December 9, 2025 • 24 mins
Watch Scarlet and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Intelligence hosted by Paul Sweeney and Scarlet Fu
-Caroline Hyde, Bloomberg BTech Co-Anchor, discusses Donald Trump’s decision to allow Nvidia to sell advanced chips to China. This marks more than just a shift in US tech policy. It also raises questions about how far he’ll go to steady ties with Xi Jinping.
-Laura Martin, Senior Analyst at Needham & Company, discusses the latest at Warner Brothers Discovery. While Netflix and Paramount Skydance vie for President Donald Trump’s blessings in their competing bids for Warner Bros. Discovery, investors have an irony to consider.
-Matthew Griffin, Bloomberg Stocks Reporter, discusses Home Depot offering cautious preliminary guidance for next year, expecting comparable sales growth to be in a range of flat to up 2% for the year.
-Diana Rosero Pena, Bloomberg Intelligence Consumer Staples Analyst, discusses the latest with packaged foods. Campbell’s 1Q adjusted EPS and organic sales beat consensus estimates. While the reported number was positive thanks to some holiday inventory build by retailers, without this effect organic sales decline would have been worse.
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. 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 2 (00:23):
Through President Trump has now opened the door to Nvidia
selling some of its high end chips to China.
Speaker 3 (00:30):
Yeah, I'm not sure. I kind of can't follow the policies.
Some days the door's open, some days it's closed.
Speaker 2 (00:35):
Yeah, and it could always move in the other that's
the other risk.
Speaker 4 (00:38):
Right.
Speaker 2 (00:38):
Let's bring in Bloomberg Tech co host Caroline Hide to
tell us a little bit more so on b Tech.
I'm sure you're going to be talking all about this,
but Caroline, what does it mean that Nvidia can now
sell these h two hundred chips to China? Because that
is not the most advanced chips.
Speaker 1 (00:52):
Is it.
Speaker 5 (00:52):
It's not.
Speaker 4 (00:53):
It's based on Grace Hopper architecture, which isn't the Blackwell
that we're currently in. It isn't the Vera Rubin that
we're looking towards. It's the pre V's iterations. It is
ten x superior to the ah twenties that remember cast
Your Mind Back had also been deemed okay to ship
from the United States to China if a fifteen percent
cut was given to the US government, but that was
(01:14):
never signed into law. They were never able to execute
on that. And most importantly, China doesn't want them. And
I think this is the key the financial times of
reporting that basically already China's looking at putting curves licenses,
basically limiting the ability for certain companies to access the
H two hundreds even if Invidia is allowed to ship them.
And I think this is what everyone's got to currently digest.
(01:35):
I'm hearing time and time again from some of the
most powerful people in the technology space that we are
underestimating how sophisticated China is at using the Invidia chips,
the small amount they already have and some of those
homegrown ones.
Speaker 3 (01:47):
Typically, how has this trade policy negotiated? Who typically says
US tech company, you can sell this into China or
to other markets, or you can't. Is because it just
seems like it's now the whim of the present in
his ex account or truth social account setting trade policies
at how's it typically done well?
Speaker 4 (02:06):
Isn't it interesting that just last week Jensen Wang was
meeting with a president, but was meeting with some of
the leaders over in Congress. Most crucially, he was with
the Senate Banking Committee, because it's the Banking Committee oddly
that tends to be in charge of export restrictions, and
so it was that group of leaders. But many are frustrated,
and I was just at the Reagan Defense Forum National
(02:27):
Defense Forum this weekend, and there is handwringing going on
from Congress that they're being cut out of a lot
of these discussions. Really they should have ownership of to
how much trade should be allowed, But at the moment
these are coming through executive orders. And we know that
the President likes to cut a deal and Vidia, Jensen
Wang likes to cut a deal. They have a very
personal relationship. And most broadly, in Vidia and Jensen want
access to China. They think there's something like a fifty
(02:49):
billion dollar total addressable market they're being forced to have
to put down. At the moment, he's has zero percent
revenue coming from that country. But you've got this tussel
at the top of the China Hawks, who were worried
from anal security perspective, if you allow technology to go
from the US into China.
Speaker 2 (03:04):
But on the flip side.
Speaker 4 (03:05):
In Jenson Wrong would say, they're just going to build
it themselves, and we're forcing them to speed up that
by limiting my technology. Let our stack own that of
China's big large language model development.
Speaker 2 (03:17):
So you had mentioned that China didn't want to buy
the H twenty chips. Does China want to buy the
H two hundred chips?
Speaker 4 (03:22):
I think if you asked, what the reporting shows is
that if you turn to an Ali.
Speaker 5 (03:27):
Barbar or a Tensen or a by Do, they are.
Speaker 4 (03:29):
Limited by the amount of GPUs they have access to.
So I think more is more from their perspective. And yes,
the H two hundreds build on the H twenties, but
longer term, the government wants to focus on domestic supply here.
That's why you're seeing camera con do so well, while
you're seeing Huawei do well, while you're hearing Bido wants
to spin off its chip manufacturer. While we just had
that superb entrance to the market just of the Moore's
(03:50):
technology company that has shot up more than four hundred percent,
they do want to make it homegrown.
Speaker 5 (03:56):
Great store on a Bloomberg terurnal.
Speaker 3 (03:58):
Today, Apple shares have sorted thirty five percent since the
end of the gym as the market scrutiny of AI development
spending has made the company's lack of an AI strategy
a strength.
Speaker 2 (04:08):
So do nothing and benefit.
Speaker 5 (04:10):
I don't know, but I mean Apple.
Speaker 3 (04:12):
We always say about Apple they don't have to be first,
and tim that they are not first, but when they
do come into the market, they do it really well.
It's a thought out approach and that people, you know,
the Apple bullsmen saying, don't worry, don't worry, don't worry.
