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13:55
PDT

Morgan and Morgan plans to spend $700 million on advertising next year.

Morgan and Morgan John Morgan Wall Street Philadelphia New York Chicago Los Angeles Citadel Bloomberg AI The United States

– The firm sees a large growth opportunity in states where it currently has no presence.

– Acquisition costs are high, with a break-even timeline of about three years.

– Concerns exist about the quality of services as private equity enters the legal market.

– Potential future changes in ownership laws could dramatically increase firm valuations.

legal sector competitionadvertising costspotential ownership changes

▸ Full transcript

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Analysis

Morgan and Morgan's aggressive advertising strategy, with a projected budget of $700 million, highlights the competitive landscape in the legal sector, particularly against private equity-backed firms. The firm sees significant growth potential in untapped markets, despite the challenges of high client acquisition costs and the lengthy timeline to profitability.

The ongoing 'gold rush' among law firms exploring new business models raises concerns about sustainability and quality. Morgan's perspective on the potential for non-lawyer ownership suggests a transformative shift in the industry, which could significantly increase the firm's valuation if realized.

13:53
PDT

Morgan and Morgan is in talks with J.P. Morgan regarding a minority stake and potential IPO.

Morgan and Morgan John Morgan J.P. Morgan Citadel Bloomberg New York Los Angeles PRIVATE

– The firm plans to spend $700 million on advertising next year to maintain market share.

– Morgan believes there is substantial growth potential in untapped markets.

– Private equity interest in the legal sector is rising due to attractive margins.

– Morgan is cautious about the influx of new competitors in the legal space.

legal sector growthprivate equity interestadvertising spend

▸ Full transcript

10 billion, that's huge for a law firm. Fees 10 billion is what I would take; that's what I would, you know, that would be. Yeah, is what you, because I got, see, the other thing that we've done. I've got the core, which is very strong, but what is still to be determined is really America. I haven't tapped hard into New York yet, Chicago just went into Los Angeles of all of California, Philadelphia, those numbers have not turned yet. But I've been there for so long, three, four, five years, that I know it's going to be good because I got the cases. Part of my conversation with a billionaire lawyer, John Morgan, of course the founder of Morgan and Morgan, now seeking to, I guess, figure out what the next phase is for that company. You can catch that full interview online on Bloomberg.com slash videos. Meanwhile, some breaking news, this involving Citadel. This involving a second quarter performance and no surprise, a huge trading haul in that period. $7.3 billion of trading revenue for the second quarter, that's more than triple what it had from the same period a year ago, that red headline just now, crossing the wire. You can read that story on the Bloomberg terminal. We'll be back in a moment.

Analysis

Morgan and Morgan's founder, John Morgan, indicated that the firm is exploring options for a minority stake and potentially an IPO, with discussions ongoing with J.P. Morgan. The firm is investing heavily in advertising to maintain its competitive edge against private equity firms entering the legal sector, with a projected ad budget of $700 million for the next year.

Smart money should note that Morgan's firm has not fully penetrated key markets like New York and Chicago, suggesting significant growth potential. Additionally, the legal sector's appeal to private equity due to its high margins could lead to increased competition and valuation pressures for firms in this space.

13:51
PDT

Morgan & Morgan is in talks for a minority stake sale and IPO.

Morgan & Morgan John Morgan J.P. Morgan MSO Wall Street GC=F

– Private equity is increasingly interested in legal services due to high margins.

– Morgan warns of the risks in the current rush among law firms to innovate.

– Potential future ownership changes could significantly increase firm valuation.

– Current market valuations for law firms are much lower than potential future valuations.

legal services investmentprivate equity interestfirm valuation potential

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And then you pay the MSO for your call center, for the things that are not legal. So it's all new, but I will tell you this, and the thing I worry about, and we all should worry about it, is right now hundreds of law firms are exploring this. There's a gold rush. The one thing, I didn't take science and math in college because I wasn't good in science and math, but I did study history and political science. So one thing we know about the gold rush in the 1800s is most of the gold was fool's gold. And so what I got to be really worried about in this gold rush right now is that I'm actually looking for gold, but not ending up with fool's gold. So I'm very circumspect about what I'm doing. I don't have to do anything. The lucky thing for us is flat and normal is great. Look, one day, probably not in my lifetime, but one day, non-lawyers will be able to own. And look, if that ever happened, what the value to my firm is astronomical. If you use Wall Street PEs, my firm could be worth $20 to $22 billion if you use Wall Street PEs. Well, people that are selling their firms now, they're getting a three, four, maybe a five X.

