaker 2 (00:59):
Today we'll look at like Tech Split, investors may be
concerned about Cego Elon Musk's new political party.
Speaker 5 (01:04):
Plus we're gonna look at Bloomberg Intelligence. There's ten companies
to watch in the third quarter of twenty twenty five.
Speaker 2 (01:10):
But first we begin with the airline industry.
Speaker 5 (01:12):
And this week Delta Airlines reported quarterly earnings and also
reinstated a profit outlook for the year. The company also
said travelers are coming back for more.
Speaker 2 (01:21):
John Tucker and I were joined by George ferguson Bloomberg
Intelligence senior Aerospace, Defense and airlines analysts.
Speaker 5 (01:26):
And first we asked George for his take on Delta's
recent earnings.
Speaker 3 (01:31):
They reinstated guidance, but at a lower EPs than they
had initiated at the end of the year. I think
the market still looks a little bit soft to us.
For sure, fuel prices are giving airlines a bit of
a bolster on the bottom line. But I think what
we heard was on the demand side was more of
(01:53):
the continuing story, and that is that premium is holding
up really well, and Delta is going to do very
well because of their loyalty programs and such. Basic economy
isn't And if you look at Delta's you know, price
paid per mile flown for customer, it was down in
every single market that they served, or maybe flatish in
(02:14):
Latin America, but all the rest of the markets down
during the quarter. So to us, it looks like a
market that still needs to have capacity come out, and
some of it will.
Speaker 5 (02:24):
See The CEO pointed to progress in trade talks between
the US and other countries and the potential for some
geopolitical conflicts to abate. I mean the flying public, really,
I don't know, are they really thinking about this when
they book a flight on Delta or any other airline?
Speaker 3 (02:42):
Yeah, I mean, so when I think of that, I
think that's going to largely benefit his international business. I
don't know, you know, I was polis to pick him
because I get to Paris for Paris Air Show, you know,
every other summer, and when I was in Paris, it
was teaming with Americans. So it didn't seem like, even
with protests going on around, it didn't seem like demand
(03:05):
was off for international travel, at least you know, anecdotally
and some of the places I've been to. So I
don't know. I mean, I think it takes a little
bit of demand off, maybe a very little bit, but
right now I think the international traveler seems to be
rolling right over top of that and going anyways.
Speaker 2 (03:22):
George, how does an airline take capacity out of the
system is that just going from like ten flights between
Newark and Miami a day to I don't know seven
or eight.
Speaker 3 (03:33):
I mean, I think ultimately you gotta park airplanes. I mean,
you know, it's a capital intensive business. You don't want
to buy those airplanes and not utilize them. You take
your old stuff, you park it, you maybe retire it,
sell it off. But what I mean, what we're seeing
as three Q develops, and so we'll watch as closely
to see what it does to demand, is we're seeing
(03:55):
that the low cost carriers Spirit Frontier like they're taking
large portions out of their plan for three Q. Now
it may not hold. They may add some of those
those routes back, some of those seats back, but we're
seeing numbers down twenty percent in some of their capacity.
(04:16):
On the full service side, United in Delta is still adding.
United adding the most I think I want to say,
five is six is percent, Delta adding two three ish percent.
An economy that's not growing that fast. American look kind
of flat, meaning the economy is growing at rates, you know,
sub two percent. So it feels like the big full
(04:36):
service are going to push through here and try to
push through and continue to subsidize the back of the cabin,
that basic economy with the front of the cabin strength.
I feel like at some point they'll break that front
of the cabin. I think that's sort of how the
industry always works.
Speaker 5 (04:50):
We'll see in none of these reports, do I see
anything mentioned about JEFT fuel prices? Should we'd be concerned
about that?
Speaker 3 (05:00):
Well, I mean, right now it's a tailwind, and if
that reverses could be a problem. Right, But I mean
jet fuel prices are down because of slower global growth, right,
I mean, I think the geopolitical backdrop doesn't help it,
but it doesn't seem to have pushed prices up firm
or I think I saw Saudi's are talking potentially about
reducing some of the capacity ads they're coming on. I
(05:22):
don't know if that sounds strong enough yet, but if
jet fuel turns, that would be that would work against them,
because again, we've got an airline business. If you look
at Delta, they added three ish percent capacity or around
there for this quarter and revenues were flat. Right, So
they're adding capacity and revenues are flat. I generally don't
(05:42):
like that kind of backdrop.
Speaker 5 (05:45):
Uh business travel.
Speaker 2 (05:46):
Delta actually kind of called that out as perhaps corporate
travel is quote unquote strengthening. Are you seeing that across
the industry? And where I guess where's corporate travel versus
pre pandemic.
Speaker 3 (05:58):
Yeah, so they're not telling us anymore, all right, And
usually you tell us when you're really excited about where
it is. Look, I think the summer flying seasons are
all about leisure. What I heard was that they that
they were having weakening, weaker pricing power in sort of
the off peak demand times. And my read through on
(06:20):
that is that summer leisure traveler where they know they
got you right. All my friends call me, they go, hey, George,
I hear airfares are down, but I'm trying to travel
over July fourth week on vacation with the family, and
I'm paying a crazy price. And I'm like, yeah, because
you're going when everyone else in the world wants to
go somewhere.
Speaker 2 (06:37):
Right.
Speaker 3 (06:38):
So when I read off peak, I also think that's
probably a little bit of business travel, and so I
don't know that it's going swimmingly and they're not. They're
not giving us numbers. What I heard was kind of stabilized,
but I didn't hear to me, I didn't hear something
that sounded like it was getting much better, and again,
Summer's about leisure.
Speaker 2 (06:57):
Our thanks to George Ferguson Bloomberg Intelligence in your Aerospace,
defense and airlines analysts.
Speaker 5 (07:02):
And we moved next to the anti trust space.
Speaker 2 (07:05):
As the anti trust enforcement policies and President Donald Trump's
administration takes shape, deal makers and large businesses hoping for
relief could see a glimmer of hope in some areas,
but not all.
Speaker 5 (07:15):
That's according to Bloomberg Intelligence, which recently took a deep
dive into what the anti trust space could look like
during the second half of the year.
Speaker 2 (07:24):
For more guest host Normal Linden, I were joined by
Jennifer Reed, Bloomberg Intelligence senior litigation analysts. Your first es, Jen,
what the anti trust environment is looking like under the
Trump administration.
Speaker 6 (07:35):
You know, there was a lot of uncertainty going into
the election during the fourth quarter of last year, but
I think there are some really good signs for those
companies that want to engage in big deals going forward.
And the main reason is because Trump's anti trust enforcers
are willing to accept settlements with a remedy to allow
a bigger deal to close essentially meaning that if there's
an overlapping product and there'd be too much concentration in
(07:56):
the market for that product, that product line could be
sold in the larger deal can get closed. And the
Buying administration essentially refused to do that. They thought, if
a deal was problematic, we're just going to sue it
and try to block it. And it led to a
lot of lawsuits, a lot of abandonments, and a lot
of deals that just didn't get signed to begin with.
So because we're seeing this sign that deals can get settled,
(08:16):
I do think we're going to start to see more
bigger deals getting signed up in the second half and
probably next year two.
Speaker 2 (08:23):
So, you know, for all these agencies within Washington, they
obviously feel the presence of President Trump very keenly. The
folks that are in charge of the Federal Trade Commission,
the Department of Justice, how much independence do you think
they have at this.
Speaker 6 (08:40):
Point, you know, Paul, probably not very much. You know,
in the past, in particular, the Federal Trade Commission was
supposed to be quite independent, and really it was because
it had five commissioners, only three of which could be
from one political party, and they needed a majority vote
to take any action with a deal. But President Trump
has hired the two Democrats, so we now have three Republicans,
(09:03):
and we have three Republicans that very much are behind
him and his political visions. So I think that they
will essentially do what they think he wants done. And
we have seen an example of that because they did
clear a deal between two huge ad agencies, OmniComm and
Interpublic with what we call a behavioral agreement, which they
(09:23):
have said that they don't tend to want to take,
agreeing that they wouldn't prevent advertisers from advertising a next
to content that was right leaning or expressed conservative viewpoints
that they might not agree with. So that was very
much kind of in ligned with this administration and what
this administration wants. So I do think we're going to
see alignment in terms of what these remedies are and
(09:46):
the deals that get cleared with what Trump is saying
and with what Trump wants.
Speaker 7 (09:52):
So Trump terminated two Democratic FTC commissioners back in the
first quarter of this year, and of course we know
this did raise some significant concept tutional concerns in terms
of the commission's historical independence and of course enforcement efforts.
What is this really signaled in terms of potential policy changes.
Speaker 6 (10:13):
Well, you know, the thing is that, first of all,
we do all of these challenges are going up to
the Supreme Court, and we do think that this is
going to stick. We do think that because of some
of the other decisions about other agencies, that even though
the two Democrats do have an ongoing lawsuit about their termination,
we think that probably the Supreme Court is going to
side with Trump and they are going to remain terminated.