Speaker 5 (04:24):
They're going to be fine.
Speaker 3 (04:25):
There's two billion Apple devices out there, they'll be fine.
Speaker 5 (04:28):
I don't know.
Speaker 4 (04:28):
Yeah, And meanwhile, goodbye to the guy who is in
charge of AI policy over at Apple. Because of that
botched Apple intelligence roll up, people have been frustrated that
Apple seems to be a slow player to adoption, but
longer term, most in the generative AI space thinking that
we are going to be using this from a consumer perspective,
from our edge devices. Therefore, computer is going to change
(04:50):
in the way in which you know it. Your models
are going to change in the way in which you
know it, and eventually we will be doing running our
Chatchpt or our Gemini or whatever model you like on
your device. Eventually that means you'll need an Android or
an Apple or maybe some future AI device that hasn't
yet been created and is probably being developed in the
minds of the great leaders right now. But we'll have
to see how Apple continues to basically do the benefit
(05:13):
of not having got a load of debt and not
having spent an awful lot of money on the buildout,
because at the moment the come I think investors are
just still grappling with the sheer scale of capital expenditure
that's going into this and wondering whether there's going to
be a real upside. Can Apple get the upside without
making the infrastructure investment.
Speaker 5 (05:31):
Stay with us more from Bloomberg Intelligence coming up after this.
Speaker 1 (05:37):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am. He's Dene on Apple Coarclay, and
Android Auto with the Bloomberg Business app. Listen on demand
wherever you get your podcasts, or watch us live on YouTube.
Speaker 3 (05:52):
Our next guest one of the most highly respected media
analysts on Wall Street for a long time, and I
think the value that I really find from her res
or it's consistently over the years, is she's not afraid
to be out of consensus here. And I think she's
got a again, a non consensus call here that even
if you don't agree with it, it makes you think. And
that's the value of a good animals. Laura Martin joins
(06:12):
his senior analysts that need them company, Laura, as it
relates to Netflix, do you think they should even pursue
this deal here?
Speaker 6 (06:21):
Yeah, So we published a note this morning say no
that the big cultural Warner Brothers would create cultural problems
at Netflix. Netflix has about fourteen thousand employees and Warner
Brothers is about thirty five thousand, some of which they
wouldn't be buying, but it would be about twice as
many employees from let's call it the old world, the
fifty year old studio who really is averse to make
(06:44):
taking risks and they really do things the old fashioned
way and siloed, competitive, internally fighting culture. And that isn't Netflix.
Netflix is sort of single purpose disruptor. Everybody on the
same page, move fast and break things, iterate if you
get it wrong. And I just feel like the culture
(07:04):
that Warner Brothers is an anchor would be an anchor
to Netflix and a time when jenerative AI technology risks
are collapsing timeframes into weeks with the changes. So we
think the next disruption created by jeneritive AI requires really
fast reaction times, which Netflix has the fastest in media,
(07:25):
and it would really slow their reaction times if they
suddenly brought on twice as many employees that were stuck
in the fifty year old business model of the Hollywood studio.
Speaker 2 (07:34):
And you quantified the drag that this would have on Netflix,
what does that look like?
Speaker 7 (07:42):
So?
Speaker 6 (07:42):
I mean, I think what we're saying is that the
eighty three billion dollar purchase price that they would pay
to buy Warner Brothers would add another that cash would
be at risk of not returning its capital because would
bring all these cultural problems and envelop the entire consolidated
(08:04):
four hundred billion dollar entity.
Speaker 3 (08:07):
Lars, So, as it related to jen ai, is that
a friend or a foe to Hollywood, to the media companies?
Speaker 6 (08:16):
Yeah? So to date, Paul, what isn't different about jen
ai is it's being used as tools by humans, in
which case it's not different than the web. It's not
different than our smartphones our you know, our Apple phones
are you know, flashlights and communication devices and map they
replace Thomas Guides, so their utility.
Speaker 8 (08:36):
So so far.
Speaker 6 (08:37):
Jenai technology has been a tool or a utility for
human beings. I think the vision of Sam Altman at
open Ai, Elon Musk, Mark Zuckerberg over at Meta is
to have and certainly of course of Navidia is to
have to achieve what's called superintelligence, where machines trained machines,
(08:59):
and case it replaces people at some level. It does better, thinking, faster,
it's less emotional. So if that comes true and they're
saying that's ten years out, that's superintelligence, it would actually
replace humans. But in near term it's just like the
other three technological disruptions you and I've seen where it
makes our life better. It's a tool for humans to
do faster, better, safer work.
Speaker 2 (09:21):
So, Laura, you make the case that Netflix doesn't need
to buy Warner Brothers Discovery. It would be adding an
anchor and it would drag it down because it's this disruptor.
What about paramount skuidance? Doesn't that argument also apply or
does it not?
Speaker 6 (09:36):
It does, But the distinction I would make is Netflix
is large enough to go it alone, and with generative
AI collapsing timeframes, their culture is really well suited to
the technological you know, the future of the next five years.
Peace Guy is subscale. It probably can't survive without bulking up,
(09:59):
and it doesn't really have time to build in a
generative world because it's just too small and change is
happening too fast, so it needs to bulk up and
buy in something. We think they could get it closed
in six months because we think the senior Ellison is
good friends with Donald Trump and he would have it
sale through regulatory so it would happen faster, there'd be
(10:22):
less uncertainty, and it would allow peace Guy to survive.
So I think they have to take the technological risk
because they must have scale.
Speaker 2 (10:31):
Or they're going to die.
Speaker 6 (10:32):
So they might die because I'm right about the culture
problem and the anchor problem, but they're going to die
if they don't buy something anyway, so it gives them
a better chance to survive. I think to buy Warner.