Analysis

John Morgan's law firm, Morgan & Morgan, is exploring a potential minority stake sale and IPO, with discussions ongoing with J.P. Morgan. The firm is positioned to capitalize on the growing interest from private equity in legal services, which are seen as high-margin and relatively stable compared to other sectors.

Morgan expresses caution about the current 'gold rush' among law firms, emphasizing the risk of pursuing ventures that may not yield real value. He notes that if non-lawyers were allowed to own law firms, the valuation of his firm could skyrocket, potentially reaching $20 to $22 billion based on Wall Street multiples, contrasting with current sales yielding only 3-5x returns.

13:49
PDT

Morgan & Morgan has invested $140 million in expansion efforts.

Morgan & Morgan John Morgan J.P. Morgan Bloomberg PE New York Wall Street Warren Buffett PRIVATE DXY

– Profitability in new markets like Philadelphia and New York is emerging but slow.

– Private equity interest in legal services could compress margins.

– Morgan believes quality may decline with private equity involvement.

– The firm's advertising budget is projected at $700 million for the next year.

private equity interestadvertising costslegal sector competition

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You spend a lot of money just to ramp up; you don't start breaking even for three years because you have the cost of advertising and your people. The delay again takes about three years to cross the Rubicon. So in my expansion, I'm probably in it for like a hundred and forty million dollars. Some of them are starting to turn; some of them, you know, Philadelphia was profitable last year, New York is going to be profitable this year, but it's a long, slow slog until you get there. That has to be, I would think, top of mind because, as you know, if you do, whether you sell to a private equity firm, a stake in a private equity firm, or to the public, the demands of Wall Street are obviously to compress those costs and to provide some sort of reliability of what that profitability will be going forward. You've had the luxury of not having to deal with Wall Street for all these years. And listen, one thing we know, I don't know if I'm going to offend people on Bloomberg when I say that, not Bloomberg, but what we know is a lot of times when private equity comes in, quality goes down. Now what we believe that that's our advantage is when these PE people come in, they can't keep spending as much as they did on advertising because they have to service debt. They may have to, you know, they're not going to have the founder there. You know, when Warren Buffett buys businesses, he keeps the founder there. So the founders are not necessarily in these rollups. So we also see that as an advantage to us.

Analysis

John Morgan discussed the significant costs associated with expanding his law firm, Morgan & Morgan, indicating an investment of around $140 million with a long path to profitability. He highlighted the competitive landscape with private equity firms entering the legal sector, which may pressure advertising budgets and overall quality of service.

Smart money should note that while Morgan's firm has a strong brand and national presence, the entry of private equity could disrupt traditional operational models, potentially impacting margins and service quality. The firm's reliance on substantial advertising spend to maintain growth could also pose risks if profitability pressures mount from external investors.

13:47
PDT

Morgan & Morgan's ad budget is $700 million, indicating aggressive growth strategy.

John Morgan Morgan & Morgan J.P. Morgan Wall Street

– The firm operates in all 50 states, presenting significant expansion opportunities.

– Private equity is increasingly interested in the legal sector due to high margins.

– Morgan emphasizes the importance of brand and technology in legal services.

– There are still many cities in the U.S. where the firm is not yet present.

legal sector growthprivate equity interestadvertising strategy

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What are they actually buying into here? Is it the actual law firm? Is it the brand? You can't buy law firms. Well, I understand that. We'll get to that. I understand that. But I mean the idea of sort of what the law practice is and obviously abided those contingency fees. Is this about the technology that's wrapped around this? Is it just about the personal branding of John Morgan and Morgan? It's about this: we're the only firm in America that's in all 50 states. And that's hard. You know, our ad budget for next year is $700 million. That's a lot. That's a lot. And it is private, you know. Is that what you need to keep a business like this going? You have to spend that? Well, yeah, because now what's happened, there's a lot of private, there's a lot of Wall Street money in here competing against me now. So yeah, we have to do that and we spend our big office to, it monitors all this is out in Brooklyn. But yeah, that's to keep the cases flowing the way we want. That's to keep increasing. But here's the thing, we have a lot of states that we're not in. The ramp for growth here is gigantic because there are cities in America that we're not in yet. How much does it cost to sort of, I guess, get a new client? I mean, that's a lot of money. That's basically almost what, like a quarter of your revenue more or less, right? Or maybe even a little more than that. Yeah. Yeah, I mean, that's a lot. Well, that's a quarter of yes.

Analysis

John Morgan of Morgan & Morgan discussed the firm's significant advertising budget of $700 million, necessary to compete against increasing private equity interest in the legal sector. He highlighted the firm's unique position as the only law firm operating in all 50 states, indicating substantial growth potential in untapped markets.