(10:34):
For practical purposes. As I said, I don't think that
there's very much impact here because you do need a
majority vote to settle or to suit a block a deal,
so you need three out of the five. In the past,
we have seen that the FTCs operated on a very
sort of bipartisan or nonpartisan basis. We usually have a
unanimous or maybe a four to one decision, but it
(10:55):
hasn't been that way. You know, starting with Biden, we
were seeing a lot of three to two decisions were
along party lines, right, So I think that we probably
would have continued to see that even if the two
Democrats were still there, you'd have the three Republicans. You'd
probably get your three to two vote to do whatever
it was that the Republican tinggent wanted. So from a
practical standpoint, it's not going to have that much impact
(11:17):
on the decision making for deals of this FTC.
Speaker 2 (11:20):
Are there any deals that are currently being held up
or being scrutinized that maybe the participants are saying, oh,
boyd now we're going to really sail through and we
thought maybe on our Biden it could be a tough
slide or anything we should keep an eye on, you know.
Speaker 6 (11:33):
Paul, The one I'm really interested in is the Google
Whiz deal. And I say that because we know this
administration is no friend to big tech, and we know
that they're staying really aggressive on the monopolistic conduct side,
where Google and Apple and Amazon and Facebook have all
been sued for monopolistic conduct. And to me, that deals
very interesting because just from an anti trust perspective, I
(11:54):
don't really think it poses anti trust concerns. You know
that the concern would be that you have a cloud
company that's marrying with a cloud security company and they
could foreclose rivals. But I think that there's ample competition
on both sides, both on the cloud side and the
cloud security side. That you probably don't have a very
strong theory of harm. But we know that this administration
doesn't necessarily love Google. I'm going to be interested to
(12:16):
see what happens there, but I suspect we're not going
to learn in the second half. It's probably going to
push into the beginning of next year.
Speaker 5 (12:23):
All right, Thanks to Jen Reed, Bloomberg Intelligence senior litigation analysts,
and just ahead, we're going to look at what President
Donald Trump's new tax bill means for the pharmaceutical industry.
Speaker 2 (12:33):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing indepth
research and data on two thousand companies and one hundred
and thirty industries. You can access Bloomberg Intelligence via b
I go on the terminal.
Speaker 5 (12:43):
I'm Paul Sweeney and I'm John Tucker. This is Bloomberg.
Speaker 1 (12:52):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple, Cocklay, and Android
Otto the Bloomberg Business App. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 5 (13:06):
I'm Paul Sweeney and I'm John Tucker filling in on
Bloomberg Intelligence.
Speaker 2 (13:11):
We moved to some news in the tech space.
Speaker 5 (13:13):
And this week we heard that the AI cloud computing
startup core Weave is acquiring the data center operator Core Scientific.
It's an all stock transaction. It's valued at nine billion dollars.
Speaker 2 (13:26):
For more. Guest hosts Lisa Matteo and I were joined
by On a Rock Ranna Bloomberg Intelligence senior technology analysts.
We're first to ask on a Rock how this deal benefits.
Speaker 8 (13:34):
Core weave me and think about it, that they have
capacity to process a summer of transactions, all the backlock
that they have with this particular deal, they are expanding
their infrastructure. I mean, it's a very simple deal as
if you know, they're just buying more factories to produce
what they do. So this is you know, it's it's
as simple as that, all right.
Speaker 2 (13:52):
So this I'm not a tech person, so but I
know this tell us what core Weave is. What did
they do and why are they showing out nine billion
dollars to get bigger?
Speaker 8 (14:03):
I guess so in the purest of pure reforms, they
are just renting computing resources to anybody that wants to
run an AI infrastructure. They are a very big Invidia shop.
They basically buy GPUs from Nvidia. They create a network
or an infrastructure, and they give it to people to
go out and experiment or do whatever they need to
do on that infrastructure. It's no different than what AWS does,
(14:26):
but very heavy focus on GPUs rather than the CPU.
So that's really the big difference between a pure play
provider like Corevive versus Amazon Web Services.
Speaker 4 (14:35):
Now, if you can dig into some of the background,
what kind of challenges has Core We've had in the past.
I mean, didn't they have a pretty dismal IPO.
Speaker 9 (14:43):
Yeah.
Speaker 8 (14:44):
I think that's really the most important thing is, you know,
the everybody thought when they're going to come out as
the first pure play you know AI infrastructure IPO, it's
going to be extremely popular, but it didn't happen. And
the reason for that is because they need a large
amount of upfront capital to build these data centers, and
then the workload comes in over the next several years.
(15:04):
So there's a lot of questions about whether there's going
to be sustainability of this GPU demand going forward several
years out. So that's why you were right. The IPO
came at forty In a few days, it was down
to thirty five, but now we're seeing you know, the
stock closer too wants sixty before this deal was announced,
so I you know, we have talked about it before that.
You know, why aren't they doing a secondary when it's
(15:25):
like one hundred and sixty bucks stock of What they
did instead is they use their stock to go out
and buy another competitor I shouldn't say competitor, but you know,
another company in that space, so that it expands their capacity.
And you know, I think they're doing the right thing
by using stock at this point.
Speaker 2 (15:41):
Are there more core weaves out there on a row
kind of more pure play AI stories, maybe the kind
of the sausage of AI, if you will, the guts
that somebody could take public.
Speaker 8 (15:54):
There are multiples of them there, but they are much
smaller size in Kobe there, I would say there would
be hundreds of them at this point, because you know,
you go out, you buy the GPU, you go out
and start renting it out in the in you know,
in a long time ago, this high powered computing was
used for bitcoin mining, and then you know, when that's
not in favor, these guys are renting out their infrastructure
(16:16):
for other reasons. So there are other plays out there.
But almost all of them are much smaller than core
Viv from a you know, pure play point of view.
Speaker 4 (16:24):
Now we digged into Krewey, what about core Scientific, what's
the attraction to them?
Speaker 8 (16:30):
I mean, it's just they're expanding the number of you know,
the capacity that they have to process the transactions in
a sense that Corviev has a massive backlog right now.
They have people wanting to use their services, and then
these guys have to go out and lease it from
you know, other companies like Courre Scientific in this case,
they said, you know, they have an agreement with them
to lease their facilities. They just said, you know, we'll
(16:52):
buy it out and expand their size. And I think
that's as simple as that, all right.
Speaker 5 (16:56):
Thanks to Anna rog Rana, Bloomberg Intelligence, Technology and List, we.
Speaker 2 (17:00):
Moved next to the news in the auto sector this week,
shares a Tesla fell after recent news that CEO Elon
Musk was forming a new political party.
Speaker 5 (17:08):
Well mus said he's going to take on Republicans and
Democrats with the America Party, focusing on House and Senate
seats for the next twelve months.
Speaker 2 (17:16):
For more guestos, Lisa Matteo and I were joined by
Craig Trudell, Bloomber Global Autos editor. We first asked Craig
why investors are concerned about Elon Musk.
Speaker 10 (17:25):
I think they see all sorts of risks here. You know,
this is a matter of now, you know, not just
alienating Democrats, but but also now going after Republicans and
and you know, really sort of ticking off Donald Trump.
And we've seen that with Trump going from you know,
kind of biting his tongue when Musk was first attacking
(17:47):
you know, the big beautiful Bill to really going after
Musk in a more sort of pitched way. And you know,
so so this is you know, a risk for him
to to sort of make himself in anem and of
both sides of the aisle in Washington potentially, but also
you know, just a great big distraction after he's assured everybody,
(18:09):
you know on multiple occasions, Look, I'm going to you know,
sort of get back to business and and uh, you know,
tend to to Tesla more than I have been, you know,
since last year.
Speaker 2 (18:20):
So I have to ask this question, is there a
board here at this company that Musk here?
Speaker 10 (18:27):
There is, you wouldn't necessarily know it from the actions
of the board, right, Uh, you know, to the extent
that we've heard from the board recently, it's been to say, uh,
you know, Elon's are our guy. Uh, you know, they
they batted down a report in the Wall Street Journal
just in the last few months about you know, potential
succession planning at the company. I think the sort of
(18:51):
read of that, a close read of that story, it
wasn't necessarily the case that what the journal was saying
was that they are, you know, we're actively looking to
replace Musk. It was potentially more of a matter of
of you know, sort of doing the job that you
would expect a board to do. I should sort of,
you know, give them a credit in that regard that
at least they're preparing for, uh you know, the potential
(19:14):
of needing to look for a next CEO. But you know,
Musk is very much in control of this company, and
that was something that uh, you know, the Delaware Chancery
Court judge who throughout his pay package, uh you know,
really emphasized in her ruling last year when she said,
you know, he's very much in control of this company
and its board, and you know, on those grounds, uh
(19:37):
you know, throughout his compensation package, which has created, you know,
another mess and and you know, I think this, you know,
political uh endeavors, you know, only only complicates the board's
attempt to try and get him him compensated in a
in a way that he's going to be happy with
now quick.