Speaker 3 (10:43):
And Laurie you follow on Netflix, since it's inception here.
This is a company and a management team and a
board that's been pretty adamant.
Speaker 5 (10:49):
They don't they'd rather build from within than buy.
Speaker 3 (10:52):
What do you think is changed here, because this is
a huge turnaround for this company strategic wise.
Speaker 6 (10:58):
Yeah, Paul, you know, we really wanted to write a
note that says dogma is bad. I mean, they said
they'd never do advertising. They do advertising. They said we'll
never do live sports, and now they've broadcast NFL games
on Christmas Day. And then they said, well, we don't
like the Hollywood, we don't like the theatrical window, and
we don't want to release any films in the theatrical
(11:19):
window unless talent like directors force us because they want
Academy Award consideration, which is a turn which is a requirement.
To get an Academy Award, you have to have been
released in theaters. So that is really hurting them in
this In this those words are really hurting them with
the talent community. So when they say we will never
(11:39):
do something, please take that with a grain of salt
because they often reverse themselves completely one hundred and eighty degrees,
and it's really those words about the theatrical window are
really hurting their hurting the feedback loops with talent like
big talent like Jim Cameron and Scarce. Like all these
people that really are big talent, they all want a
theatre window and Netflix. They're scared to death that if
(12:03):
Netflix bought Warners, the theatrical window over five years would
go to zero.
Speaker 5 (12:08):
Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1 (12:15):
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 2 (12:29):
All right, let's move on here and talk a little
bit about Home Depot. Home Depot, of course did come
out with earnings a while ago, but they are giving
a bigger long term outlook here for its business. It's
an investor day kind of outlook. And for that we
have Matthew Griffin, He's a Bloomberg Stocks reporter, to just
talk us through some of the issues at Home Depot's face.
Because at the last earning support, Home Depot made clear
(12:52):
that the expected rebound in demand that it was looking
for had not yet materialized. Is the tone changing here
from Home Depot?
Speaker 8 (13:00):
Well, Scarlett I would say the tone really hasn't changed
in a meaningful way. Everyone's trying to make sense of
the economic moment that we're in. I mean, you were
just talking about economic data that we got this morning
that had some puts and takes in it when you
look at job openings versus layoffs, and I would say that,
like pretty much any economically sensitive company right now, Home
(13:25):
Depot is facing some puts in takes as well. So
they gave an outlook for comparable sales next year. They
are preliminary views. They'll be flat to up two percent.
That's lower than what Wall Street was looking for. But
then they also gave this market recovery scenario where there's
(13:45):
a bit more of a rebound in the US housing market,
more demand for home improvement, and in that scenario, comparable
sales would beat estimates at up four percent to five percent.
You know, you zoom out and you've got a picture
where mortgage rates have come down, but consumers are still
under pressure. Housing prices are still high, and so are
rates you know historically, and so you've got the consumer
(14:11):
trying to muddle through, companies trying to make sense of it,
and investors trying to make sense of it. You've got
the stock down a little bit pre market and now
just about flat on.
Speaker 3 (14:18):
The day, four hundred and seventy thousand employees at home Depot.
That is amazing, But I don't think I could gave
a job there because I really don't know a hammer
from a screwdrive.
Speaker 2 (14:26):
Okay, so back up a little bit, because Paul's goal
is to become a greeter at Walmart down the road. Like,
that's what he that's his dream job.
Speaker 5 (14:32):
That's the final career.
Speaker 2 (14:35):
Path, final destination.
Speaker 3 (14:37):
So what are they saying about just the consumer behavior
these days?
Speaker 5 (14:41):
I mean, interest rates are still high.
Speaker 3 (14:43):
Are people still working on their homes, you know, the professional.
Speaker 5 (14:48):
Versus the private?
Speaker 3 (14:50):
What's going on with their core customer?
Speaker 8 (14:52):
Yes, So we can actually look back to a few
weeks ago when they reported earnings and actually cut their
profit outlook for this year. What we saw in was
a continuation of trends at the company, which is you
have flagging demand for some of the bigger ticket home remodels. Again,
(15:14):
because there's pressure on consumers, people are not taking on
big projects, projects that require financing. At the same time,
they are shifting maybe into projects like gardening, smaller projects.
So it's not that people don't want to do anything.
It's that people are maybe the doing the home remodeling
equivalent of trading down here, which is a trend that
(15:36):
we've seen in other corners of the economy. For example,
Walmart's business holding up. You know, if you want that
greater job, it might be open for you because consumers
are trading down. That's good for Walmart's business, it's good
for a segment of Home depots business, but not enough
to support the overall outlook so far. And if you
look at these slides from their analyst today, they see
(16:02):
pressures continuing, including high home prices, and that's weighing on
consumers here.
Speaker 2 (16:07):
Yeah, the affordability crisis strikes again. So, Matthew, I'm looking
at Loads shares, which are of course a competitor to
Home Depot down at the moment as Home Depot's basically unchanged.
Do we presume that these same headwinds that are dogging
Home Depot are the same that kind of our clouding
the outlook for our LOWS or does Loads have a
different approach?
Speaker 8 (16:28):
Interestingly, you know, they both serve similar corners of the
market home improvement. So far, it does seem like LOWS
has fared a little bit better this year, at least
with how investors have viewed the way they've been managing
through their shares currently down about two percent on the year,
compared to down ten percent for Home Depot. If you
(16:50):
look at that reaction today, it's possible investors are thinking
there could be some of the same headwinds in their future.
But again, it do us seem like they've gotten a
little bit more of a pass so far.
Speaker 3 (17:03):
I about tariffs here, What's what are the companies saying
about tariffs and their ability to deal with them?