The legal industry is attracting private equity due to its high margins, and Morgan's strategy to maintain a robust advertising presence suggests a focus on brand strength and market penetration. This could signal a shift in how legal services are valued and funded, potentially leading to increased competition and innovation in the sector.

13:45
PDT

Morgan & Morgan is exploring a minority stake sale or IPO.

John Morgan Morgan & Morgan J.P. Morgan IPO AI Wall Street Bloomberg Law PRIVATE DXY

– Private equity is increasingly interested in the legal sector.

– Legal services are viewed as AI-proof businesses.

– High margins in legal practices attract investor attention.

– Morgan's discussions with J.P. Morgan are ongoing.

private equity interestlegal sector investmentIPO potential

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Most of our viewers make their money charging fees to other people for their skill level, and they would probably bristle at the idea that their success is all luck. But your point is taken, and I kind of want to link that to Wall Street because you've grown this firm to a behemoth, a couple billion dollars in revenue. A few months ago, Bloomberg Law reported that you were in talks with J.P. Morgan and other folks on Wall Street about raising money for a minority stake in the business and maybe potentially even an IPO. Can you give us an update on where those talks stand, assuming they're still happening? If we were having this conversation at five o'clock this afternoon, I'd be better equipped to tell you because when I leave here, I'm going down the street to J.P. Morgan to hear what they're thinking and what they're talking about. So I'm going to have my very first sit down after they've taken my numbers to market. But look, we're in an age right now where private equity is always looking for everything, whether it's air conditioning or plumbing and dentistry. And all of a sudden, legal is a category that has great margins that they're very interested in. Well, even more so now, I mean, you mentioned some of those industries, almost none of them are sort of in that AI tech-related zeitgeist that I think a lot of these people are kind of a little bit afraid of. They're looking for the AI-proof businesses. I assume law and obviously the fees you collect from those practices falls into that category.

Analysis

John Morgan is in discussions with J.P. Morgan regarding a potential minority stake sale or IPO for his law firm, Morgan & Morgan, which has grown to a multi-billion dollar enterprise. The legal sector is attracting private equity interest due to its high margins, positioning it as an AI-proof business amidst a tech-driven market.

The ongoing talks with J.P. Morgan indicate a significant shift in how legal firms are perceived in the investment landscape, potentially opening doors for more capital influx into the sector. Smart money should note the growing trend of private equity seeking stable, high-margin industries, as this could lead to increased valuations and investment opportunities in legal services.

13:43
PDT

Morgan & Morgan is a multi-billion-dollar law firm operating in all 50 states.

John Morgan Morgan & Morgan ETFIQ In Asia Daybreak Europe Bloomberg Television PRIVATE DXY

– John Morgan's book, 'Life is Luck,' challenges the narrative of self-made success.

– The possibility of taking the firm public is being considered.

– Luck is a significant factor in business success, contrary to popular belief.

– The legal sector may experience volatility with potential public offerings.

legal sector IPOsbusiness narratives

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In Asia. We'll walk you through what you need to know to kickstart Europe's trading day. Live from our European headquarters, we bring you the day's top market-moving stories, unmatched expert analysis, and on-the-ground reporting from across the continent. Tune in to Daybreak Europe only on Bloomberg Television. Context changes everything. It's a multi-trillion dollar industry. We'll show you what's happening in ETFs like no one else. ETFIQ on Bloomberg. About 40 years ago, John Morgan and his partner started a law firm and began to build it up. About 20 years ago, he bought out those partners and really began to expand that business. It's called Morgan & Morgan, and it is now a multi-billion-dollar empire spanning all 50 states. He's also released a book about his life called Life is Luck. I had a chance to catch up with him. I asked him specifically about what comes next for his law firm and about the possibility of maybe taking a portion of that firm public. Let's take a listen. I do know this: very successful people do not like the title of my book, Life is Luck, because very successful people want to say, 'I did it on my own.' But when you really think about what happened, there is so much luck about it. There are eight and a half billion people in the world.

Analysis

John Morgan, founder of Morgan & Morgan, discusses the potential for taking a portion of his multi-billion-dollar law firm public, emphasizing the role of luck in his success. He highlights the challenges faced by successful individuals who often downplay the influence of luck in their achievements.

The conversation reveals a broader theme of how personal narratives shape business decisions, particularly in the context of public offerings. Investors should note the potential volatility in the legal sector as firms like Morgan & Morgan consider public listings amidst changing market dynamics.

13:38
PDT

Bain Capital is targeting thematic real estate investments.

Bain Capital Equinox Trader Joe's Lululemon Apple Asia Europe US FEDFUNDS GC=F

– Focus on sectors like open-air retail and leisure.