Speaker 4 (19:56):
Not too long ago, we heard Elamas saying, you know what,
I'm going to get back to it. I'm going to
focus on tessel. This was after the last earnings and
now we're seeing the shift, right, he's talking about this
America Party. I mean, is this something that investors should
be concerned about? These kind of going back on.
Speaker 11 (20:11):
His word there?
Speaker 10 (20:12):
Yeah, I mean I think you know some of the
it's it's not the only way in which he's sort
of undermined himself. And you know, potentially you made an
investors question the things that he's been telling them because
he also, you know, said to Bloomberg back in May
that our sales are turning around, right, and that was
(20:33):
not born out in the deliveries numbers that the company
reported last week. They had a thirteen percent year over
year decline in worldwide vehicle sales. That was almost bang
on what they posted for the first quarter. So, you know,
for him to say, you know that he thinks in
terms of political spending, he's he's done enough that he's
going to, you know, do a lot less of it
(20:54):
in the future. You know, that was what he said
in May, and this is is pretty much one hundred
any degrees different from what he was saying.
Speaker 5 (21:02):
Then, all right, Thanks to Craig Trudell, Bloomberg Global Autos Editor.
Speaker 2 (21:06):
We move next to the biotech space. President Donald Trump
recently signed a three point four trillion dollar budget bill
into law, which includes an extension of tax cuts.
Speaker 5 (21:15):
The package represents a major political party victory for Trump.
But what does this mean for the pharmaceutical industry?
Speaker 2 (21:21):
From more on this guest host Lisa Matteo and I
turned to Sam Fizzelli, Bloomberg Intelligence, Director of Research for
Global Industries and senior pharmaceuticals analyst. You first asked Sam
what this bill means for the farm companies.
Speaker 12 (21:33):
So, the one big, beautiful bill had in it a
couple of things, many things, obviously, I can't remember how
many pages it was supposed to be. But for the
farmer industry, I'm going to focus on two things right now.
Right one is a good thing. So there is an
orphan drug change that impacts the IRA and actually impacts
(21:53):
some really big drugs. Here, what's an orphan drug. When
you develop a drug for a patient population that less
than two hundred thousand in the US, you called an
orphan drug. You get a special exemption. It really helps
you in terms of your duration of time that it
can be on the market et irrespective of your patent expiry.
It was all set up to help companies develop drugs
(22:16):
for these underserved markets. Two undred thousand. Okay, it's not small.
It's not big, but it's not that small. So it helped.
One of the big drugs that had this was Cultruda,
which is the biggest selling drug at the minute, and
that's for cancer from merg So when IRA came along,
it said, what we're going to do is say your
drug twenty fourteen approval Fortruder under orphan drug. Great, if
(22:42):
you're an ophen drug, you don't fall into IRA the
renegotiation of price and all that. But as soon as
you get another indication, then that clock starts from the
original data of approval. So if you had a drug
orphan drug in twenty fourteen and you get some other
indication in twenty twenty two. They date back the count
the clock counting to twenty fourteen. That was terrible. It
really means that nobody would want to do multi indication tests, etc.
(23:06):
So that's been changed once and Woven drug is you
can keep that date. And so what does that mean
for Ktruder from Merk one extra year before price negotiations
by Medicare, And that's a twenty thirty billion dollar drug
selling something like fifty percent of his revenues in the US.
That's a huge win for the industry, Sam.
Speaker 2 (23:28):
Another big I guess component of this administration's policy has
been cutting funding or maybe threatening the cut funding for
research universities. And I have long experience with Duke University,
which is a huge medical center and research area. Here's
what's your industry saying about those potential cuts.
Speaker 12 (23:47):
Yeah, the industry itself is relatively quiet, Paul, because what
they don't want to do is is I don't know
whether the right phrases here, shake the target, tiger's cage
or whatever, you know, rattle the whole set here. But
in reality there is a I think what I heard
the last number was a twelve percent increase in applications
(24:08):
to some of the top universities in Europe versus what
they were last year from the US. So that's folks
that would have gone to or wanted to go to Harvard,
they're now looking at Oxford, Cambridge, Sance, Pot etcetera. These
very brilliant universities across Europe. So there's that issue. But
remember in the OBBB, there's also another area where there
(24:29):
is a cup to Medicaid spending. That's eleven million Medicaid
covered folks that lose it. That will also have repercussions
for pharma companies, healthcare in general. And of course you
go to a hospital you don't have insurance, they're going
to treat you. Who's going to pay for that. It's
going to go on your premium? That's a tax on you.
Speaker 6 (24:49):
You know.
Speaker 12 (24:49):
Let's see how this all pans out. But not good
there either.
Speaker 4 (24:53):
All right, Sam, I want to talk about the Medicaid cuts.
I'm going to kind of put you on the spot there,
but it's going to affect insurers who focus on Medicaid.
They might lose customers. So what does this mean for like,
let's say Elevant's Health, United Health companies that do deal
with this.
Speaker 12 (25:08):
Yeah, So They are clearly under pressure and there's a
risk for them, and one of the issues is exactly
what you just said. You know, this is completely upsetting
the card here for the insurance in general. The point
is I'm not convinced that they will necessarily lose out.
I mean, we have dedicated expert analysts who cover the sector,
(25:28):
et cetera. But usually what's going to happen is that
if they're not making money elsewhere, they're going to try
and raise premium somewhere else, which is what I said
to start with.
Speaker 5 (25:37):
All right, Thanks to Sam Fazzelli, Bloomberg Intelligence, the director
of research for Global Industries and Senior Pharmaceuticals, and just ahead,
look at Bloomberg Intelligences ten companies to watch in the
third quarter.
Speaker 2 (25:50):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies and one
hundred and thirty industries. You can access Bloomberg Intelligence via
b I go on the terminal.
Speaker 5 (26:00):
I'm Paul Sweeney and I'm John Tucker. This is Bloomberg.
Speaker 1 (26:11):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple cocklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 5 (26:25):
I'm Paul Sweeney and I John Tucker filling in on
Bloomberg Intelligence. We move now to research from Bloomberg Intelligence
titled Banking Booze and Double Sevens wheels Ten Companies to
watch right Now.
Speaker 2 (26:39):
It discusses ten companies to look at a four in
the third quarter of twenty twenty five. For more, guest
host Norma, Linda, and I were joined by Tim Craig,
head Bloomberg Intelligence, Chief Content Officer. We first asked him
to break down his recent list of ten companies.
Speaker 9 (26:52):
These ten ideas are all part of a broader list
of what we call focus ideas. Focus ideas are where
are analysts around the cross regions cross sectors have high
conviction fundamental points of view that they think are different
from what the market thinks anti consensus, and importantly, they're
catalysts coming up that we think can change market perceptions.
(27:15):
And these ten all have important catalysts coming up during
the third quarter. And just to put it out there,
you can see all of these focus ideas on bi
focus on the terminal.
Speaker 2 (27:28):
Tim, What I like about these ideas, you know, because
people are always looking for ideas long and short. You
guys have the ideas. And what I really like that
this research format is you have the triggers, what's going
to make what has to happen in order for this
call to work on a particular stock, Aston Martin. I'm
asking for Matt Miller, what's the call here on Aston Martin?
Speaker 9 (27:50):
So the call on Acid Martin. As much as I
like the cars, and obviously this is where the double
O seven reference comes from, They've got a really interesting
new lineup of vehicles, but they're short on V twelves
and notwithstanding the world of evs and all that sort
(28:12):
of stuff, the high end V twelves from Ferrari and
Lamborghini are hot. And you look at the inventory levels
of Aston Martin on the lots, they're too high. We
think that there's a capital infusion that's likely needed in
coming months, and so we actually have a cautious view
on Aston Martin from that perspective, Tim, you.
Speaker 7 (28:35):
Are always putting out super interesting stuff. I mean, we
had fifty companies to watch in January and then we
have the quarterly update in April and then of course
now this story that's out loving the graphics here. How
long did it take to put us together?
Speaker 9 (28:48):
Well, it's an ongoing process of working with our analysts
in terms of where do we see these ideas coming from,
and then you know, our friends in business weeek like
to pull together the graphics on these things. It is
a It is a good looking piece on the on
Bloomberg dot Com.
Speaker 2 (29:10):
Booze Dagio. What's the story there, Yeah.
Speaker 9 (29:14):
The Agio it ties in a little bit with a
couple of ideas here. You know, I mentioned Aston Martin.
