April 4, 2025 • 22 mins
Bloomberg’s Caroline Hyde discusses why one of Wall Street’s most bearish Tesla analysts has further reduced estimates for the company’s earnings. Plus, Gil Luria, managing director of D.A. Davidson explains what levers Apple could use to cope with tariffs. And MikMak CEO Rachel Tipograph joins to talk about why advertisers are sticking with TikTok, as the deadline for the company to sell its US assets looms.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:34):
Live from New York. I'm Caroline Hyde, and this is
Bloomberg Technology. Tariffs They hit global tech stocks again today
as China retaliates and imposes tariffs on all American imports
and withholds crucial rare earths. Two trillion dollars wiped off
the naspat one hundred and two days alone. That's as
the benchmark is set to enter a bear market. Investors
(00:55):
now expecting the Federal Reserve to cut interest rates four
times this year. We will hear the Fed chair Jerome
Power later this hour, but we've got to dive into
the NAZA one hundreds Move round, VLAs Selica is here extraordinary.
We haven't seen this sort of sell off since twenty twenty.
Speaker 3 (01:11):
Absolutely, the scale of the weakness has been pretty breath taking,
the size of the drops, just the broad based nature
of the selloff, it's been pretty pretty remarkable.
Speaker 2 (01:22):
What's also remarkable is how much we start to see
the ongoing retaliation, whether it be from countries such as
China and the impact that we'll have on being able
to make technology products here in the United States. But
individual companies later will be shining a light on Nintendo
reports that they're going to be delaying, they're switched to
pre orders to the US all of this Is it
(01:42):
yet priced in? Ryan? What are analysts telling you?
Speaker 3 (01:46):
Well, what I've heard so far is that there's just
so much uncertainty out there that few people are really
willing to jump in right now. I mean, some people
remain positive on a longer term basis. They say, if
you have a three to five year time horizon, maybe
you can take advantage of some of the drops in
some of these names. But we don't really know what
to expect. I mean, yesterday things were really bad. They're
even worse today. We had China retaliate. Is there going
(02:09):
to be a response to that, some kind of back
and forth. We just don't know, And that makes it
extremely difficult for companies to know how to plan, and
that makes it extremely difficult for investors to know how
to position.
Speaker 2 (02:20):
And at the moment, just where in particular are the
pain most acute. It's hardware rather than software, but software
still in the eye the storm, if indeed the EU
decides to respond from a digital services tax perspective.
Speaker 3 (02:35):
Yeah, absolutely. So far, we saw a little bit of
relative outperformance in software. Especially yesterday, some people were telling
me maybe this is too much, too fast for software
because they're not as directly exposed to tariffs as other
part of the market. But certainly hardware, like you mentioned,
very much getting hit with this. It's extremely you know,
there's a lot of manufacturing exposure to China, to Vietnam,
(02:56):
to places that really got hit with tariffs. This place
is really suffering.
Speaker 1 (03:00):
You know.
Speaker 3 (03:01):
Over the past couple of days, particular chips have really
come in quite a bit. There's still, like I said,
a lot of uncertainty. People were already concerned about what
is the outlook for AI spending. People were already talking
about valuations maybe being elevated. All of these things are
just dovetailing, and it's just you have a lot of
reasons to be selling right now and very few reasons
to be buying.
Speaker 2 (03:20):
Worst case scenario is the lead quote in your story
coming from a particular investment in the CIO of Granite
Bay Wealth Management. Do we think there's a movement back
from this worst case scenario. There have been many calling
for the fact that Apple might get some sort of
exclusion from the taris longer term on many bracing for
just headline risks going forward.
Speaker 3 (03:43):
I think there's a lot of bracing for headline risks.
There's been a lot of hope that Apple would get
an exemption the way it did in the first Trump administration.
But this is a very different kind of trade, where
a very different tear of policies than we saw in
the first administration. So there's not really much of a
playbook that you can use here in the same way.
You know, you might have thought, well, it wasn't that bad,
you know, eight years ago or whatever that was. It's
(04:03):
looking like a lot more severe right now, and that
again just makes it harder for people to know how
to allocate, how to position if they should be bracing
for more short term pain, if this looks like a
long term buying opportunity. There's just so many questions right now.
It's hard to know really what to do. That's what
people are telling me.
Speaker 2 (04:19):
Get back to the phones, I'm sure, and the email.
Ryan La Seleka, thank you so much for spending time
with US. Now, let's turn to individual stocks. Tesla, for example,
trading lower unsurprisingly. In fact, it's down fifteen percent in
the last two days following tariff news. It's own deliveries missed. Interestingly,
JP Morgan want to shine a light on their perspective.
They've cut their estimates further on the stock, quoting what
(04:39):
they see is unprecedented brand damage. Nimberg's Cretudell joins us
for more and we'd been deciding whether this was production issues,
whether this was the lack of a new model, But
for JP Morgan this is brand damage.