– Higher interest rates necessitate growth-driven strategies.

– Cap rates have reset, providing attractive entry points.

– Understanding tenant business models is crucial for success.

real estate investmentinterest ratesthematic investing

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Drop for higher for longer interest rates. And of course now we've got the Fed being tested a little bit, that's putting pressure on the long end of the curve. And so what we've been doing is really underwriting with a lens toward rates are going to stay elevated and you have to be able to drive growth in that environment. So your most recent fund or that fund three then, I mean give me a sense here because I mean you were targeting like mid to high teens returns on that. I mean how does sort of the five plus percentage points on a treasury bond affect though that math? Yeah, it was tough if you owned real estate. It's great for buying real estate. Now that the basis is reset, you can buy in at a cap rate that's repriced relative to that treasury. You're buying in at the 40th percentile of long-term valuation for commercial real estate. But what like an exit cap rate, are you underwriting that? It depends sector by sector. I'd say industry average exit caps these days are sort of in the sixes, something like that. And so you get bond-like yields with growth and convexity. And so are your assumptions that cap rates will fall over time? No, our assumptions are they're gonna hang roughly where they are, bounce around a little bit, but roughly stay the same. I do have to ask you about the digital side of this and the data centers, because that seems to be where the gold rush, or at least the perceived gold rush is. How deep are you in that? We have some exposure in Asia. We own the second largest data center platform in Europe. We have the fifth largest data center platform. We don't do a ton here in the US. What about on the power side? We do own a bunch of power land here in the US. And so I've aggregated power commitments that we can sell back to the developers. Is there a reason why you stayed away from that or is it just not your focus? I think the question is, what's your competitive edge in that strategy? And for everything we do, we want to be competitively advantaged and feed.

Analysis

Bain Capital is focusing on thematic investments in real estate, targeting sectors like open-air retail and leisure, while navigating a higher interest rate environment. The firm is adapting its strategy to ensure growth despite challenges such as oversupply and rising interest rates, emphasizing the importance of understanding tenant business models for long-term success.

The current market conditions present a unique opportunity for real estate investments, particularly as cap rates have reset to more attractive levels. Investors should note that while cap rates are expected to remain stable, the focus on sectors with strong demand drivers could yield significant returns in the evolving economic landscape.

13:36
PDT

Focus on thematic real estate investments like open-air retail and leisure.

Bain Capital Lululemon Apple Equinox Trader Joe's GFC AAPL

– Tenant growth strategies are critical for sustaining rent increases.

– The refinancing wall poses risks with many loans maturing in 2027-2030.

– Shortening loan durations may lead to increased distress in the sector.

– Understanding tenant business models is essential for asset selection.

commercial real estateinterest ratestenant growth strategies

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care spas and health care and day care, where you have Lululemon and Apple stores and just a much better tendency that's drawing traffic and creating sticky revenue. But on that point, though, I mean, how much sort of, I mean, obviously I've assumed a big part of this model is that those rents go up over time, but at some point, I mean, how much can you extract out of those names? I would assume they have to also, you have to have faith that they can grow, those businesses can grow in order to be able to afford that otherwise you face the same situation of those tax repairs and other people you see. For sure. And so I think as you select assets that you know understanding your tendency the business model of those tenants and their growth strategies is really important you want a healthy inline tendency that's going to grow with you and tolerate rate bumps along the way in the commercial space I am curious about this this refinancing wall which I thought was supposed to come in 2024 then 2025 yes we're pretty much almost through 2026 is that just a thing of the past or is this just kind of we're just kicking the can down the road hiding the pain this is being swept under the rug somewhere Yeah, I think we've been kicking the can a little bit. You know, some of the lessons of the GFC blend extend pretend got played out through this cycle as real estate hit distress and people just kept kicking maturities. One of the challenges though is that duration has been shortening. You know, 10 years ago, it was a 10 year loan you'd get five years ago. It was a five year loan today. You can get a two year extension. And so we've been piling up these maturities on top of each other in 27 to 30 is really the bolus of maturities that hit this industry. And there's going to have to be some real working through of all that dead overhang. So give me a sense of what your house view is on interest rates because I've

Analysis

The discussion highlights a shift in commercial real estate investment strategies, focusing on thematic areas like open-air retail and leisure, driven by changing consumer behaviors. The refinancing wall is a concern, with many loans maturing in 2027 to 2030, indicating potential distress in the sector as interest rates remain elevated.

Investors should note the importance of tenant business models and growth strategies when selecting assets, as a healthy tenant base is crucial for sustaining rent increases. The ongoing trend of shortening loan durations suggests that the industry may face significant challenges in managing upcoming maturities, which could lead to a wave of distress if not addressed proactively.