Speaker 8 (17:08):
So so far, the companies in their commentary have really
focused on the state of the consumer rather than directly
talking or at least talking constantly about tariffs. I would
say though, that Home Depot did call out high building
material costs as a reason that consumers are deferring home
(17:32):
improvement projects, So you know, you do think about tariffs
on lumber things like that. That doesn't help that side
of the equation.
Speaker 5 (17:40):
Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1 (17:48):
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 that's just live on YouTube.
Speaker 2 (18:02):
We want to talk about Campbell's. The company came out
with its fiscal first quarter earnings. Both the top line
and the bottom line beat analy assessments, but the direction
of travel for revenue profit is still lower. Let's bring
in Diana Rosera, pennacious Bloomberg Intelligence consumer staples analysts on
the latest on Campbell's and of course the package foods
industry overall. So Campbell's has two businesses, the snacks business
(18:25):
and the meals and beverages portfolio. How are the two
businesses doing, Diana, Well, they are just.
Speaker 7 (18:30):
Put some takes on both of them. You know, for
meals and beverages, there's some headwinds on ready to serve soup,
whereas broth and condensed soup, which is usually used in cooking,
is improving. You know, you have V eight, which is
not really it's a brand that is not really doing
that well so.
Speaker 5 (18:51):
Well to me. To me, that's like my healthy eating
for the day. Drink a little one in the morning.
Speaker 2 (18:56):
When you're on the plane, You'll get a VA and
you're like, I'm.
Speaker 5 (18:58):
Good, I'm good, I'm good. That's WoT. No need to
go to the gym on exactly.
Speaker 7 (19:02):
So, but it's still facing some headwinds for snacks. It's
it's kind of I found out odd because there seems
to be a bifurcation of the consumer trends here. You
have salty snacks being you know, challenged by people trying
to eat healthier, reducing their sodium, but then you have
(19:24):
cookies outperforming. So I guess it's the salad with the fries.
Speaker 2 (19:28):
All right, which I love.
Speaker 5 (19:30):
By the way, Yes, yeah, absolutely.
Speaker 3 (19:32):
Campbell Wills agreed to take a forty nine percent stake
in Lot Regina. What is law Regina? What's Campbell's trying
to do here?
Speaker 7 (19:38):
Yeah, so that is the supplier for REOs, which they
bought it a year or so ago, and that it
makes it kind of like have a little bit more
control on the supply side. There has been some headwinds
on this brand because tomatoes are being exported or imported
to the United States, so they have to face some tariffs.
(20:01):
So you know, with this they're trying to not only
offset tyres, but have a little bit more on the
supply chain, have a little bit more control on that.
Speaker 5 (20:09):
Here's my Rao story.
Speaker 3 (20:10):
I mean it's for people to arn't in New York City.
It's a very famous restaurant in New York. It's very
difficult to get a table there, to get a reservation.
On my thirty years of Wall Street, I've asked people
to take me. Who I know go there to take me.
I haven't gone once. Really, Yeah, I mean it is impossible.
Like I never asked people to take me out on
their great golf course. I just wait for the invite
to come.
Speaker 5 (20:30):
But for REOs, I've actively tried to get.
Speaker 2 (20:33):
And haven't gotten. Anyone who has to invite into Rao's,
let possibly know. You know, I did actually get to
eat there. We ordered take out during the pandemic when
they take out. Yeah, so that was my one time
I got to.
Speaker 5 (20:44):
Eat Rare very good.
Speaker 2 (20:45):
But Diana, I want to ask you about, of course,
the controversy that surrounded Campbell's. Just last month, there was
an executive he was a vice president of the IT
department who talked about how the company's products are being
made for poor people and you know, had some disparaging
remarks about some of the employees, the Indian employees. Is
(21:06):
that something that's going to cast a pall over Campbell's
I mean, do you see any long term effects from that?
Speaker 7 (21:11):
Well, usually they did not address that during the call,
but I think it's it might be a short term
headwind if there's any boycott happening. I don't I'm not
necessary I don't necessarily think that there's going to be one.
It's just one executive, and the company went ahead and
kind of tried to put on record that they're not
(21:32):
necessarily agreeing with what he said. So it's you know it,
I don't necessarily see that as a significant headwind for
the company.
Speaker 3 (21:41):
Package good companies, I kind of think of them kind
of a GDP top line growth story at best. What's
the twenty twenty six out lot for your companies? Are
what are investors looking for?
Speaker 7 (21:52):
So for twenty six, they're hoping that there's some light
at the end of the tunnel in terms of volume growth. Again,
it might be a second half of the year story
because comps get a lot easier going forward, but you know,
profitability seems to be a little bit more difficult because
they have tariffs, they have to contend costs steal are
(22:15):
a little bit higher. Specific specifically on the employee side,
and there's also marketing that they have to do because
they want to spur growth, and pricing is not necessarily
the you know, the only lever that they have.
Speaker 2 (22:30):
To But you know, I think about Campbell's and other
packaged foods companies and how much competition they must face
from private label products. I go to the supermarket, I'm
going to get the check and brought that's cheapest, and
it's usually the ones sold by the supermarket and not
Campbell's or anyone else's. So that's I mean. And for
private label, you don't need to do any marketing exactly.
So what is there how do they counter that? Well,
(22:52):
more marketing.
Speaker 7 (22:53):
They're trying to work with the with the retailers to
position themselves in the best part of the shell to
be able to move their product. Yeah, well, obviously retailers
have to contend with increasing their private label penetration. At
the same time have a good relationship with this national brand,
so they're not necessarily want them to go against you know,
(23:17):
this product. So they're trying to there's some negotiations happening
and usually you know, when I speak to retailers, because
I do cover Canadian retailers. They mentioned that they try
to expand their private label into white spaces not necessarily
served by national brands, So you're while your minds might
see some you know, condensed soup private label, it's not
(23:39):
as as intricate or better quality than probably Campbell's.