Speaker 4 (04:53):
Yeah, and I do think it's both right. But of
course JP Morgan is one of the more bearish analysts
or bearish brokers on the street. They have very much
sort of leaned into this idea that this is more
than just the model why changeover which you know, we
we should note is a significant issue in the first quarter,
and it remains to be seen just how much, you know,
(05:15):
Tesla can sort of overcome any brand damage that that
you know is an issue here, but it is, you know,
hard to sort of think of of an equivalent moment
for a car brand where you see people you know
throwing paint onto showrooms and lighting cars on fire. This
is just you know, very unusual for any product, but
(05:37):
particularly for cars, where you know, this is the second
most valuable thing that people buy right after their home.
So you know, to to you know, buy a Tesla
now means something a lot different than it did, you know,
only months ago. And you know, there are real questions
about just how much sort of lasting impact musks, you know,
(05:57):
entry into politics is going to have on this brand
you site.
Speaker 2 (06:01):
Of course, JP Morgan being one of the more bearish
on the street and they've got a price target just
one hundred and twenty. But you go to the more optimistic,
the bullish on the street. Dan ives the Webbush five
hundred and fifty dollars price target on Tesla, even he
is saying the recent report the delivery is one a
disaster on every metric. Is there any of you that
Elon must potentially starting to ease out of what the
(06:23):
White House in his day to day roles as has
been reported. Of course they push back against that, but
whether or not he will come back to the fold.
We focus on Tesla and that being an optimistic.
Speaker 4 (06:31):
Light, I think if we listen to what Musk is saying,
and what even you know jd Vance has said, I
just you know, have a hard time sort of seeing
you know, Elon sort of heading to the back seat,
if you will. That's not very much his nature, right
He has has very much, you know, sort of gotten
in deep with this administration. You know, just in the
(06:55):
last few days he was pictured with a you know Trump,
you know, everything said was right had I maybe you know,
getting the verbiage a little off, but he is very
much you know, behind the president and you know sort
of one and the same with this administration. And even
if he does, you know, take a step back officially,
(07:15):
I think, you know, it's it's hard to sort of
fathom how he could really sort of separate himself after
he's thrown himself in so emphatically the last you know,
six months.
Speaker 2 (07:26):
Tre Cretudell, he's been following this for six months and
then some we thank you. The market onslaught. It continues
for other names. Let's look at Apple, their market cat
slipping now below three trillion dollars. Let's get to a
key analyst on the stock Apple, Gil Luria Da Davidson,
managing director joining us. Now you look at so many names,
and I'm excited to talk to you about all of them, Gil,
(07:46):
But let's just focus in on Apple at the moment
and what extent is being priced in the supply chain
uphending and indeed the tariff impact. Will they get some
sort of exclusion?
Speaker 5 (07:57):
Do you think less likely now that they'll get an
exclusion than last time? I think that commentary is probably correct.
The market is doing its best to assess the impact
on Apple. It's right now. It's just doing the rough math.
A third of the revenue being impacted, about a third
(08:18):
tariffs higher one time's another the stock is down about
ten to fifteen percent. That's as good as the market
can do right now. We're going to have a few
days and weeks to refine that math as we see
how this plays out. But the structural change to the
United States role in the global economy has already happened now,
(08:41):
and every day and week that we proceed in this direction,
it's going to be cemented as a different world order,
and therefore we have to get better at doing the
math about how that impacts companies like Apple, but also
a lot of other technology and other companies.
Speaker 2 (09:00):
There are so many headlines coming out minute by minute,
gil and one of them, we understand President Trump is
saying that Vietnam wants to cut their taris down to zero. Now,
Vietnam has become a relatively new hub for Apple. How
are they able to in this moment where the news
can change from day to day, able to stomach the
higher costs because they have a healthy margin of about
(09:22):
forty six to forty nine percent.
Speaker 5 (09:26):
That's right. So Apple has a few levers. One it
can push cost increases to its suppliers, Two, it can
pass through price increases to its consumers. And then three
it can absorb some of the of the margin degradation.
So it has all three levers. In the short term,
it's going to use all of those. But to your point,
(09:48):
in the medium to long term, it has the ability
to shift production. It's already started shifting production from China
to India and Vietnam, who are far likely to arrive
at beneficial agreement with the United States about tariffs and
trade than China is. So the fact that Apple's already
manufacturing in Indian Vietnam gives them medium term and definitely
(10:12):
longer term flexibility to offset some of the tariff increases
and reduce the impact on prices and margins.
Speaker 2 (10:20):
GIL that's the hardware perspective, and I can understand why
an in Nvidia that you also look at is feeling
the pain on a hardware perspective and getting products out
of Asia. Meta under significant pressure. Why is that more
about the EU response mechanism.
Speaker 5 (10:37):
That's part of it. Part of it is that in
an economic recession, there's less advertising dollars, which will mean
less digital advertising, which is really all of Meta's business.