13:34
PDT

Higher interest rates require a shift from traditional 'buy the dip' strategies in real estate.

Bain Capital Equinox Trader Joe's OI Trader Joe

– Investors should focus on growth areas rather than relying on rate reversion.

– Thematic investments linked to affluent consumer behavior are gaining traction.

– Oversupply in traditional office and multifamily sectors is a significant concern.

– Luxury and leisure real estate may offer better growth prospects.

real estate investmentinterest ratesconsumer behaviorluxury market

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I think that's a bit of a reflexive reaction born of history that, you know, 'buy the dip' is conventional wisdom in real estate. For the last 20 years, where you had a declining interest rate environment as a benign backdrop, that strategy worked fairly well. I think the problem is twofold: now we're in a world where you're in the higher-for-longer interest rate world. You can't rely on the rate reversion trade to make your commodity multifamily asset more valuable. You really have to grow in a lie. You have to deliver growth, and at the same time, we've got oversupply in the industry that's weighing against that in the office sector and places like that. Picking your spots where you can find growth and where you can build an OI is, I think, the secret to investing through this cycle. Well, let's talk about some of those areas that you picked because I was going through the portfolio. I mean, this reads like a country club membership. It's like golf clubs, marinas, open-air retail, but anchored by, like, you know, an Equinox or Trader Joe's—the fancy stuff. I mean, what is that a bet on? Is that just a bet on an absolute consumer? Is this kind of like the recession-proof model? What are you looking for? Yeah, I think everything we do is thematic in its origin, right? There has to be a long-term demand driver that sits behind it. Something that's changing in the way we live, work, play, shop, that's causing us to need that real estate more than we have in the past. Some of those thematics may be the K-shaped economy, the wealth of America growing. As people get wealthy, they consume different things. They buy private airplanes, they buy golf memberships, they buy luxury boats. That leads to private airplane hangars and golf courses and marinas being stimulated demand situations that will lead to better in a wide growth. I am very intrigued by open air.

Analysis

The discussion highlights a shift in real estate investment strategies, emphasizing the need for growth in a higher interest rate environment, contrasting with the historical 'buy the dip' approach. The focus is on thematic investments driven by changing consumer behaviors, particularly in luxury and leisure sectors, indicating a potential for growth despite oversupply in traditional markets.

Smart money should note the thematic approach to real estate, which targets long-term demand drivers like the K-shaped economy and affluent consumer trends. This strategy suggests that investments in luxury amenities and experiences may outperform traditional multifamily assets, which are currently under pressure from oversupply and rising interest rates.

13:31
PDT

Workday's Q2 results met expectations but revenue forecast for 2027 was slightly below estimates.

Workday Silver Lake Anil David Duffield Salesforce Bain Capital Ryan Cotton Jackson Hole Economic Symposium Tom Keen Lisa Abramowitz Michael McKee Kevin Worsh PRIVATE FEDFUNDS

– Investor concerns are heightened due to AI implications and headcount management.

– Interest from Silver Lake private equity indicates potential value in Workday.

– The sell-off in SaaS stocks may be exaggerated as fears of DIY software diminish.

– Workday's dual-class share structure may enable a management buyout to enhance AI strategy.

SaaS market dynamicsAI strategyprivate equity interestreal estate trends

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Into Downing Street. Bloomberg has you covered. Andy Burnham arriving. For all the context and clarity you need. A broad vision here from the new Prime Minister. Here at first on Bloomberg. This week, Bloomberg is live at the Jackson Hole Economic Symposium. Tom Keen and Lisa Abramowitz, along with Michael McKee, will bring you news and interviews with Fed leaders, policymakers, and economists shaping global monetary policy. Tune in for continuing coverage and a special episode of surveillance August 28th at 9 a.m., including full coverage of Kevin Worsh's first speech to the conference, the Jackson Hole Economic Symposium on Bloomberg. Context changes everything. All right. Many real estate investors gravitate to the four food groups of the industries of focus: residential real estate, offices in large cities, data centers, etc. Bain Capital, though, is choosing a different path, aiming to invest around future real estate trends through areas like open-air retail, leisure and hospitality, rentable town homes, marinas, and digital real estate. Ryan Cotton, well, he heads all that as the head of real estate over at Bain Capital. Ryan, great to have you here. Thanks for having me, Ron. I mean, you talk about this idea that we are in this commercial real estate cycle, a 55-month-long cycle.

Analysis

Workday's after-hours trading is under pressure following second-quarter results that were in line with estimates, but a subscription revenue forecast for 2027 fell slightly short of expectations. Concerns around AI impacts and headcount in a seat-based model have led to investor anxiety, despite a recent interest from Silver Lake private equity suggesting potential value in the company.