That's obviously a high end consumer idea. And even though
we're concerned about Aston Martin specifically, the high end luxury
vehicle market is good. Similarly with the Agio high end,
high end, Booze high end spirits. They are the world's
(29:35):
largest spirits manufacturer, is doing relatively well. You know, their
recent sales trends have been robust. We think that's going
to continue to show through. There has been concern about
things like tariffs and what could be the impact, especially
from a US consumer base. We're less concerned and we're
(29:55):
optimistic another consumer higher end idea. You guys, know and
love in the States is Dick's Sporting Goods. You know,
this is a classic good old consumer's growth story where
not only do you know the store, but you might
have been in one of their new bigger formats where
(30:16):
they have you know, that much more kit. Their sales
trends continue to be quite good despite concerns about what
are tear's going to mean for consumer here or there?
So you know those are all those are all consumer ideas.
There's certainly a common thread there.
Speaker 7 (30:32):
You mentioned Dixon. I'm looking at easy Jet, which of
course we know is a low cost British airline, and
we have a sunny outlook here, But what do you
think will be the most surprising call here for readers.
Speaker 9 (30:44):
Yeah, it's interesting in this instance. Obviously this is not
the high end consumer. This is everyday consumer. Is that
this isn't so much about the demand, which actually demand
for travel and experience continues to be pretty good. This
is more of a story on an operational basis. They're
replacing a lot of older planes with newer planes that
(31:09):
have bigger capacity and much more fuel efficient, so this
is a margin story. Easy Jet has historically lagged behind
Ryanair at the other low cost carrier here in Europe.
We think that that's set to change all right.
Speaker 5 (31:23):
Thanks to Tim craig Head, the Bloomberg Intelligence Chief Content Officer.
Speaker 2 (31:28):
We moved next to the digital media space.
Speaker 5 (31:30):
In late May, the TV advertising platform Mountain had its
initial public offering, with shares trading on the New York
Stock Exchange. It's under the ticker MNTN.
Speaker 2 (31:41):
For more on this recent IPO and the latest in
the streaming business, guest host Lisa Matteo and I were
joined by Mountain President and CEO Mark Douglas. The first
asked Mark to talk to us about going public.
Speaker 11 (31:52):
It was about six weeks ago, and I'll tell you,
six weeks ago it was not a given that you're
going to take a company public is two years of planning,
but seemed extremely last man. I'm talking hours before we
started the road show. We were still with bankers Morgan, Stanley,
City Avercurty siding on the timing, and we were like,
(32:15):
are there is there going to be a jobs report
next week?
Speaker 5 (32:17):
Is there going to be an inflat?
Speaker 3 (32:18):
Like?
Speaker 11 (32:18):
We just needed a clean window at time, and we
got it done and I think it helped a lot
of other a few other companies you know, kind of
follow us. Like I like, I grew up in New
York City. You know how New Yorkers will like throw
their arm in between the elevator doors, like like to
keep the elevator open. I feel like mounted that to
(32:39):
the IPO market. We just threw ourselves between the doors,
kept it open, and a few companies have followed us.
Speaker 5 (32:45):
Good stuff.
Speaker 4 (32:46):
I did that the other day. It didn't work for
me when I threw the Yeah.
Speaker 11 (32:50):
You want to get your arm back by the time
you get to the other where you're going.
Speaker 4 (32:55):
You guys do the ad business right, And we talk
a lot about AI. How it's affecting, you know, companies
and workers and just changing the corporate workspace. How is
it affecting the ad business.
Speaker 11 (33:06):
It's having a really big impact and kind of two ways.
One is I think as a company you have to
be doing everything you can to leverage AI. So it's
having a big impact on our sales, our marketing. Things
like three quarters of our revenue now comes from inbound leads,
partially because we're leveraging AI technology and make our marketing
(33:27):
more efficient. We're doing the same thing for our customers sales,
our sales headcount is very stable again because we're getting
more productivity. But then it's also affecting the business. I mean, ultimately,
our customers are looking for their next customer, so they're
using Mountain on streaming TV, They're using Matter on social,
(33:47):
Google on paid search in order to leverage digital marketing
to pring, you know, put to promote their products or
meeting our customers products. And we're using AI technology to
help identify who their target customers. So those TV ads
are super targeted specifically towards you because you show behavior
(34:08):
that this might be a product you're interested in. So
it's AI across the business, and I'll tell you it's
I mean, if you're not doing that, you're losing right now.
I mean, it's it's the intensity of it is pretty
pretty is quite up there.
Speaker 2 (34:21):
Talk about where we are in this migration of ad
dollars away from what i'll call traditional broadcasting cable television
to some of the more streaming platforms out there. It's
just been a sea change. Where are we in that
sea change?
Speaker 11 (34:35):
Well, pretty far along if you go in the companies
like Disney or Comcasts, NBC, Universal, Paramount. I was just
in can Can Lion literally three weeks ago, which is.
Speaker 2 (34:47):
Potentially Lisa the biggest boon boggle on the several times,
and I can say.
Speaker 11 (34:54):
That it's it's not terrible to be in the South
of France while you're at a trade show. I would
agree with that.
Speaker 2 (35:01):
By the way, Rose Krispies in the morning, well we.
Speaker 11 (35:07):
Had a billboard up that instead of saying Rose all day,
said row As all day, return on ad spend all day.
But I was just there meeting. I had a lot
of meetings with some of these the biggest media companies,
and they're they're only talk about streaming. It's it's like
they're streaming first in terms of the way they think
(35:28):
about their businesses. I'm talking again like a Disney and
so the customers meaning at that event, the biggest brands
traditionally now we're focused on the smaller brands, small mid
sized businesses. Streaming is is their focus, and I think
cable television I don't think they see a distinction. They
just see it as we're going to meet people wherever
(35:49):
they are, and where they are now is predominantly streaming.
But if they're still on cable, great, we'll meet them
there also. But it's a streaming world.
Speaker 4 (35:57):
It's kind of the I had cable and the only
reason I have it is because my husband wants to
watch sports. Yeah, right, so where does streaming stand with sports?
Because we're hearing so many different things, right the ESPN
MLB contract and what's happening with that? You know, could
he go to streaming? Like what could that be a
big drawn.
Speaker 2 (36:16):
To help for streaming.
Speaker 11 (36:17):
Yeah, So the year started those same kind of conversations
with live sports. So last year live sports on streaming
was very nascent and this year it's it's that's kind
of the focus of a lot of these companies. So
I think you look twelve months out, there won't be
any distinguishing aspect. If you want to watch NBA Finals,
(36:39):
it's available streaming live. It will be available cable live.
That won't be any differentiating factor except one. The brands
will prefer streaming because they get to be very targeted
and who they deliver the ads to, and the more
targeted they are, the more efficient that spend is for them.
So the brands prefer streaming costs of the digital targeting capabilities.
(37:03):
The consumer, you know, you should prefer whatever you like
and whatever is easiest to turn on, and what we
want to happen is we just want to see everyone
watching TV. However, you like to conxhibit.
Speaker 2 (37:14):
All right, the NFL. Are we going to see a
big Sunday package? Go to the NFL on a streaming Absolutely,
and really because that's gonna be a sea change.
Speaker 11 (37:23):
Well, the other thing is is when you bring in streaming,
you bring in Amazon to bid on it. You bring
in Netflix, you bring and these are some of the
literal I mean, Netflix is worth over half a trillion dollars.
You know, I don't know Amazon's current market cap. I
assume it's way up there. And so if you want
(37:43):
the highest level competitions and media company, you're going to
go streaming because that's where that money is.
Speaker 2 (37:48):
Yeah, I'm just gonna Netflix. I mean, another great year.
There's Disney just thirty seconds of Is Disney the number
two streamer out there? And is the room for three, four,
five six?
Speaker 11 (37:59):
The Disney, I do perceive. I think both data and
perception is number two behind Netflix. By the way, they
if you talk to them, they're not They're not like
happy and settled. They're a number two. They're definitely going
for number one. I think there's room for three and
a four, but there's clearly going to be a big
consolidation for who takes that spot, all.
Speaker 5 (38:21):
Right, Thanks to Mountain President and CEO Mark Douglas.
Speaker 1 (38:25):
This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each
weekday ten am to noon Eastern on Bloomberg dot com,
the iHeartRadio app tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
and always on the Bloomberg terminal
Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Intelligence
with Paul Sweeney.
Speaker 2 (00:13):
The real app performance has been the US corporate high yields.
These are two big time blue chip companies. One person's
cast is another person's animal spirits, breaking market.
Speaker 1 (00:23):
Headlines and corporate news from across the globe.
Speaker 2 (00:26):
Our view is, if the economy is slowing.
Speaker 3 (00:28):
Down, there is the possibility of the debt spirals.
Speaker 4 (00:30):
Both tutum competing and AI are going to power the future.
Speaker 2 (00:33):
People are just buying everything with tex.