So that's part of the reaction. Part of the reaction
is Europeans have a habit of drawing funds out of
(10:58):
our large technology companies through non tariff barriers. So they'll
decide that Meta isn't doing a good job, good enough
job on privacy, so they'll limit Meta. They'll find them
billions of dollars. They've done the same to Google, They've
done the same to Apple, and so the more we
get in conflict with Europe, that's a lot of the
(11:18):
lever that the Europeans have. It's not just tariffs on goods,
it's the Europeans inclination to put in regulation that restricts
these companies and allows the Europeans to find them billions
of dollars.
Speaker 2 (11:33):
Talking of levers, President Trump thinks he's got a level
when it comes to TikTok and China tariffs. Just you
cover Oracle in any capacity, do you want to see
Oracle become a minority holder of future shares in a
US TikTok If indeed that deal that seems to be
being discussed with the White House goes.
Speaker 5 (11:50):
Through, somebody's going to get a windfall from this. The
TikTok us business is incredibly valuable, and to the extent
we can accomplish the national security goal of not allowing
our data to be sent to the Communist Party in China,
that business is incredibly valuable, and whoever gets to participate
in it is going to get a windfall. It looks
(12:12):
like Oracle may be in the running to do that,
but everybody else is running for that too. It's incredibly
valuable because if you think about it, there's only really
three venues for social media where you can access consumers.
Google's YouTube, Meta's properties, and by Dance's TikTok And whoever
owns TikTok in the US will have a very valuable
(12:34):
asset and to extend. Oracle can expand its business. Already
has a TikTok business in hosting. If it can expand
more into an operations role with TikTok, that would be
a windfall to Oracle.
Speaker 2 (12:47):
There's going to be some people winning in certain circumstances.
Gilia of DA Davison, We thank you for your real expertise.
Let's just go to more breaking headlines right now. Because
President Trump is indeed speaking, we understand that he says
it's perfect time for Chair of the Fed Powell to
cut interest rates. Remember we're hearing from Fed chairman in
but ten fifteen minutes time. He is speaking at an
(13:10):
event in Arlington, Virginia among other journalists, and we understand
that Trump is saying that Powell is always late, but
this is the perfect time for Power to cut interest rates.
The market currently factors in four interest rates cuts for
this year. Let's take a look at some other companies
that are being moved around via tarras. Nintendo, for example,
check in on its usadrs. The stock as you see,
(13:30):
falling currently three point three percent intra day. There are
reports out there that the company is set to delay
it's US pre orders of the Nintendo switch to because
of TARIS, the product launch date is still set to
remain on June fifth. Coming up, Vice president j d
Vance says a deal for TikTok will come out before
the deadline for its potential ban. That deadline is tomorrow.
(13:53):
We'll discuss that next. This is Bluemog Technology breaking news
in response to the market termol news on Klana. The
company is said to be delaying its planned IPO after
the implementation of Trump's TARIS. That's all, according to the
(14:16):
Wall Street Journal, will bring you any more breaking news
on Klana and it's planned in IPO, but as we
understand from the Wall Street Journal, it's pausing its planned
for initial public offering. Meanwhile, Saturday is the deadline for
byte Dance to find a buyer for its US TikTok
holding or be banned. President Trump and Vice President jad
Vance have both signaled that a deal is within reach.
(14:37):
Plumo's Kirk Wagner joins us for more and maybe a
deal even before Saturday the fifth.
Speaker 6 (14:44):
I would be surprised if we don't have something before Saturday.
It's either going to be an announcement of a deal
or a proposed deal. I should say, because again, this
requires buy and from the Chinese government and buy Dance,
which I don't believe we have yet, or an extension
to continue discussing deal, right, but we know that this
week the Trump administration was meeting to talk about a
(15:04):
specific deal that involves Oracle Blackstone and a handful of
other investors. I think we're really circling around something that
looks like that, and I expect we'll have something before
midnight Eastern tonight, which, as you pointed out, is when
this band is supposed to kick in. If they don't
do something, the deal.
Speaker 2 (15:20):
Is all very well and good, depending on who's agreed
on it. And I suppose that the US investors might
be aligned. But do we understand if Byte Dance and
the Chinese government might be aligned, considering they've just unfailed
or further taris in response to the US ones.
Speaker 6 (15:34):
Yeah, that time mean is not necessarily a strong sign
that everyone is working together here. We have not heard
from Bye Dance, We have not heard from the Chinese government.
My understanding is that the US side of this equation
is working to propose something that then they hope will
be accepted on the other side of the fence there.
But as you point out, we're in the middle of
(15:55):
this global trade war right now, particularly with China, and
so Trump has suggested, well, hey, maybe the tariffs come
into you know, our a negotiating bargaining ship in this
whole thing. But it is a complicated situation because of
what you just mentioned.
Speaker 2 (16:10):
And what's also complicated is what happens to the algorithm
and what oversight Oracle and indeed US investors ultimately have
and whether that's in line with a letter of the law.
Twenty twenty four law passed well, didn't have much way
in which the algorithm could be kept in Chinese hands.
Speaker 6 (16:26):
That's right. So by the letter of the law, the
Chinese tech company, by Dance or the Chinese government should
have essentially zero influence or control over this algorithm. The
deal that has been proposed seems to suggest that that
they would, and so the deal that is being discussed
may not follow the law. Now, the question is is
(16:47):
there someone who's going to challenge President Trump on that?