The sell-off in Workday and other SaaS stocks may be overdone, as fears of companies developing their own software solutions appear to be receding. The dual-class share structure at Workday could facilitate a management buyout, potentially accelerating their AI roadmap rather than following traditional private equity strategies focused on margin cuts.

13:29
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für ihr Portfolio, JP Morgan Europe Equity Premium in Come Active ETF. Wir sind der Home of Active ETFs. Starten Sie Ihre Suche nach JPE ETF…

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für ihr Portfolio, JP Morgan Europe Equity Premium in Come Active ETF. Wir sind der Home of Active ETFs. Starten Sie Ihre Suche nach JPE ETF. Wir sind wirklich erster. Und wenn du die Qualität dieser Geschäfts-Businessen schaust, wie großartig es ist, wie viel es sich verabschiedet, wie viele neue Störungen offen können, ist es einfach zu schief. At Shake Shack, sind es die operativen Änderungen, die du denkst, die du machen solltest, und die du daraus machen solltest? Ich denke, es sind nicht viele operativen Änderungen. Wenn du die besten Räste auf einem neuen Restaurantbild hast, dann macht es es leichter, mehr und mehr Restaurants zu verabschieden, als wenn du selbst bist oder ein Franchiseur hast. Also, die...

13:28
PDT

that's happening in application software, sees that it's overdone. And I think that there's a lot more certainty around what the future shap…

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that's happening in application software, sees that it's overdone. And I think that there's a lot more certainty around what the future shape of software looks like. Obviously there's concerns around pricing, around seed-based models, but I think the peak fears of DIY, that companies are just gonna vibe code their own versions of Salesforce or Workday, those are kind of in a rear view mirror. Then I think what happens here is with Workday, and maybe why they're engaged in discussions, don't forget there's a dual class share structure here. So, Anil and David Duffield still control the voting here. It's maybe a little bit of a potential MBO effort where to happen, where they can kind of accelerate the AI roadmap rather than your kind of traditional private equity playbook of let's go raise margins and gut investment. So, well, yeah, and that's a good point. But Anil though too, I remember earlier this year, I mean he was very blunt about it. And I was really struck by Benioff's comments yesterday, but I mean Anil said something to the fact there's no amount of buy coding that's going to basically replace, you know, a lot of this enterprise resource planning software. You buy that? I do. 100%. In fact, we put out a giant piece on this actually putting framework and numbers behind the whole DIY story. And look, the short, the pumps line of all of this is ultimately when you factor in the entire total cost of ownership, you think about the cost to maintain and replat form, you think about security risk. You think about like the lack of, you know, the what happens when you have a worst product, it all plays its

13:26
PDT

maybe about where the stock goes next. Yeah, absolutely. And thanks so much for having me. Always a pleasure to be here. Look, I think you h…

PRIVATE

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maybe about where the stock goes next. Yeah, absolutely. And thanks so much for having me. Always a pleasure to be here. Look, I think you have to look in at work days, results as kind of totality, because if you recall, two weeks ago, we had a report that potentially Silver Lake private equity was interested in this, right? So that led to a little bit of a big pop. It's faded a little bit of it since then. So you had that and you had the stock trade up a little bit today off Salesforce earnings. But look, I would characterize these results as better than feared. Workday's a name that I think investors have worried about a lot with the AI fears, what happens to headcount for a company that's primarily driven by a seat-based model. And especially with Anil, the co-founder and now CEO and former CEO stepping back in, I think that led to a little bit of concern. Look, I think results, the numbers were in line with what we expected. Definitely looking forward to the call in a little bit in about 35 minutes and seeing just what they talk about their own AI strategy in early kind of green shoots there. Well, I do want to ask you about the Silver Lake. And in fairness, I mean, the stock had kind of run up even before that became public or at least at the rumors really became public. But I mean, most investors looked at that as well. If Silver Lake sees something in here and this reporting at the time at Bloomberg was that these talks have been going on for a while. So this wasn't just something that popped into their head. What does that tell you about the sell-off that we saw in workday and some of these other SaaS stocks.

13:24
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Gisec Global, the Middle East and Africa's largest cybersecurity event. We shape policy, we power innovation, we protect the digital order. …

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Gisec Global, the Middle East and Africa's largest cybersecurity event. We shape policy, we power innovation, we protect the digital order. Let's take a look at workday. The share is under pressure in the after hours trade second quarter results relatively in line with estimates though a subscription revenue forecast for 2027 that maybe came in just a touch lighter than what the street was looking for. Rishi Jallaria joins us right now. He's got a neutral on the stock a 220 price target.