Speaker 1 (23:44):
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 Busin this app.
You can also watch us live every weekday on YouTube
and always on the Bloomberg terminal
Bloomberg Audio Studios, podcasts, radio news. 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 2 (00:23):
Through President Trump has now opened the door to Nvidia
selling some of its high end chips to China.
Speaker 3 (00:30):
Yeah, I'm not sure. I kind of can't follow the policies.
Some days the door's open, some days it's closed.
Speaker 2 (00:35):
Yeah, and it could always move in the other that's
the other risk.
Speaker 4 (00:38):
Right.
Speaker 2 (00:38):
Let's bring in Bloomberg Tech co host Caroline Hide to
tell us a little bit more so on b Tech.
I'm sure you're going to be talking all about this,
but Caroline, what does it mean that Nvidia can now
sell these h two hundred chips to China? Because that
is not the most advanced chips.
Speaker 1 (00:52):
Is it.
Speaker 5 (00:52):
It's not.
Speaker 4 (00:53):
It's based on Grace Hopper architecture, which isn't the Blackwell
that we're currently in. It isn't the Vera Rubin that
we're looking towards. It's the pre V's iterations. It is
ten x superior to the ah twenties that remember cast
Your Mind Back had also been deemed okay to ship
from the United States to China if a fifteen percent
cut was given to the US government, but that was
(01:14):
never signed into law. They were never able to execute
on that. And most importantly, China doesn't want them. And
I think this is the key the financial times of
reporting that basically already China's looking at putting curves licenses,
basically limiting the ability for certain companies to access the
H two hundreds even if Invidia is allowed to ship them.
And I think this is what everyone's got to currently digest.
(01:35):
I'm hearing time and time again from some of the
most powerful people in the technology space that we are
underestimating how sophisticated China is at using the Invidia chips,
the small amount they already have and some of those
homegrown ones.
Speaker 3 (01:47):
Typically, how has this trade policy negotiated? Who typically says
US tech company, you can sell this into China or
to other markets, or you can't. Is because it just
seems like it's now the whim of the present in
his ex account or truth social account setting trade policies
at how's it typically done well?
Speaker 4 (02:06):
Isn't it interesting that just last week Jensen Wang was
meeting with a president, but was meeting with some of
the leaders over in Congress. Most crucially, he was with
the Senate Banking Committee, because it's the Banking Committee oddly
that tends to be in charge of export restrictions, and
so it was that group of leaders. But many are frustrated,
and I was just at the Reagan Defense Forum National
(02:27):
Defense Forum this weekend, and there is handwringing going on
from Congress that they're being cut out of a lot
of these discussions. Really they should have ownership of to
how much trade should be allowed, But at the moment
these are coming through executive orders. And we know that
the President likes to cut a deal and Vidia, Jensen
Wang likes to cut a deal. They have a very
personal relationship. And most broadly, in Vidia and Jensen want
access to China. They think there's something like a fifty
(02:49):
billion dollar total addressable market they're being forced to have
to put down. At the moment, he's has zero percent
revenue coming from that country. But you've got this tussel
at the top of the China Hawks, who were worried
from anal security perspective, if you allow technology to go
from the US into China.
Speaker 2 (03:04):
But on the flip side.
Speaker 4 (03:05):
In Jenson Wrong would say, they're just going to build
it themselves, and we're forcing them to speed up that
by limiting my technology. Let our stack own that of
China's big large language model development.
Speaker 2 (03:17):
So you had mentioned that China didn't want to buy
the H twenty chips. Does China want to buy the
H two hundred chips?
Speaker 4 (03:22):
I think if you asked, what the reporting shows is
that if you turn to an Ali.
Speaker 5 (03:27):
Barbar or a Tensen or a by Do, they are.
Speaker 4 (03:29):
Limited by the amount of GPUs they have access to.
So I think more is more from their perspective. And yes,
the H two hundreds build on the H twenties, but
longer term, the government wants to focus on domestic supply here.
That's why you're seeing camera con do so well, while
you're seeing Huawei do well, while you're hearing Bido wants
to spin off its chip manufacturer. While we just had
that superb entrance to the market just of the Moore's
(03:50):
technology company that has shot up more than four hundred percent,
they do want to make it homegrown.
Speaker 5 (03:56):
Great store on a Bloomberg terurnal.
Speaker 3 (03:58):
Today, Apple shares have sorted thirty five percent since the
end of the gym as the market scrutiny of AI development
spending has made the company's lack of an AI strategy
a strength.
Speaker 2 (04:08):
So do nothing and benefit.
Speaker 5 (04:10):
I don't know, but I mean Apple.
Speaker 3 (04:12):
We always say about Apple they don't have to be first,
and tim that they are not first, but when they
do come into the market, they do it really well.
It's a thought out approach and that people, you know,
the Apple bullsmen saying, don't worry, don't worry, don't worry.
Speaker 5 (04:24):
They're going to be fine.
Speaker 3 (04:25):
There's two billion Apple devices out there, they'll be fine.
Speaker 5 (04:28):
I don't know.
Speaker 4 (04:28):
Yeah, And meanwhile, goodbye to the guy who is in
charge of AI policy over at Apple. Because of that
botched Apple intelligence roll up, people have been frustrated that
Apple seems to be a slow player to adoption, but
longer term, most in the generative AI space thinking that
we are going to be using this from a consumer perspective,
from our edge devices. Therefore, computer is going to change
(04:50):
in the way in which you know it. Your models
are going to change in the way in which you
know it, and eventually we will be doing running our
Chatchpt or our Gemini or whatever model you like on
your device. Eventually that means you'll need an Android or
an Apple or maybe some future AI device that hasn't
yet been created and is probably being developed in the
minds of the great leaders right now. But we'll have
to see how Apple continues to basically do the benefit
(05:13):
of not having got a load of debt and not
having spent an awful lot of money on the buildout,
because at the moment the come I think investors are
just still grappling with the sheer scale of capital expenditure
that's going into this and wondering whether there's going to
be a real upside. Can Apple get the upside without
making the infrastructure investment.