Speaker 5 (16:50):
Right?
Speaker 6 (16:50):
If he just simply says this is acceptable to me,
We're going to do it. Is Congress going to step
in and say, hey, look, you know this doesn't follow
the law we're going to challenge you or are they
going to let slide? And I don't know the answer
to that, but I think you bring up the stickiest
point in this whole thing, which is the actual control
over this key technology. Both sides want it, and I'm
not sure how they're going to rectify that.
Speaker 2 (17:12):
Most Kurt Wagner, staying on top of a very timely conversation,
we thank you. Let's focus now in on what advertisers
marketers do in this moment. Do they go to TikTok
or not. Rachel Typograph is with uspanra SEO of Mike
mag You have the data and since January nineteenth, which
was the first deadline when we were worried it was
going to be banned and it went black for a moment,
traffic has recovered to TikTok.
Speaker 7 (17:34):
Right absolutely so January nineteenth, I was here with you.
We saw TikTok traffic go to zero. It took about
until March first for TikTok traffic for major advertisers to
reach Q four levels. Why there was a lot of
confusion if it was still legal to advertise on TikTok
and if you've been following TikTok did a lot of
(17:55):
advertising themselves to communicate this is a safe place for
you to advertise are and we're now seeing TikTok traffics
surpass Q four levels. So Mickmac tracks twenty three hundred
of the biggest brands in the world, and our traffic
on TikTok right now is twenty percent higher than Q
four levels.
Speaker 2 (18:14):
That's pretty phenomenal considering the level of uncertainty going into
this Saturday. Is the likelihood that people are pairing back
just into this one off event.
Speaker 7 (18:23):
We haven't seen that yet. And the reality is TikTok
is a very unique asset. It's why we have the
US and China fighting over it. You can build brand
and drive conversion all at once. So until US advertisers
here that they shouldn't be advertising on that platform, I
believe that they will continue to do so. That being said,
they all have contingency plans. They have contingency plans for tariffs,
(18:46):
and now they have contingency plans for advertising. And what
we saw around January nineteenth is how easy it is
to move dollars from one platform to another.
Speaker 2 (18:55):
Why did it go, why did it shift?
Speaker 7 (18:56):
Who benefited so the two big beneficiaries were Alphabet. So
Alphabet is paid search, YouTube dB three sixty and Pinterest.
In both of those platforms you can drive conversion and
brands consider it a brand safe environment.
Speaker 2 (19:12):
Is that why they're not going to Meta? Why did
Instagram not become the automatic place you put yet more
advertising dollars? There's everyone already there.
Speaker 7 (19:19):
So the interesting thing about Meta is it is the gorilla.
It's the giant. On any given day at mcmacket's our
number one source of traffic and it remains to be.
So that being said, when we compare Q one to
Q four meta traffic, we've seen a three percent decline.
And when we look at the timing of this, it's
all around Zuckerberg's announcement of removing fact checking from the platform.
(19:40):
So it goes back to many of the things that
brands are balancing right now, and one of them is
concerns around brand safety.
Speaker 2 (19:46):
That's really interesting and I'm wondering Therefore, also at this moment,
we're seeing MetaStock under pressure significantly because people are worried
the advertiser is going to pair back because of economic uncertainty,
let alone brand certainty and safety is that something you
preparing a cell phone.
Speaker 7 (20:01):
Absolutely, I mean this is a whole other curve ball.
This isn't about TikTok or Meta or the trade desk.
This is about terrariffs and consumer goods. And the reality
is consumer good companies are in a really tough spot.
Their margins are getting squeezed, and they really only have
three options. Raise prices, which retailers and consumers don't want that.
(20:23):
The second is reduced supply chain, so essentially produce fewer SKUs.
I can tell you advertisers are not going to want that.
Why what creates advertising revenue to rise auction gensity? You
need more SKUs. And then finally, the worst thing, which
is what I think the markets are reacting to, is
removing working media spent altogether. And I can tell you,
(20:43):
if you're a student of brand the way that I am,
if you stop investing in brand, you will lose market share.
And every CMO and CFO across the world right now
is having this conversation what.
Speaker 2 (20:56):
About tarris going back to TikTok though, in thirty seconds,
if TikTok isn't bought by the oracle contingent and we
don't see the algorithm come to us hands. Do people
stick with it?
Speaker 7 (21:09):
I think that you're going to start to see dollars
shift very quickly then, and they'll shift into platforms like
alphabet and Pinterest.
Speaker 2 (21:17):
Always great having makepacs data Rachel Tipograph, I joyed to
have you on. Thank you. Look, we've got more breaking
news and response to the tariffs. This one is stub
Hub's IPO. We understand according to the Wall Street Journal
that stub hub has also delayed its plans for initial
public offering. Remember there's likes of stub hub or we're
in potentially coming to the market. We also have Klana
(21:37):
delaying according to the Wall Street Journal, the ripple effects
being felt far and wide. Coming up, we're going to
be hearing from the fedschede your own power in the
midst of this market uncertainty following widespread tariffs reaction from China.