13:22
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ITF.

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ITF.

13:20
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cohort, it's not the case across the board. But overall, consumer relatively healthy labor market hanging in there as well. And of course, a…

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cohort, it's not the case across the board. But overall, consumer relatively healthy labor market hanging in there as well. And of course, as we just discussed, the AI boom, the manufacturing sector is really starting to waking up here. So I think the economy is on good track at least in the next few months. Final question, this really has to do about sort of picking and choosing where you want to allocate specifically in the equity space. And we've had a lot of people on this program talk about this shift to quality or value, whatever term you want to put on it. What exactly does that mean? We started off the show with Stephanie Gild over at Robinette, and she specifically talked about this idea, how she's laser focused on cash flow now. What constitutes quality and value right now in your mind? Well, two different definitions here, distinct definitions. as our affiliates over at Avantas Investors heavily rely on a value factor, among other things. So it's defined generally speaking as a PE to growth type ratio or valuation metric. It's obviously a lot more complicated than that. But putting sectors aside and size aside, value as a component is what are the earnings of the company relative to the price. It's as simple as that. There are a lot of complex measures to do it. That's where we're focused. That's where Avantis is focused on its stock-picking technology and they're having

13:19
PDT

of about six tenths of a percent. The main drag once again continues to be old Navy comp sales there down four percent. The street was estim…

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of about six tenths of a percent. The main drag once again continues to be old Navy comp sales there down four percent. The street was estimating a drop in comp sales of two percent and maybe just maybe that has a link to this next announcement. Gap now saying that it is appointed Michael Francis to take over as president and chief executive officer of the old Navy brand that will be effective on November 2nd. We should point out that Francis actually joined GAP earlier this year as the chief customer officer and head of marketing and ensured services over at Old Navy. So the current head of Old Navy is out. A new one will come in on November 2nd and we'll see maybe if they can work some magic there and maybe help boost that Old Navy brand a contraction in those sales. We should point out GAP sales, GAP brand sales were up 10% in the quarter beating estimates and Banana Republic comp sales up 3% in the quarter beating consensus estimates. I do want to go back to Rich Weiss over at American Century Investment and use that as a peg to get your kind of thoughts on the health of the consumer because amidst all these tech earnings we got earnings out of a lot of retail companies. We've got official economic data and I don't know Rich it's kind of like a Rorschach test. You can sort of read through all this stuff and basically say the consumers doing bad. You could also read through that stuff and say hey things are still pretty healthy. It's bifurcated, right? I'm not the first one to talk about it, K-shaped recovery, right? Certainly the top wealth cohorts continue to do well. Large part of that is the wealth.

13:17
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investors. So broad-based, we are also of course keeping a good eye on non-US equities as well. You know, emerging markets have doubled the …

DXY

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investors. So broad-based, we are also of course keeping a good eye on non-US equities as well. You know, emerging markets have doubled the return to US and EFTA this year so far. And also that's a great way to provide a hedge against the dollar decline if there is one. Well, I do want to just talk about that a little bit here, Rich. And we've obviously seen partly, I guess, a catalyst because of some of the actions that Scott Besin has made or at or at least said he would make. This idea of the debasement trade, the idea that the fiscal situation and so many other factors out there, the fight or lack of thereof against inflation is maybe making some investors a little bit skittish about risk assets. And for that matter, even non-risk assets or like the treasury bonds, which suddenly have a lot more risks seemingly priced into them. Yeah, I think I'm in the majority here when I say, I believe the recent actions by the Treasury Secretary to tamp down long-term rates is somewhat misguided. Stanley Drunkenmiller's op-ed in the Wall Street Journal, well talked about, but treating the symptoms, not the illness, right? Let the bond market speak. We have a debt and deficit problem, and that's where the fire is, okay? So throwing some water over here on long-term rates, I think history is shown, it's not a successful operation in the long run. In the short run, sure it'll tamp down long rates, but we have a bigger problem to address.

13:15
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Salesforce sees improving contract terms and low attrition rates.

Salesforce Mark Benioff Rich Wise American Central Investments Nvidia Google AI CIO Chief Mark Benioff NVDA GOOGL

– Benioff dismisses fears of AI negatively impacting sales.

– Rich Wise expresses confidence in the bull market post-earnings season.

– Strong earnings reported across multiple sectors.

– Market sentiment remains risk-on with double-digit gains year-to-date.