Speaker 1 (00:35):
Bloomberg Intelligence with Paul Sweeney on Bloomberg Radio, YouTube and
Bloomberg Originals.
Speaker 5 (00:42):
I'm Paul Sweeney and I'm John Tucker, filming in on
Bloomberg Intelligence.
Speaker 2 (00:46):
On today's show, we dig inside the big business stories
impacting Wall Street and the global markets.
Speaker 5 (00:50):
Hn Every week we provide the in depth research and
data on some of the two thousand companies at one
hundred and thirty industries our analysts cover worldwide.
Speaker 2 (00:59):
Today we'll look at like Tech Split, investors may be
concerned about Cego Elon Musk's new political party.
Speaker 5 (01:04):
Plus we're gonna look at Bloomberg Intelligence. There's ten companies
to watch in the third quarter of twenty twenty five.
Speaker 2 (01:10):
But first we begin with the airline industry.
Speaker 5 (01:12):
And this week Delta Airlines reported quarterly earnings and also
reinstated a profit outlook for the year. The company also
said travelers are coming back for more.
Speaker 2 (01:21):
John Tucker and I were joined by George ferguson Bloomberg
Intelligence senior Aerospace, Defense and airlines analysts.
Speaker 5 (01:26):
And first we asked George for his take on Delta's
recent earnings.
Speaker 3 (01:31):
They reinstated guidance, but at a lower EPs than they
had initiated at the end of the year. I think
the market still looks a little bit soft to us.
For sure, fuel prices are giving airlines a bit of
a bolster on the bottom line. But I think what
we heard was on the demand side was more of
(01:53):
the continuing story, and that is that premium is holding
up really well, and Delta is going to do very
well because of their loyalty programs and such. Basic economy
isn't And if you look at Delta's you know, price
paid per mile flown for customer, it was down in
every single market that they served, or maybe flatish in
(02:14):
Latin America, but all the rest of the markets down
during the quarter. So to us, it looks like a
market that still needs to have capacity come out, and
some of it will.
Speaker 5 (02:24):
See The CEO pointed to progress in trade talks between
the US and other countries and the potential for some
geopolitical conflicts to abate. I mean the flying public, really,
I don't know, are they really thinking about this when
they book a flight on Delta or any other airline?
Speaker 3 (02:42):
Yeah, I mean, so when I think of that, I
think that's going to largely benefit his international business. I
don't know, you know, I was polis to pick him
because I get to Paris for Paris Air Show, you know,
every other summer, and when I was in Paris, it
was teaming with Americans. So it didn't seem like, even
with protests going on around, it didn't seem like demand
(03:05):
was off for international travel, at least you know, anecdotally
and some of the places I've been to. So I
don't know. I mean, I think it takes a little
bit of demand off, maybe a very little bit, but
right now I think the international traveler seems to be
rolling right over top of that and going anyways.
Speaker 2 (03:22):
George, how does an airline take capacity out of the
system is that just going from like ten flights between
Newark and Miami a day to I don't know seven
or eight.
Speaker 3 (03:33):
I mean, I think ultimately you gotta park airplanes. I mean,
you know, it's a capital intensive business. You don't want
to buy those airplanes and not utilize them. You take
your old stuff, you park it, you maybe retire it,
sell it off. But what I mean, what we're seeing
as three Q develops, and so we'll watch as closely
to see what it does to demand, is we're seeing
(03:55):
that the low cost carriers Spirit Frontier like they're taking
large portions out of their plan for three Q. Now
it may not hold. They may add some of those
those routes back, some of those seats back, but we're
seeing numbers down twenty percent in some of their capacity.
(04:16):
On the full service side, United in Delta is still adding.
United adding the most I think I want to say,
five is six is percent, Delta adding two three ish percent.
An economy that's not growing that fast. American look kind
of flat, meaning the economy is growing at rates, you know,
sub two percent. So it feels like the big full
(04:36):
service are going to push through here and try to
push through and continue to subsidize the back of the cabin,
that basic economy with the front of the cabin strength.
I feel like at some point they'll break that front
of the cabin. I think that's sort of how the
industry always works.
Speaker 5 (04:50):
We'll see in none of these reports, do I see
anything mentioned about JEFT fuel prices? Should we'd be concerned
about that?
Speaker 3 (05:00):
Well, I mean, right now it's a tailwind, and if
that reverses could be a problem. Right, But I mean
jet fuel prices are down because of slower global growth, right,
I mean, I think the geopolitical backdrop doesn't help it,
but it doesn't seem to have pushed prices up firm
or I think I saw Saudi's are talking potentially about
reducing some of the capacity ads they're coming on. I
(05:22):
don't know if that sounds strong enough yet, but if
jet fuel turns, that would be that would work against them,
because again, we've got an airline business. If you look
at Delta, they added three ish percent capacity or around
there for this quarter and revenues were flat. Right, So
they're adding capacity and revenues are flat. I generally don't
(05:42):
like that kind of backdrop.
Speaker 5 (05:45):
Uh business travel.
Speaker 2 (05:46):
Delta actually kind of called that out as perhaps corporate
travel is quote unquote strengthening. Are you seeing that across
the industry? And where I guess where's corporate travel versus
pre pandemic.
Speaker 3 (05:58):
Yeah, so they're not telling us anymore, all right, And
usually you tell us when you're really excited about where
it is. Look, I think the summer flying seasons are
all about leisure. What I heard was that they that
they were having weakening, weaker pricing power in sort of
the off peak demand times. And my read through on
(06:20):
that is that summer leisure traveler where they know they
got you right. All my friends call me, they go, hey, George,
I hear airfares are down, but I'm trying to travel
over July fourth week on vacation with the family, and
I'm paying a crazy price. And I'm like, yeah, because
you're going when everyone else in the world wants to
go somewhere.
Speaker 2 (06:37):
Right.
Speaker 3 (06:38):
So when I read off peak, I also think that's
probably a little bit of business travel, and so I
don't know that it's going swimmingly and they're not. They're
not giving us numbers. What I heard was kind of stabilized,
but I didn't hear to me, I didn't hear something
that sounded like it was getting much better, and again,
Summer's about leisure.
Speaker 2 (06:57):
Our thanks to George Ferguson Bloomberg Intelligence in your Aerospace,
defense and airlines analysts.
Speaker 5 (07:02):
And we moved next to the anti trust space.
Speaker 2 (07:05):
As the anti trust enforcement policies and President Donald Trump's
administration takes shape, deal makers and large businesses hoping for
relief could see a glimmer of hope in some areas,
but not all.
Speaker 5 (07:15):
That's according to Bloomberg Intelligence, which recently took a deep
dive into what the anti trust space could look like
during the second half of the year.
Speaker 2 (07:24):
For more guest host Normal Linden, I were joined by
Jennifer Reed, Bloomberg Intelligence senior litigation analysts. Your first es, Jen,
what the anti trust environment is looking like under the
Trump administration.
Speaker 6 (07:35):
You know, there was a lot of uncertainty going into
the election during the fourth quarter of last year, but
I think there are some really good signs for those
companies that want to engage in big deals going forward.
And the main reason is because Trump's anti trust enforcers
are willing to accept settlements with a remedy to allow
a bigger deal to close essentially meaning that if there's
an overlapping product and there'd be too much concentration in
(07:56):
the market for that product, that product line could be
sold in the larger deal can get closed. And the
Buying administration essentially refused to do that. They thought, if
a deal was problematic, we're just going to sue it
and try to block it. And it led to a
lot of lawsuits, a lot of abandonments, and a lot
of deals that just didn't get signed to begin with.
So because we're seeing this sign that deals can get settled,
(08:16):
I do think we're going to start to see more
bigger deals getting signed up in the second half and
probably next year two.
Speaker 2 (08:23):
So, you know, for all these agencies within Washington, they
obviously feel the presence of President Trump very keenly. The
folks that are in charge of the Federal Trade Commission,
the Department of Justice, how much independence do you think
they have at this.
Speaker 6 (08:40):
Point, you know, Paul, probably not very much. You know,
in the past, in particular, the Federal Trade Commission was
supposed to be quite independent, and really it was because
it had five commissioners, only three of which could be
from one political party, and they needed a majority vote
to take any action with a deal. But President Trump
has hired the two Democrats, so we now have three Republicans,
(09:03):
and we have three Republicans that very much are behind
him and his political visions. So I think that they
will essentially do what they think he wants done. And
we have seen an example of that because they did
clear a deal between two huge ad agencies, OmniComm and
Interpublic with what we call a behavioral agreement, which they
(09:23):
have said that they don't tend to want to take,
agreeing that they wouldn't prevent advertisers from advertising a next
to content that was right leaning or expressed conservative viewpoints
that they might not agree with. So that was very
much kind of in ligned with this administration and what
this administration wants. So I do think we're going to
see alignment in terms of what these remedies are and
(09:46):
the deals that get cleared with what Trump is saying
and with what Trump wants.