That's next, and this is Bloomberg Technology
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:34):
Live from New York. I'm Caroline Hyde, and this is
Bloomberg Technology. Tariffs They hit global tech stocks again today
as China retaliates and imposes tariffs on all American imports
and withholds crucial rare earths. Two trillion dollars wiped off
the naspat one hundred and two days alone. That's as
the benchmark is set to enter a bear market. Investors
(00:55):
now expecting the Federal Reserve to cut interest rates four
times this year. We will hear the Fed chair Jerome
Power later this hour, but we've got to dive into
the NAZA one hundreds Move round, VLAs Selica is here extraordinary.
We haven't seen this sort of sell off since twenty twenty.
Speaker 3 (01:11):
Absolutely, the scale of the weakness has been pretty breath taking,
the size of the drops, just the broad based nature
of the selloff, it's been pretty pretty remarkable.
Speaker 2 (01:22):
What's also remarkable is how much we start to see
the ongoing retaliation, whether it be from countries such as
China and the impact that we'll have on being able
to make technology products here in the United States. But
individual companies later will be shining a light on Nintendo
reports that they're going to be delaying, they're switched to
pre orders to the US all of this Is it
(01:42):
yet priced in? Ryan? What are analysts telling you?
Speaker 3 (01:46):
Well, what I've heard so far is that there's just
so much uncertainty out there that few people are really
willing to jump in right now. I mean, some people
remain positive on a longer term basis. They say, if
you have a three to five year time horizon, maybe
you can take advantage of some of the drops in
some of these names. But we don't really know what
to expect. I mean, yesterday things were really bad. They're
even worse today. We had China retaliate. Is there going
(02:09):
to be a response to that, some kind of back
and forth. We just don't know, And that makes it
extremely difficult for companies to know how to plan, and
that makes it extremely difficult for investors to know how
to position.
Speaker 2 (02:20):
And at the moment, just where in particular are the
pain most acute. It's hardware rather than software, but software
still in the eye the storm, if indeed the EU
decides to respond from a digital services tax perspective.
Speaker 3 (02:35):
Yeah, absolutely. So far, we saw a little bit of
relative outperformance in software. Especially yesterday, some people were telling
me maybe this is too much, too fast for software
because they're not as directly exposed to tariffs as other
part of the market. But certainly hardware, like you mentioned,
very much getting hit with this. It's extremely you know,
there's a lot of manufacturing exposure to China, to Vietnam,
(02:56):
to places that really got hit with tariffs. This place
is really suffering.
Speaker 1 (03:00):
You know.
Speaker 3 (03:01):
Over the past couple of days, particular chips have really
come in quite a bit. There's still, like I said,
a lot of uncertainty. People were already concerned about what
is the outlook for AI spending. People were already talking
about valuations maybe being elevated. All of these things are
just dovetailing, and it's just you have a lot of
reasons to be selling right now and very few reasons
to be buying.
Speaker 2 (03:20):
Worst case scenario is the lead quote in your story
coming from a particular investment in the CIO of Granite
Bay Wealth Management. Do we think there's a movement back
from this worst case scenario. There have been many calling
for the fact that Apple might get some sort of
exclusion from the taris longer term on many bracing for
just headline risks going forward.
Speaker 3 (03:43):
I think there's a lot of bracing for headline risks.
There's been a lot of hope that Apple would get
an exemption the way it did in the first Trump administration.
But this is a very different kind of trade, where
a very different tear of policies than we saw in
the first administration. So there's not really much of a
playbook that you can use here in the same way.
You know, you might have thought, well, it wasn't that bad,
you know, eight years ago or whatever that was. It's
(04:03):
looking like a lot more severe right now, and that
again just makes it harder for people to know how
to allocate, how to position if they should be bracing
for more short term pain, if this looks like a
long term buying opportunity. There's just so many questions right now.
It's hard to know really what to do. That's what
people are telling me.
Speaker 2 (04:19):
Get back to the phones, I'm sure, and the email.
Ryan La Seleka, thank you so much for spending time
with US. Now, let's turn to individual stocks. Tesla, for example,
trading lower unsurprisingly. In fact, it's down fifteen percent in
the last two days following tariff news. It's own deliveries missed. Interestingly,
JP Morgan want to shine a light on their perspective.
They've cut their estimates further on the stock, quoting what
(04:39):
they see is unprecedented brand damage. Nimberg's Cretudell joins us
for more and we'd been deciding whether this was production issues,
whether this was the lack of a new model, But
for JP Morgan this is brand damage.