Speaker 5 (05:31):
Stay with us more from Bloomberg Intelligence coming up after this.
Speaker 1 (05:37):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am. He's Dene on Apple Coarclay, and
Android Auto with the Bloomberg Business app. Listen on demand
wherever you get your podcasts, or watch us live on YouTube.
Speaker 3 (05:52):
Our next guest one of the most highly respected media
analysts on Wall Street for a long time, and I
think the value that I really find from her res
or it's consistently over the years, is she's not afraid
to be out of consensus here. And I think she's
got a again, a non consensus call here that even
if you don't agree with it, it makes you think. And
that's the value of a good animals. Laura Martin joins
(06:12):
his senior analysts that need them company, Laura, as it
relates to Netflix, do you think they should even pursue
this deal here?
Speaker 6 (06:21):
Yeah, So we published a note this morning say no
that the big cultural Warner Brothers would create cultural problems
at Netflix. Netflix has about fourteen thousand employees and Warner
Brothers is about thirty five thousand, some of which they
wouldn't be buying, but it would be about twice as
many employees from let's call it the old world, the
fifty year old studio who really is averse to make
(06:44):
taking risks and they really do things the old fashioned
way and siloed, competitive, internally fighting culture. And that isn't Netflix.
Netflix is sort of single purpose disruptor. Everybody on the
same page, move fast and break things, iterate if you
get it wrong. And I just feel like the culture
(07:04):
that Warner Brothers is an anchor would be an anchor
to Netflix and a time when jenerative AI technology risks
are collapsing timeframes into weeks with the changes. So we
think the next disruption created by jeneritive AI requires really
fast reaction times, which Netflix has the fastest in media,
(07:25):
and it would really slow their reaction times if they
suddenly brought on twice as many employees that were stuck
in the fifty year old business model of the Hollywood studio.
Speaker 2 (07:34):
And you quantified the drag that this would have on Netflix,
what does that look like?
Speaker 7 (07:42):
So?
Speaker 6 (07:42):
I mean, I think what we're saying is that the
eighty three billion dollar purchase price that they would pay
to buy Warner Brothers would add another that cash would
be at risk of not returning its capital because would
bring all these cultural problems and envelop the entire consolidated
(08:04):
four hundred billion dollar entity.
Speaker 3 (08:07):
Lars, So, as it related to jen ai, is that
a friend or a foe to Hollywood, to the media companies?
Speaker 6 (08:16):
Yeah? So to date, Paul, what isn't different about jen
ai is it's being used as tools by humans, in
which case it's not different than the web. It's not
different than our smartphones our you know, our Apple phones
are you know, flashlights and communication devices and map they
replace Thomas Guides, so their utility.
Speaker 8 (08:36):
So so far.
Speaker 6 (08:37):
Jenai technology has been a tool or a utility for
human beings. I think the vision of Sam Altman at
open Ai, Elon Musk, Mark Zuckerberg over at Meta is
to have and certainly of course of Navidia is to
have to achieve what's called superintelligence, where machines trained machines,
(08:59):
and case it replaces people at some level. It does better, thinking, faster,
it's less emotional. So if that comes true and they're
saying that's ten years out, that's superintelligence, it would actually
replace humans. But in near term it's just like the
other three technological disruptions you and I've seen where it
makes our life better. It's a tool for humans to
do faster, better, safer work.
Speaker 2 (09:21):
So, Laura, you make the case that Netflix doesn't need
to buy Warner Brothers Discovery. It would be adding an
anchor and it would drag it down because it's this disruptor.
What about paramount skuidance? Doesn't that argument also apply or
does it not?
Speaker 6 (09:36):
It does, But the distinction I would make is Netflix
is large enough to go it alone, and with generative
AI collapsing timeframes, their culture is really well suited to
the technological you know, the future of the next five years.
Peace Guy is subscale. It probably can't survive without bulking up,
(09:59):
and it doesn't really have time to build in a
generative world because it's just too small and change is
happening too fast, so it needs to bulk up and
buy in something. We think they could get it closed
in six months because we think the senior Ellison is
good friends with Donald Trump and he would have it
sale through regulatory so it would happen faster, there'd be
(10:22):
less uncertainty, and it would allow peace Guy to survive.
So I think they have to take the technological risk
because they must have scale.
Speaker 2 (10:31):
Or they're going to die.
Speaker 6 (10:32):
So they might die because I'm right about the culture
problem and the anchor problem, but they're going to die
if they don't buy something anyway, so it gives them
a better chance to survive. I think to buy Warner.
Speaker 3 (10:43):
And Laurie you follow on Netflix, since it's inception here.
This is a company and a management team and a
board that's been pretty adamant.
Speaker 5 (10:49):
They don't they'd rather build from within than buy.
Speaker 3 (10:52):
What do you think is changed here, because this is
a huge turnaround for this company strategic wise.
Speaker 6 (10:58):
Yeah, Paul, you know, we really wanted to write a
note that says dogma is bad. I mean, they said
they'd never do advertising. They do advertising. They said we'll
never do live sports, and now they've broadcast NFL games
on Christmas Day. And then they said, well, we don't
like the Hollywood, we don't like the theatrical window, and
we don't want to release any films in the theatrical
(11:19):
window unless talent like directors force us because they want
Academy Award consideration, which is a turn which is a requirement.