Speaker 7 (09:52):
So Trump terminated two Democratic FTC commissioners back in the
first quarter of this year, and of course we know
this did raise some significant concept tutional concerns in terms
of the commission's historical independence and of course enforcement efforts.
What is this really signaled in terms of potential policy changes.
Speaker 6 (10:13):
Well, you know, the thing is that, first of all,
we do all of these challenges are going up to
the Supreme Court, and we do think that this is
going to stick. We do think that because of some
of the other decisions about other agencies, that even though
the two Democrats do have an ongoing lawsuit about their termination,
we think that probably the Supreme Court is going to
side with Trump and they are going to remain terminated.
(10:34):
For practical purposes. As I said, I don't think that
there's very much impact here because you do need a
majority vote to settle or to suit a block a deal,
so you need three out of the five. In the past,
we have seen that the FTCs operated on a very
sort of bipartisan or nonpartisan basis. We usually have a
unanimous or maybe a four to one decision, but it
(10:55):
hasn't been that way. You know, starting with Biden, we
were seeing a lot of three to two decisions were
along party lines, right, So I think that we probably
would have continued to see that even if the two
Democrats were still there, you'd have the three Republicans. You'd
probably get your three to two vote to do whatever
it was that the Republican tinggent wanted. So from a
practical standpoint, it's not going to have that much impact
(11:17):
on the decision making for deals of this FTC.
Speaker 2 (11:20):
Are there any deals that are currently being held up
or being scrutinized that maybe the participants are saying, oh,
boyd now we're going to really sail through and we
thought maybe on our Biden it could be a tough
slide or anything we should keep an eye on, you know.
Speaker 6 (11:33):
Paul, The one I'm really interested in is the Google
Whiz deal. And I say that because we know this
administration is no friend to big tech, and we know
that they're staying really aggressive on the monopolistic conduct side,
where Google and Apple and Amazon and Facebook have all
been sued for monopolistic conduct. And to me, that deals
very interesting because just from an anti trust perspective, I
(11:54):
don't really think it poses anti trust concerns. You know
that the concern would be that you have a cloud
company that's marrying with a cloud security company and they
could foreclose rivals. But I think that there's ample competition
on both sides, both on the cloud side and the
cloud security side. That you probably don't have a very
strong theory of harm. But we know that this administration
doesn't necessarily love Google. I'm going to be interested to
(12:16):
see what happens there, but I suspect we're not going
to learn in the second half. It's probably going to
push into the beginning of next year.
Speaker 5 (12:23):
All right, Thanks to Jen Reed, Bloomberg Intelligence senior litigation analysts,
and just ahead, we're going to look at what President
Donald Trump's new tax bill means for the pharmaceutical industry.
Speaker 2 (12:33):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing indepth
research and data on two thousand companies and one hundred
and thirty industries. You can access Bloomberg Intelligence via b
I go on the terminal.
Speaker 5 (12:43):
I'm Paul Sweeney and I'm John Tucker. This is Bloomberg.
Speaker 1 (12:52):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple, Cocklay, and Android
Otto the Bloomberg Business App. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 5 (13:06):
I'm Paul Sweeney and I'm John Tucker filling in on
Bloomberg Intelligence.
Speaker 2 (13:11):
We moved to some news in the tech space.
Speaker 5 (13:13):
And this week we heard that the AI cloud computing
startup core Weave is acquiring the data center operator Core Scientific.
It's an all stock transaction. It's valued at nine billion dollars.
Speaker 2 (13:26):
For more. Guest hosts Lisa Matteo and I were joined
by On a Rock Ranna Bloomberg Intelligence senior technology analysts.
We're first to ask on a Rock how this deal benefits.
Speaker 8 (13:34):
Core weave me and think about it, that they have
capacity to process a summer of transactions, all the backlock
that they have with this particular deal, they are expanding
their infrastructure. I mean, it's a very simple deal as
if you know, they're just buying more factories to produce
what they do. So this is you know, it's it's
as simple as that, all right.
Speaker 2 (13:52):
So this I'm not a tech person, so but I
know this tell us what core Weave is. What did
they do and why are they showing out nine billion
dollars to get bigger?
Speaker 8 (14:03):
I guess so in the purest of pure reforms, they
are just renting computing resources to anybody that wants to
run an AI infrastructure. They are a very big Invidia shop.
They basically buy GPUs from Nvidia. They create a network
or an infrastructure, and they give it to people to
go out and experiment or do whatever they need to
do on that infrastructure. It's no different than what AWS does,
(14:26):
but very heavy focus on GPUs rather than the CPU.
So that's really the big difference between a pure play
provider like Corevive versus Amazon Web Services.
Speaker 4 (14:35):
Now, if you can dig into some of the background,
what kind of challenges has Core We've had in the past.
I mean, didn't they have a pretty dismal IPO.
Speaker 9 (14:43):
Yeah.
Speaker 8 (14:44):
I think that's really the most important thing is, you know,
the everybody thought when they're going to come out as
the first pure play you know AI infrastructure IPO, it's
going to be extremely popular, but it didn't happen. And
the reason for that is because they need a large
amount of upfront capital to build these data centers, and
then the workload comes in over the next several years.
(15:04):
So there's a lot of questions about whether there's going
to be sustainability of this GPU demand going forward several
years out. So that's why you were right. The IPO
came at forty In a few days, it was down
to thirty five, but now we're seeing you know, the
stock closer too wants sixty before this deal was announced,
so I you know, we have talked about it before that.
You know, why aren't they doing a secondary when it's
(15:25):
like one hundred and sixty bucks stock of What they
did instead is they use their stock to go out
and buy another competitor I shouldn't say competitor, but you know,
another company in that space, so that it expands their capacity.
And you know, I think they're doing the right thing
by using stock at this point.
Speaker 2 (15:41):
Are there more core weaves out there on a row
kind of more pure play AI stories, maybe the kind
of the sausage of AI, if you will, the guts
that somebody could take public.
Speaker 8 (15:54):
There are multiples of them there, but they are much
smaller size in Kobe there, I would say there would
be hundreds of them at this point, because you know,
you go out, you buy the GPU, you go out
and start renting it out in the in you know,
in a long time ago, this high powered computing was
used for bitcoin mining, and then you know, when that's
not in favor, these guys are renting out their infrastructure
(16:16):
for other reasons. So there are other plays out there.
But almost all of them are much smaller than core
Viv from a you know, pure play point of view.
Speaker 4 (16:24):
Now we digged into Krewey, what about core Scientific, what's
the attraction to them?
Speaker 8 (16:30):
I mean, it's just they're expanding the number of you know,
the capacity that they have to process the transactions in
a sense that Corviev has a massive backlog right now.
They have people wanting to use their services, and then
these guys have to go out and lease it from
you know, other companies like Courre Scientific in this case,
they said, you know, they have an agreement with them
to lease their facilities. They just said, you know, we'll
(16:52):
buy it out and expand their size. And I think
that's as simple as that, all right.
Speaker 5 (16:56):
Thanks to Anna rog Rana, Bloomberg Intelligence, Technology and List, we.
Speaker 2 (17:00):
Moved next to the news in the auto sector this week,
shares a Tesla fell after recent news that CEO Elon
Musk was forming a new political party.
Speaker 5 (17:08):
Well mus said he's going to take on Republicans and
Democrats with the America Party, focusing on House and Senate
seats for the next twelve months.
Speaker 2 (17:16):
For more guestos, Lisa Matteo and I were joined by
Craig Trudell, Bloomber Global Autos editor. We first asked Craig
why investors are concerned about Elon Musk.
Speaker 10 (17:25):
I think they see all sorts of risks here. You know,
this is a matter of now, you know, not just
alienating Democrats, but but also now going after Republicans and
and you know, really sort of ticking off Donald Trump.
And we've seen that with Trump going from you know,
kind of biting his tongue when Musk was first attacking
(17:47):
you know, the big beautiful Bill to really going after
Musk in a more sort of pitched way. And you know,
so so this is you know, a risk for him
to to sort of make himself in anem and of
both sides of the aisle in Washington potentially, but also
you know, just a great big distraction after he's assured everybody,
(18:09):
you know on multiple occasions, Look, I'm going to you know,
sort of get back to business and and uh, you know,
tend to to Tesla more than I have been, you know,
since last year.
Speaker 2 (18:20):
So I have to ask this question, is there a
board here at this company that Musk here?