Speaker 4 (04:53):
Yeah, and I do think it's both right. But of
course JP Morgan is one of the more bearish analysts
or bearish brokers on the street. They have very much
sort of leaned into this idea that this is more
than just the model why changeover which you know, we
we should note is a significant issue in the first quarter,
and it remains to be seen just how much, you know,
(05:15):
Tesla can sort of overcome any brand damage that that
you know is an issue here, but it is, you know,
hard to sort of think of of an equivalent moment
for a car brand where you see people you know
throwing paint onto showrooms and lighting cars on fire. This
is just you know, very unusual for any product, but
(05:37):
particularly for cars, where you know, this is the second
most valuable thing that people buy right after their home.
So you know, to to you know, buy a Tesla
now means something a lot different than it did, you know,
only months ago. And you know, there are real questions
about just how much sort of lasting impact musks, you know,
(05:57):
entry into politics is going to have on this brand
you site.
Speaker 2 (06:01):
Of course, JP Morgan being one of the more bearish
on the street and they've got a price target just
one hundred and twenty. But you go to the more optimistic,
the bullish on the street. Dan ives the Webbush five
hundred and fifty dollars price target on Tesla, even he
is saying the recent report the delivery is one a
disaster on every metric. Is there any of you that
Elon must potentially starting to ease out of what the
(06:23):
White House in his day to day roles as has
been reported. Of course they push back against that, but
whether or not he will come back to the fold.
We focus on Tesla and that being an optimistic.
Speaker 4 (06:31):
Light, I think if we listen to what Musk is saying,
and what even you know jd Vance has said, I
just you know, have a hard time sort of seeing
you know, Elon sort of heading to the back seat,
if you will. That's not very much his nature, right
He has has very much, you know, sort of gotten
in deep with this administration. You know, just in the
(06:55):
last few days he was pictured with a you know Trump,
you know, everything said was right had I maybe you know,
getting the verbiage a little off, but he is very
much you know, behind the president and you know sort
of one and the same with this administration. And even
if he does, you know, take a step back officially,
(07:15):
I think, you know, it's it's hard to sort of
fathom how he could really sort of separate himself after
he's thrown himself in so emphatically the last you know,
six months.
Speaker 2 (07:26):
Tre Cretudell, he's been following this for six months and
then some we thank you. The market onslaught. It continues
for other names. Let's look at Apple, their market cat
slipping now below three trillion dollars. Let's get to a
key analyst on the stock Apple, Gil Luria Da Davidson,
managing director joining us. Now you look at so many names,
and I'm excited to talk to you about all of them, Gil,
(07:46):
But let's just focus in on Apple at the moment
and what extent is being priced in the supply chain
uphending and indeed the tariff impact. Will they get some
sort of exclusion?
Speaker 5 (07:57):
Do you think less likely now that they'll get an
exclusion than last time? I think that commentary is probably correct.
The market is doing its best to assess the impact
on Apple. It's right now. It's just doing the rough math.
A third of the revenue being impacted, about a third
(08:18):
tariffs higher one time's another the stock is down about
ten to fifteen percent. That's as good as the market
can do right now. We're going to have a few
days and weeks to refine that math as we see
how this plays out. But the structural change to the
United States role in the global economy has already happened now,
(08:41):
and every day and week that we proceed in this direction,
it's going to be cemented as a different world order,
and therefore we have to get better at doing the
math about how that impacts companies like Apple, but also
a lot of other technology and other companies.
Speaker 2 (09:00):
There are so many headlines coming out minute by minute,
gil and one of them, we understand President Trump is
saying that Vietnam wants to cut their taris down to zero. Now,
Vietnam has become a relatively new hub for Apple. How
are they able to in this moment where the news
can change from day to day, able to stomach the
higher costs because they have a healthy margin of about
(09:22):
forty six to forty nine percent.
Speaker 5 (09:26):
That's right. So Apple has a few levers. One it
can push cost increases to its suppliers, Two, it can
pass through price increases to its consumers. And then three
it can absorb some of the of the margin degradation.
So it has all three levers. In the short term,
it's going to use all of those. But to your point,
(09:48):
in the medium to long term, it has the ability
to shift production. It's already started shifting production from China
to India and Vietnam, who are far likely to arrive
at beneficial agreement with the United States about tariffs and
trade than China is. So the fact that Apple's already
manufacturing in Indian Vietnam gives them medium term and definitely
(10:12):
longer term flexibility to offset some of the tariff increases
and reduce the impact on prices and margins.
Speaker 2 (10:20):
GIL that's the hardware perspective, and I can understand why
an in Nvidia that you also look at is feeling
the pain on a hardware perspective and getting products out
of Asia. Meta under significant pressure. Why is that more
about the EU response mechanism.
Speaker 5 (10:37):
That's part of it. Part of it is that in
an economic recession, there's less advertising dollars, which will mean
less digital advertising, which is really all of Meta's business.
So that's part of the reaction. Part of the reaction
is Europeans have a habit of drawing funds out of
(10:58):
our large technology companies through non tariff barriers. So they'll
decide that Meta isn't doing a good job, good enough
job on privacy, so they'll limit Meta. They'll find them
billions of dollars. They've done the same to Google, They've
done the same to Apple, and so the more we
get in conflict with Europe, that's a lot of the
(11:18):
lever that the Europeans have. It's not just tariffs on goods,
it's the Europeans inclination to put in regulation that restricts
these companies and allows the Europeans to find them billions
of dollars.