To get an Academy Award, you have to have been
released in theaters. So that is really hurting them in
this In this those words are really hurting them with
the talent community. So when they say we will never
(11:39):
do something, please take that with a grain of salt
because they often reverse themselves completely one hundred and eighty degrees,
and it's really those words about the theatrical window are
really hurting their hurting the feedback loops with talent like
big talent like Jim Cameron and Scarce. Like all these
people that really are big talent, they all want a
theatre window and Netflix. They're scared to death that if
(12:03):
Netflix bought Warners, the theatrical window over five years would
go to zero.
Speaker 5 (12:08):
Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1 (12:15):
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 2 (12:29):
All right, let's move on here and talk a little
bit about Home Depot. Home Depot, of course did come
out with earnings a while ago, but they are giving
a bigger long term outlook here for its business. It's
an investor day kind of outlook. And for that we
have Matthew Griffin, He's a Bloomberg Stocks reporter, to just
talk us through some of the issues at Home Depot's face.
Because at the last earning support, Home Depot made clear
(12:52):
that the expected rebound in demand that it was looking
for had not yet materialized. Is the tone changing here
from Home Depot?
Speaker 8 (13:00):
Well, Scarlett I would say the tone really hasn't changed
in a meaningful way. Everyone's trying to make sense of
the economic moment that we're in. I mean, you were
just talking about economic data that we got this morning
that had some puts and takes in it when you
look at job openings versus layoffs, and I would say that,
like pretty much any economically sensitive company right now, Home
(13:25):
Depot is facing some puts in takes as well. So
they gave an outlook for comparable sales next year. They
are preliminary views. They'll be flat to up two percent.
That's lower than what Wall Street was looking for. But
then they also gave this market recovery scenario where there's
(13:45):
a bit more of a rebound in the US housing market,
more demand for home improvement, and in that scenario, comparable
sales would beat estimates at up four percent to five percent.
You know, you zoom out and you've got a picture
where mortgage rates have come down, but consumers are still
under pressure. Housing prices are still high, and so are
rates you know historically, and so you've got the consumer
(14:11):
trying to muddle through, companies trying to make sense of it,
and investors trying to make sense of it. You've got
the stock down a little bit pre market and now
just about flat on.
Speaker 3 (14:18):
The day, four hundred and seventy thousand employees at home Depot.
That is amazing, But I don't think I could gave
a job there because I really don't know a hammer
from a screwdrive.
Speaker 2 (14:26):
Okay, so back up a little bit, because Paul's goal
is to become a greeter at Walmart down the road. Like,
that's what he that's his dream job.
Speaker 5 (14:32):
That's the final career.
Speaker 2 (14:35):
Path, final destination.
Speaker 3 (14:37):
So what are they saying about just the consumer behavior
these days?
Speaker 5 (14:41):
I mean, interest rates are still high.
Speaker 3 (14:43):
Are people still working on their homes, you know, the professional.
Speaker 5 (14:48):
Versus the private?
Speaker 3 (14:50):
What's going on with their core customer?
Speaker 8 (14:52):
Yes, So we can actually look back to a few
weeks ago when they reported earnings and actually cut their
profit outlook for this year. What we saw in was
a continuation of trends at the company, which is you
have flagging demand for some of the bigger ticket home remodels. Again,
(15:14):
because there's pressure on consumers, people are not taking on
big projects, projects that require financing. At the same time,
they are shifting maybe into projects like gardening, smaller projects.
So it's not that people don't want to do anything.
It's that people are maybe the doing the home remodeling
equivalent of trading down here, which is a trend that
(15:36):
we've seen in other corners of the economy. For example,
Walmart's business holding up. You know, if you want that
greater job, it might be open for you because consumers
are trading down. That's good for Walmart's business, it's good
for a segment of Home depots business, but not enough
to support the overall outlook so far. And if you
look at these slides from their analyst today, they see
(16:02):
pressures continuing, including high home prices, and that's weighing on
consumers here.
Speaker 2 (16:07):
Yeah, the affordability crisis strikes again. So, Matthew, I'm looking
at Loads shares, which are of course a competitor to
Home Depot down at the moment as Home Depot's basically unchanged.
Do we presume that these same headwinds that are dogging
Home Depot are the same that kind of our clouding
the outlook for our LOWS or does Loads have a
different approach?
Speaker 8 (16:28):
Interestingly, you know, they both serve similar corners of the
market home improvement. So far, it does seem like LOWS
has fared a little bit better this year, at least
with how investors have viewed the way they've been managing
through their shares currently down about two percent on the year,
compared to down ten percent for Home Depot. If you
(16:50):
look at that reaction today, it's possible investors are thinking
there could be some of the same headwinds in their future.
But again, it do us seem like they've gotten a
little bit more of a pass so far.
Speaker 3 (17:03):
I about tariffs here, What's what are the companies saying
about tariffs and their ability to deal with them?
Speaker 8 (17:08):
So so far, the companies in their commentary have really
focused on the state of the consumer rather than directly
talking or at least talking constantly about tariffs. I would
say though, that Home Depot did call out high building
material costs as a reason that consumers are deferring home
(17:32):
improvement projects, So you know, you do think about tariffs
on lumber things like that. That doesn't help that side
of the equation.
Speaker 5 (17:40):
Stay with us. More from Bloomberg Intelligence coming up after this.
Speaker 1 (17:48):
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 that's just live on YouTube.
Speaker 2 (18:02):
We want to talk about Campbell's. The company came out
with its fiscal first quarter earnings. Both the top line
and the bottom line beat analy assessments, but the direction
of travel for revenue profit is still lower. Let's bring
in Diana Rosera, pennacious Bloomberg Intelligence consumer staples analysts on
the latest on Campbell's and of course the package foods
industry overall. So Campbell's has two businesses, the snacks business
(18:25):
and the meals and beverages portfolio. How are the two
businesses doing, Diana, Well, they are just.