Speaker 10 (18:27):
There is, you wouldn't necessarily know it from the actions
of the board, right, Uh, you know, to the extent
that we've heard from the board recently, it's been to say, uh,
you know, Elon's are our guy. Uh, you know, they
they batted down a report in the Wall Street Journal
just in the last few months about you know, potential
succession planning at the company. I think the sort of
(18:51):
read of that, a close read of that story, it
wasn't necessarily the case that what the journal was saying
was that they are, you know, we're actively looking to
replace Musk. It was potentially more of a matter of
of you know, sort of doing the job that you
would expect a board to do. I should sort of,
you know, give them a credit in that regard that
at least they're preparing for, uh you know, the potential
(19:14):
of needing to look for a next CEO. But you know,
Musk is very much in control of this company, and
that was something that uh, you know, the Delaware Chancery
Court judge who throughout his pay package, uh you know,
really emphasized in her ruling last year when she said,
you know, he's very much in control of this company
and its board, and you know, on those grounds, uh
(19:37):
you know, throughout his compensation package, which has created, you know,
another mess and and you know, I think this, you know,
political uh endeavors, you know, only only complicates the board's
attempt to try and get him him compensated in a
in a way that he's going to be happy with
now quick.
Speaker 4 (19:56):
Not too long ago, we heard Elamas saying, you know what,
I'm going to get back to it. I'm going to
focus on tessel. This was after the last earnings and
now we're seeing the shift, right, he's talking about this
America Party. I mean, is this something that investors should
be concerned about? These kind of going back on.
Speaker 11 (20:11):
His word there?
Speaker 10 (20:12):
Yeah, I mean I think you know some of the
it's it's not the only way in which he's sort
of undermined himself. And you know, potentially you made an
investors question the things that he's been telling them because
he also, you know, said to Bloomberg back in May
that our sales are turning around, right, and that was
(20:33):
not born out in the deliveries numbers that the company
reported last week. They had a thirteen percent year over
year decline in worldwide vehicle sales. That was almost bang
on what they posted for the first quarter. So, you know,
for him to say, you know that he thinks in
terms of political spending, he's he's done enough that he's
going to, you know, do a lot less of it
(20:54):
in the future. You know, that was what he said
in May, and this is is pretty much one hundred
any degrees different from what he was saying.
Speaker 5 (21:02):
Then, all right, Thanks to Craig Trudell, Bloomberg Global Autos Editor.
Speaker 2 (21:06):
We move next to the biotech space. President Donald Trump
recently signed a three point four trillion dollar budget bill
into law, which includes an extension of tax cuts.
Speaker 5 (21:15):
The package represents a major political party victory for Trump.
But what does this mean for the pharmaceutical industry?
Speaker 2 (21:21):
From more on this guest host Lisa Matteo and I
turned to Sam Fizzelli, Bloomberg Intelligence, Director of Research for
Global Industries and senior pharmaceuticals analyst. You first asked Sam
what this bill means for the farm companies.
Speaker 12 (21:33):
So, the one big, beautiful bill had in it a
couple of things, many things, obviously, I can't remember how
many pages it was supposed to be. But for the
farmer industry, I'm going to focus on two things right now.
Right one is a good thing. So there is an
orphan drug change that impacts the IRA and actually impacts
(21:53):
some really big drugs. Here, what's an orphan drug. When
you develop a drug for a patient population that less
than two hundred thousand in the US, you called an
orphan drug. You get a special exemption. It really helps
you in terms of your duration of time that it
can be on the market et irrespective of your patent expiry.
It was all set up to help companies develop drugs
(22:16):
for these underserved markets. Two undred thousand. Okay, it's not small.
It's not big, but it's not that small. So it helped.
One of the big drugs that had this was Cultruda,
which is the biggest selling drug at the minute, and
that's for cancer from merg So when IRA came along,
it said, what we're going to do is say your
drug twenty fourteen approval Fortruder under orphan drug. Great, if
(22:42):
you're an ophen drug, you don't fall into IRA the
renegotiation of price and all that. But as soon as
you get another indication, then that clock starts from the
original data of approval. So if you had a drug
orphan drug in twenty fourteen and you get some other
indication in twenty twenty two. They date back the count
the clock counting to twenty fourteen. That was terrible. It
really means that nobody would want to do multi indication tests, etc.
(23:06):
So that's been changed once and Woven drug is you
can keep that date. And so what does that mean
for Ktruder from Merk one extra year before price negotiations
by Medicare, And that's a twenty thirty billion dollar drug
selling something like fifty percent of his revenues in the US.
That's a huge win for the industry, Sam.
Speaker 2 (23:28):
Another big I guess component of this administration's policy has
been cutting funding or maybe threatening the cut funding for
research universities. And I have long experience with Duke University,
which is a huge medical center and research area. Here's
what's your industry saying about those potential cuts.
Speaker 12 (23:47):
Yeah, the industry itself is relatively quiet, Paul, because what
they don't want to do is is I don't know
whether the right phrases here, shake the target, tiger's cage
or whatever, you know, rattle the whole set here. But
in reality there is a I think what I heard
the last number was a twelve percent increase in applications
(24:08):
to some of the top universities in Europe versus what
they were last year from the US. So that's folks
that would have gone to or wanted to go to Harvard,
they're now looking at Oxford, Cambridge, Sance, Pot etcetera. These
very brilliant universities across Europe. So there's that issue. But
remember in the OBBB, there's also another area where there
(24:29):
is a cup to Medicaid spending. That's eleven million Medicaid
covered folks that lose it. That will also have repercussions
for pharma companies, healthcare in general. And of course you
go to a hospital you don't have insurance, they're going
to treat you. Who's going to pay for that. It's
going to go on your premium? That's a tax on you.
Speaker 6 (24:49):
You know.
Speaker 12 (24:49):
Let's see how this all pans out. But not good
there either.
Speaker 4 (24:53):
All right, Sam, I want to talk about the Medicaid cuts.
I'm going to kind of put you on the spot there,
but it's going to affect insurers who focus on Medicaid.
They might lose customers. So what does this mean for like,
let's say Elevant's Health, United Health companies that do deal
with this.
Speaker 12 (25:08):
Yeah, So They are clearly under pressure and there's a
risk for them, and one of the issues is exactly
what you just said. You know, this is completely upsetting
the card here for the insurance in general. The point
is I'm not convinced that they will necessarily lose out.
I mean, we have dedicated expert analysts who cover the sector,
(25:28):
et cetera. But usually what's going to happen is that
if they're not making money elsewhere, they're going to try
and raise premium somewhere else, which is what I said
to start with.
Speaker 5 (25:37):
All right, Thanks to Sam Fazzelli, Bloomberg Intelligence, the director
of research for Global Industries and Senior Pharmaceuticals, and just ahead,
look at Bloomberg Intelligences ten companies to watch in the
third quarter.
Speaker 2 (25:50):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies and one
hundred and thirty industries. You can access Bloomberg Intelligence via
b I go on the terminal.
Speaker 5 (26:00):
I'm Paul Sweeney and I'm John Tucker. This is Bloomberg.
Speaker 1 (26:11):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple cocklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 5 (26:25):
I'm Paul Sweeney and I John Tucker filling in on
Bloomberg Intelligence. We move now to research from Bloomberg Intelligence
titled Banking Booze and Double Sevens wheels Ten Companies to
watch right Now.
Speaker 2 (26:39):
It discusses ten companies to look at a four in
the third quarter of twenty twenty five. For more, guest
host Norma, Linda, and I were joined by Tim Craig,
head Bloomberg Intelligence, Chief Content Officer. We first asked him
to break down his recent list of ten companies.
Speaker 9 (26:52):
These ten ideas are all part of a broader list
of what we call focus ideas. Focus ideas are where
are analysts around the cross regions cross sectors have high
conviction fundamental points of view that they think are different
from what the market thinks anti consensus, and importantly, they're
catalysts coming up that we think can change market perceptions.
(27:15):
And these ten all have important catalysts coming up during
the third quarter. And just to put it out there,
you can see all of these focus ideas on bi
focus on the terminal.
Speaker 2 (27:28):
Tim, What I like about these ideas, you know, because
people are always looking for ideas long and short. You
guys have the ideas. And what I really like that
this research format is you have the triggers, what's going
to make what has to happen in order for this
call to work on a particular stock, Aston Martin. I'm
asking for Matt Miller, what's the call here on Aston Martin?
Speaker 9 (27:50):
So the call on Acid Martin. As much as I
like the cars, and obviously this is where the double
O seven reference comes from, They've got a really interesting
new lineup of vehicles, but they're short on V twelves
and notwithstanding the world of evs and all that sort
(28:12):
of stuff, the high end V twelves from Ferrari and
Lamborghini are hot. And you look at the inventory levels
of Aston Martin on the lots, they're too high. We
think that there's a capital infusion that's likely needed in
coming months, and so we actually have a cautious view
on Aston Martin from that perspective, Tim, you.
Speaker 7 (28:35):
Are always putting out super interesting stuff. I mean, we
had fifty companies to watch in January and then we
have the quarterly update in April and then of course
now this story that's out loving the graphics here. How
long did it take to put us together?