Speaker 2 (11:33):
Talking of levers, President Trump thinks he's got a level
when it comes to TikTok and China tariffs. Just you
cover Oracle in any capacity, do you want to see
Oracle become a minority holder of future shares in a
US TikTok If indeed that deal that seems to be
being discussed with the White House goes.
Speaker 5 (11:50):
Through, somebody's going to get a windfall from this. The
TikTok us business is incredibly valuable, and to the extent
we can accomplish the national security goal of not allowing
our data to be sent to the Communist Party in China,
that business is incredibly valuable, and whoever gets to participate
in it is going to get a windfall. It looks
(12:12):
like Oracle may be in the running to do that,
but everybody else is running for that too. It's incredibly
valuable because if you think about it, there's only really
three venues for social media where you can access consumers.
Google's YouTube, Meta's properties, and by Dance's TikTok And whoever
owns TikTok in the US will have a very valuable
(12:34):
asset and to extend. Oracle can expand its business. Already
has a TikTok business in hosting. If it can expand
more into an operations role with TikTok, that would be
a windfall to Oracle.
Speaker 2 (12:47):
There's going to be some people winning in certain circumstances.
Gilia of DA Davison, We thank you for your real expertise.
Let's just go to more breaking headlines right now. Because
President Trump is indeed speaking, we understand that he says
it's perfect time for Chair of the Fed Powell to
cut interest rates. Remember we're hearing from Fed chairman in
but ten fifteen minutes time. He is speaking at an
(13:10):
event in Arlington, Virginia among other journalists, and we understand
that Trump is saying that Powell is always late, but
this is the perfect time for Power to cut interest rates.
The market currently factors in four interest rates cuts for
this year. Let's take a look at some other companies
that are being moved around via tarras. Nintendo, for example,
check in on its usadrs. The stock as you see,
(13:30):
falling currently three point three percent intra day. There are
reports out there that the company is set to delay
it's US pre orders of the Nintendo switch to because
of TARIS, the product launch date is still set to
remain on June fifth. Coming up, Vice president j d
Vance says a deal for TikTok will come out before
the deadline for its potential ban. That deadline is tomorrow.
(13:53):
We'll discuss that next. This is Bluemog Technology breaking news
in response to the market termol news on Klana. The
company is said to be delaying its planned IPO after
the implementation of Trump's TARIS. That's all, according to the
(14:16):
Wall Street Journal, will bring you any more breaking news
on Klana and it's planned in IPO, but as we
understand from the Wall Street Journal, it's pausing its planned
for initial public offering. Meanwhile, Saturday is the deadline for
byte Dance to find a buyer for its US TikTok
holding or be banned. President Trump and Vice President jad
Vance have both signaled that a deal is within reach.
(14:37):
Plumo's Kirk Wagner joins us for more and maybe a
deal even before Saturday the fifth.
Speaker 6 (14:44):
I would be surprised if we don't have something before Saturday.
It's either going to be an announcement of a deal
or a proposed deal. I should say, because again, this
requires buy and from the Chinese government and buy Dance,
which I don't believe we have yet, or an extension
to continue discussing deal, right, but we know that this
week the Trump administration was meeting to talk about a
(15:04):
specific deal that involves Oracle Blackstone and a handful of
other investors. I think we're really circling around something that
looks like that, and I expect we'll have something before
midnight Eastern tonight, which, as you pointed out, is when
this band is supposed to kick in. If they don't
do something, the deal.
Speaker 2 (15:20):
Is all very well and good, depending on who's agreed
on it. And I suppose that the US investors might
be aligned. But do we understand if Byte Dance and
the Chinese government might be aligned, considering they've just unfailed
or further taris in response to the US ones.
Speaker 6 (15:34):
Yeah, that time mean is not necessarily a strong sign
that everyone is working together here. We have not heard
from Bye Dance, We have not heard from the Chinese government.
My understanding is that the US side of this equation
is working to propose something that then they hope will
be accepted on the other side of the fence there.
But as you point out, we're in the middle of
(15:55):
this global trade war right now, particularly with China, and
so Trump has suggested, well, hey, maybe the tariffs come
into you know, our a negotiating bargaining ship in this
whole thing. But it is a complicated situation because of
what you just mentioned.
Speaker 2 (16:10):
And what's also complicated is what happens to the algorithm
and what oversight Oracle and indeed US investors ultimately have
and whether that's in line with a letter of the law.
Twenty twenty four law passed well, didn't have much way
in which the algorithm could be kept in Chinese hands.
Speaker 6 (16:26):
That's right. So by the letter of the law, the
Chinese tech company, by Dance or the Chinese government should
have essentially zero influence or control over this algorithm. The
deal that has been proposed seems to suggest that that
they would, and so the deal that is being discussed
may not follow the law. Now, the question is is
(16:47):
there someone who's going to challenge President Trump on that?
Speaker 5 (16:50):
Right?