Speaker 7 (18:30):
Put some takes on both of them. You know, for
meals and beverages, there's some headwinds on ready to serve soup,
whereas broth and condensed soup, which is usually used in cooking,
is improving. You know, you have V eight, which is
not really it's a brand that is not really doing
that well so.
Speaker 5 (18:51):
Well to me. To me, that's like my healthy eating
for the day. Drink a little one in the morning.
Speaker 2 (18:56):
When you're on the plane, You'll get a VA and
you're like, I'm.
Speaker 5 (18:58):
Good, I'm good, I'm good. That's WoT. No need to
go to the gym on exactly.
Speaker 7 (19:02):
So, but it's still facing some headwinds for snacks. It's
it's kind of I found out odd because there seems
to be a bifurcation of the consumer trends here. You
have salty snacks being you know, challenged by people trying
to eat healthier, reducing their sodium, but then you have
(19:24):
cookies outperforming. So I guess it's the salad with the fries.
Speaker 2 (19:28):
All right, which I love.
Speaker 5 (19:30):
By the way, Yes, yeah, absolutely.
Speaker 3 (19:32):
Campbell Wills agreed to take a forty nine percent stake
in Lot Regina. What is law Regina? What's Campbell's trying
to do here?
Speaker 7 (19:38):
Yeah, so that is the supplier for REOs, which they
bought it a year or so ago, and that it
makes it kind of like have a little bit more
control on the supply side. There has been some headwinds
on this brand because tomatoes are being exported or imported
to the United States, so they have to face some tariffs.
(20:01):
So you know, with this they're trying to not only
offset tyres, but have a little bit more on the
supply chain, have a little bit more control on that.
Speaker 5 (20:09):
Here's my Rao story.
Speaker 3 (20:10):
I mean it's for people to arn't in New York City.
It's a very famous restaurant in New York. It's very
difficult to get a table there, to get a reservation.
On my thirty years of Wall Street, I've asked people
to take me. Who I know go there to take me.
I haven't gone once. Really, Yeah, I mean it is impossible.
Like I never asked people to take me out on
their great golf course. I just wait for the invite
to come.
Speaker 5 (20:30):
But for REOs, I've actively tried to get.
Speaker 2 (20:33):
And haven't gotten. Anyone who has to invite into Rao's,
let possibly know. You know, I did actually get to
eat there. We ordered take out during the pandemic when
they take out. Yeah, so that was my one time
I got to.
Speaker 5 (20:44):
Eat Rare very good.
Speaker 2 (20:45):
But Diana, I want to ask you about, of course,
the controversy that surrounded Campbell's. Just last month, there was
an executive he was a vice president of the IT
department who talked about how the company's products are being
made for poor people and you know, had some disparaging
remarks about some of the employees, the Indian employees. Is
(21:06):
that something that's going to cast a pall over Campbell's
I mean, do you see any long term effects from that?
Speaker 7 (21:11):
Well, usually they did not address that during the call,
but I think it's it might be a short term
headwind if there's any boycott happening. I don't I'm not
necessary I don't necessarily think that there's going to be one.
It's just one executive, and the company went ahead and
kind of tried to put on record that they're not
(21:32):
necessarily agreeing with what he said. So it's you know it,
I don't necessarily see that as a significant headwind for
the company.
Speaker 3 (21:41):
Package good companies, I kind of think of them kind
of a GDP top line growth story at best. What's
the twenty twenty six out lot for your companies? Are
what are investors looking for?
Speaker 7 (21:52):
So for twenty six, they're hoping that there's some light
at the end of the tunnel in terms of volume growth. Again,
it might be a second half of the year story
because comps get a lot easier going forward, but you know,
profitability seems to be a little bit more difficult because
they have tariffs, they have to contend costs steal are
(22:15):
a little bit higher. Specific specifically on the employee side,
and there's also marketing that they have to do because
they want to spur growth, and pricing is not necessarily
the you know, the only lever that they have.
Speaker 2 (22:30):
To But you know, I think about Campbell's and other
packaged foods companies and how much competition they must face
from private label products. I go to the supermarket, I'm
going to get the check and brought that's cheapest, and
it's usually the ones sold by the supermarket and not
Campbell's or anyone else's. So that's I mean. And for
private label, you don't need to do any marketing exactly.
So what is there how do they counter that? Well,
(22:52):
more marketing.
Speaker 7 (22:53):
They're trying to work with the with the retailers to
position themselves in the best part of the shell to
be able to move their product. Yeah, well, obviously retailers
have to contend with increasing their private label penetration. At
the same time have a good relationship with this national brand,
so they're not necessarily want them to go against you know,
(23:17):
this product. So they're trying to there's some negotiations happening
and usually you know, when I speak to retailers, because
I do cover Canadian retailers. They mentioned that they try
to expand their private label into white spaces not necessarily
served by national brands, So you're while your minds might
see some you know, condensed soup private label, it's not
(23:39):
as as intricate or better quality than probably Campbell's.
Speaker 1 (23:44):
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 Busin this app.
You can also watch us live every weekday on YouTube
and always on the Bloomberg terminal
Popular Podcasts
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
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.
The Brothers Ortiz
The Brothers Ortiz is the story of two brothers–both successful, but in very different ways. Gabe Ortiz becomes a third-highest ranking officer in all of Texas while his younger brother Larry climbs the ranks in Puro Tango Blast, a notorious Texas Prison gang. Gabe doesn’t know all the details of his brother’s nefarious dealings, and he’s made a point not to ask, to protect their relationship. But when Larry is murdered during a home invasion in a rented beach house, Gabe has no choice but to look into what happened that night. To solve Larry’s murder, Gabe, and the whole Ortiz family, must ask each other tough questions.