Speaker 9 (28:48):
Well, it's an ongoing process of working with our analysts
in terms of where do we see these ideas coming from,
and then you know, our friends in business weeek like
to pull together the graphics on these things. It is
a It is a good looking piece on the on
Bloomberg dot Com.
Speaker 2 (29:10):
Booze Dagio. What's the story there, Yeah.
Speaker 9 (29:14):
The Agio it ties in a little bit with a
couple of ideas here. You know, I mentioned Aston Martin.
That's obviously a high end consumer idea. And even though
we're concerned about Aston Martin specifically, the high end luxury
vehicle market is good. Similarly with the Agio high end,
high end, Booze high end spirits. They are the world's
(29:35):
largest spirits manufacturer, is doing relatively well. You know, their
recent sales trends have been robust. We think that's going
to continue to show through. There has been concern about
things like tariffs and what could be the impact, especially
from a US consumer base. We're less concerned and we're
(29:55):
optimistic another consumer higher end idea. You guys, know and
love in the States is Dick's Sporting Goods. You know,
this is a classic good old consumer's growth story where
not only do you know the store, but you might
have been in one of their new bigger formats where
(30:16):
they have you know, that much more kit. Their sales
trends continue to be quite good despite concerns about what
are tear's going to mean for consumer here or there?
So you know those are all those are all consumer ideas.
There's certainly a common thread there.
Speaker 7 (30:32):
You mentioned Dixon. I'm looking at easy Jet, which of
course we know is a low cost British airline, and
we have a sunny outlook here, But what do you
think will be the most surprising call here for readers.
Speaker 9 (30:44):
Yeah, it's interesting in this instance. Obviously this is not
the high end consumer. This is everyday consumer. Is that
this isn't so much about the demand, which actually demand
for travel and experience continues to be pretty good. This
is more of a story on an operational basis. They're
replacing a lot of older planes with newer planes that
(31:09):
have bigger capacity and much more fuel efficient, so this
is a margin story. Easy Jet has historically lagged behind
Ryanair at the other low cost carrier here in Europe.
We think that that's set to change all right.
Speaker 5 (31:23):
Thanks to Tim craig Head, the Bloomberg Intelligence Chief Content Officer.
Speaker 2 (31:28):
We moved next to the digital media space.
Speaker 5 (31:30):
In late May, the TV advertising platform Mountain had its
initial public offering, with shares trading on the New York
Stock Exchange. It's under the ticker MNTN.
Speaker 2 (31:41):
For more on this recent IPO and the latest in
the streaming business, guest host Lisa Matteo and I were
joined by Mountain President and CEO Mark Douglas. The first
asked Mark to talk to us about going public.
Speaker 11 (31:52):
It was about six weeks ago, and I'll tell you,
six weeks ago it was not a given that you're
going to take a company public is two years of planning,
but seemed extremely last man. I'm talking hours before we
started the road show. We were still with bankers Morgan, Stanley,
City Avercurty siding on the timing, and we were like,
(32:15):
are there is there going to be a jobs report
next week?
Speaker 5 (32:17):
Is there going to be an inflat?
Speaker 3 (32:18):
Like?
Speaker 11 (32:18):
We just needed a clean window at time, and we
got it done and I think it helped a lot
of other a few other companies you know, kind of
follow us. Like I like, I grew up in New
York City. You know how New Yorkers will like throw
their arm in between the elevator doors, like like to
keep the elevator open. I feel like mounted that to
(32:39):
the IPO market. We just threw ourselves between the doors,
kept it open, and a few companies have followed us.
Speaker 5 (32:45):
Good stuff.
Speaker 4 (32:46):
I did that the other day. It didn't work for
me when I threw the Yeah.
Speaker 11 (32:50):
You want to get your arm back by the time
you get to the other where you're going.
Speaker 4 (32:55):
You guys do the ad business right, And we talk
a lot about AI. How it's affecting, you know, companies
and workers and just changing the corporate workspace. How is
it affecting the ad business.
Speaker 11 (33:06):
It's having a really big impact and kind of two ways.
One is I think as a company you have to
be doing everything you can to leverage AI. So it's
having a big impact on our sales, our marketing. Things
like three quarters of our revenue now comes from inbound leads,
partially because we're leveraging AI technology and make our marketing
(33:27):
more efficient. We're doing the same thing for our customers sales,
our sales headcount is very stable again because we're getting
more productivity. But then it's also affecting the business. I mean, ultimately,
our customers are looking for their next customer, so they're
using Mountain on streaming TV, They're using Matter on social,
(33:47):
Google on paid search in order to leverage digital marketing
to pring, you know, put to promote their products or
meeting our customers products. And we're using AI technology to
help identify who their target customers. So those TV ads
are super targeted specifically towards you because you show behavior
(34:08):
that this might be a product you're interested in. So
it's AI across the business, and I'll tell you it's
I mean, if you're not doing that, you're losing right now.
I mean, it's it's the intensity of it is pretty
pretty is quite up there.
Speaker 2 (34:21):
Talk about where we are in this migration of ad
dollars away from what i'll call traditional broadcasting cable television
to some of the more streaming platforms out there. It's
just been a sea change. Where are we in that
sea change?
Speaker 11 (34:35):
Well, pretty far along if you go in the companies
like Disney or Comcasts, NBC, Universal, Paramount. I was just
in can Can Lion literally three weeks ago, which is.
Speaker 2 (34:47):
Potentially Lisa the biggest boon boggle on the several times,
and I can say.
Speaker 11 (34:54):
That it's it's not terrible to be in the South
of France while you're at a trade show. I would
agree with that.
Speaker 2 (35:01):
By the way, Rose Krispies in the morning, well we.
Speaker 11 (35:07):
Had a billboard up that instead of saying Rose all day,
said row As all day, return on ad spend all day.
But I was just there meeting. I had a lot
of meetings with some of these the biggest media companies,
and they're they're only talk about streaming. It's it's like
they're streaming first in terms of the way they think
(35:28):
about their businesses. I'm talking again like a Disney and
so the customers meaning at that event, the biggest brands
traditionally now we're focused on the smaller brands, small mid
sized businesses. Streaming is is their focus, and I think
cable television I don't think they see a distinction. They
just see it as we're going to meet people wherever
(35:49):
they are, and where they are now is predominantly streaming.
But if they're still on cable, great, we'll meet them
there also. But it's a streaming world.
Speaker 4 (35:57):
It's kind of the I had cable and the only
reason I have it is because my husband wants to
watch sports. Yeah, right, so where does streaming stand with sports?
Because we're hearing so many different things, right the ESPN
MLB contract and what's happening with that? You know, could
he go to streaming? Like what could that be a
big drawn.
Speaker 2 (36:16):
To help for streaming.
Speaker 11 (36:17):
Yeah, So the year started those same kind of conversations
with live sports. So last year live sports on streaming
was very nascent and this year it's it's that's kind
of the focus of a lot of these companies. So
I think you look twelve months out, there won't be
any distinguishing aspect. If you want to watch NBA Finals,
(36:39):
it's available streaming live. It will be available cable live.
That won't be any differentiating factor except one. The brands
will prefer streaming because they get to be very targeted
and who they deliver the ads to, and the more
targeted they are, the more efficient that spend is for them.
So the brands prefer streaming costs of the digital targeting capabilities.
(37:03):
The consumer, you know, you should prefer whatever you like
and whatever is easiest to turn on, and what we
want to happen is we just want to see everyone
watching TV. However, you like to conxhibit.
Speaker 2 (37:14):
All right, the NFL. Are we going to see a
big Sunday package? Go to the NFL on a streaming Absolutely,
and really because that's gonna be a sea change.
Speaker 11 (37:23):
Well, the other thing is is when you bring in streaming,
you bring in Amazon to bid on it. You bring
in Netflix, you bring and these are some of the
literal I mean, Netflix is worth over half a trillion dollars.
You know, I don't know Amazon's current market cap. I
assume it's way up there. And so if you want
(37:43):
the highest level competitions and media company, you're going to
go streaming because that's where that money is.
Speaker 2 (37:48):
Yeah, I'm just gonna Netflix. I mean, another great year.
There's Disney just thirty seconds of Is Disney the number
two streamer out there? And is the room for three, four,
five six?
Speaker 11 (37:59):
The Disney, I do perceive. I think both data and
perception is number two behind Netflix. By the way, they
if you talk to them, they're not They're not like
happy and settled. They're a number two. They're definitely going
for number one. I think there's room for three and
a four, but there's clearly going to be a big
consolidation for who takes that spot, all.
Speaker 5 (38:21):
Right, Thanks to Mountain President and CEO Mark Douglas.
Speaker 1 (38:25):
This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each
weekday ten am to noon Eastern on Bloomberg dot com,
the iHeartRadio app tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
and always on the Bloomberg terminal
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.