Speaker 6 (16:50):
If he just simply says this is acceptable to me,
We're going to do it. Is Congress going to step
in and say, hey, look, you know this doesn't follow
the law we're going to challenge you or are they
going to let slide? And I don't know the answer
to that, but I think you bring up the stickiest
point in this whole thing, which is the actual control
over this key technology. Both sides want it, and I'm
not sure how they're going to rectify that.
Speaker 2 (17:12):
Most Kurt Wagner, staying on top of a very timely conversation,
we thank you. Let's focus now in on what advertisers
marketers do in this moment. Do they go to TikTok
or not. Rachel Typograph is with uspanra SEO of Mike
mag You have the data and since January nineteenth, which
was the first deadline when we were worried it was
going to be banned and it went black for a moment,
traffic has recovered to TikTok.
Speaker 7 (17:34):
Right absolutely so January nineteenth, I was here with you.
We saw TikTok traffic go to zero. It took about
until March first for TikTok traffic for major advertisers to
reach Q four levels. Why there was a lot of
confusion if it was still legal to advertise on TikTok
and if you've been following TikTok did a lot of
(17:55):
advertising themselves to communicate this is a safe place for
you to advertise are and we're now seeing TikTok traffics
surpass Q four levels. So Mickmac tracks twenty three hundred
of the biggest brands in the world, and our traffic
on TikTok right now is twenty percent higher than Q
four levels.
Speaker 2 (18:14):
That's pretty phenomenal considering the level of uncertainty going into
this Saturday. Is the likelihood that people are pairing back
just into this one off event.
Speaker 7 (18:23):
We haven't seen that yet. And the reality is TikTok
is a very unique asset. It's why we have the
US and China fighting over it. You can build brand
and drive conversion all at once. So until US advertisers
here that they shouldn't be advertising on that platform, I
believe that they will continue to do so. That being said,
they all have contingency plans. They have contingency plans for tariffs,
(18:46):
and now they have contingency plans for advertising. And what
we saw around January nineteenth is how easy it is
to move dollars from one platform to another.
Speaker 2 (18:55):
Why did it go, why did it shift?
Speaker 7 (18:56):
Who benefited so the two big beneficiaries were Alphabet. So
Alphabet is paid search, YouTube dB three sixty and Pinterest.
In both of those platforms you can drive conversion and
brands consider it a brand safe environment.
Speaker 2 (19:12):
Is that why they're not going to Meta? Why did
Instagram not become the automatic place you put yet more
advertising dollars? There's everyone already there.
Speaker 7 (19:19):
So the interesting thing about Meta is it is the gorilla.
It's the giant. On any given day at mcmacket's our
number one source of traffic and it remains to be.
So that being said, when we compare Q one to
Q four meta traffic, we've seen a three percent decline.
And when we look at the timing of this, it's
all around Zuckerberg's announcement of removing fact checking from the platform.
(19:40):
So it goes back to many of the things that
brands are balancing right now, and one of them is
concerns around brand safety.
Speaker 2 (19:46):
That's really interesting and I'm wondering Therefore, also at this moment,
we're seeing MetaStock under pressure significantly because people are worried
the advertiser is going to pair back because of economic uncertainty,
let alone brand certainty and safety is that something you
preparing a cell phone.
Speaker 7 (20:01):
Absolutely, I mean this is a whole other curve ball.
This isn't about TikTok or Meta or the trade desk.
This is about terrariffs and consumer goods. And the reality
is consumer good companies are in a really tough spot.
Their margins are getting squeezed, and they really only have
three options. Raise prices, which retailers and consumers don't want that.
(20:23):
The second is reduced supply chain, so essentially produce fewer SKUs.
I can tell you advertisers are not going to want that.
Why what creates advertising revenue to rise auction gensity? You
need more SKUs. And then finally, the worst thing, which
is what I think the markets are reacting to, is
removing working media spent altogether. And I can tell you,
(20:43):
if you're a student of brand the way that I am,
if you stop investing in brand, you will lose market share.
And every CMO and CFO across the world right now
is having this conversation what.
Speaker 2 (20:56):
About tarris going back to TikTok though, in thirty seconds,
if TikTok isn't bought by the oracle contingent and we
don't see the algorithm come to us hands. Do people
stick with it?
Speaker 7 (21:09):
I think that you're going to start to see dollars
shift very quickly then, and they'll shift into platforms like
alphabet and Pinterest.
Speaker 2 (21:17):
Always great having makepacs data Rachel Tipograph, I joyed to
have you on. Thank you. Look, we've got more breaking
news and response to the tariffs. This one is stub
Hub's IPO. We understand according to the Wall Street Journal
that stub hub has also delayed its plans for initial
public offering. Remember there's likes of stub hub or we're
in potentially coming to the market. We also have Klana
(21:37):
delaying according to the Wall Street Journal, the ripple effects
being felt far and wide. Coming up, we're going to
be hearing from the fedschede your own power in the
midst of this market uncertainty following widespread tariffs reaction from China.
That's next, and this is Bloomberg Technology
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