AI adoptionmarket confidencebull market

▸ Full transcript

Chief Mark Benioff kicked off yesterday's conference call by addressing the skeptics who said AI will lead consumers to abandon Salesforce or negotiate lower prices instead. He says attrition is near record lows, contract terms are improving, and he says, "this nonsense of this apocalypse, I think it's time to stop." We continue our coverage here with Rich Wise, senior vice president and CIO of multi-asset strategies over at American Central Investments. Rich, you know, not to be clear about Mark Benioff and his prognostications here, but there have been a lot of people that have gotten this broader AI trade wrong. I am curious that now that the earnings season is basically done, we've heard from Nvidia, the biggest company of them all, we've heard from Salesforce, Google, and everyone in between here. How does it stack up based on what we learn this quarter? Does it give you, I guess, a little bit more confidence in this bull run, or are you still a little skeptical? No, definitely more confidence. The earnings are coming through and remain, as you will know, it's not just AI and tech, right? Year to date, it's pretty strong almost across the board, risk-on market in a number of different sectors of the stock market, double-digit gains top line and bottom line virtually across the board year to date. So this just is a shot in the arm to leave us to believe it's going to continue. So I wouldn't say we're wildly bullish, but we're definitely leaning.

Analysis

Salesforce CEO Mark Benioff addressed skepticism around AI's impact on consumer behavior, asserting that attrition rates are low and contract terms are improving. This confidence in AI's role in driving sales suggests a potential for continued growth in the tech sector.

Rich Wise from American Central Investments expressed increased confidence in the ongoing bull run, noting strong earnings across various sectors, not just tech. This broad-based strength indicates a risk-on sentiment in the market, which could sustain momentum moving forward.

13:13
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S&P 500 up 0.7%, driven by Nvidia's 8.7% gain.

Nvidia Mel Alphabet Salesforce Crowdstrike Synopsys Romain Bostic S&P 500 NVDA GOOGL

– Mel's shares down 10% after sales forecast cut.

– Salesforce and Crowdstrike saw significant rallies of 23% and 21%, respectively.

– Alphabet's shares down for three consecutive days.

– Nvidia's post-earnings performance is its best in nine quarters.

tech sector performanceconsumer goods outlooksoftware stock resurgence

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Welcome back to the close. I'm Romain Bostic. Let's take a look at where markets ended on the day for most of the major indices. The end was well. It was actually higher, the S&P 500 adding about seven tenths of a percent on the day. But we should point out a big chunk of those gains, in fact, all of those gains on a point basis, pretty much coming from Nvidia. To the downside, the biggest decline in the S&P 500 today I wonder really keep an eye on was for Mel. The shares dropped about 10% this after the company cut its sales forecast. This is the maker of spam, a lot of turkey products, having its worst day in a year, August 28th of 2025. Meanwhile, shares of Alphabet have been on an interesting downtrend as well. They only closed down on the day by about four-tenths of one percent. But it's now on a three-day slump, and quite frankly, it's been down by several percentage points going all the way back to the end of July. You flip up the board here, and we want to take a closer look at the tech space specifically. Nvidia had a great day. One of its best post-earnings day performances that we've seen in at least about nine quarters, an 8.7% gain on the day. But it kind of overshadowed what was also a phenomenal day for some of the software names. Salesforce rallying 23% on the day, Crowdstrike rallying 21% on the day, and Synopsys up about 14% on the day. And that actually brings us to our top story. That top story is about the resurgence of these software stocks over.

Analysis

The S&P 500 gained approximately 0.7% today, primarily driven by Nvidia's strong performance, which saw an 8.7% increase post-earnings. However, Mel's shares plummeted 10% after cutting its sales forecast, marking its worst day in a year.

Despite the overall market gains, Alphabet's shares have been on a downward trend, indicating potential concerns in the tech sector. The significant rallies in software stocks like Salesforce and Crowdstrike suggest a selective recovery, but the mixed performance highlights ongoing volatility in the market.

13:08
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Abercrombie and Ulta Beauty reported strong earnings, indicating positive consumer sentiment.

Abercrombie Ulta Beauty Walmart Dollar General Dollar Tree Treasury Secretary The Treasury Secretary DXY

– Walmart's raised guidance did not prevent a market decline, reflecting investor skepticism.

– Dollar General and Dollar Tree are moving in different directions, showcasing a mixed retail landscape.

– The current economic recovery may require new frameworks to understand consumer behavior.

– Investors should be selective in retail investments due to uneven performance.

consumer spendingretail performanceeconomic recovery

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We have a lot of questions about this idea of where consumer spending stands. You think about just how much of a mixed picture it's been out of a lot of these consumer-facing and retail companies. You have some companies reporting great growth, others still struggling. I thought it was interesting when we had last week we were talking on the program about Walmart and the idea that a company that actually raised its guidance still got hit in the market primarily because of that seemingly potentially slowdown in some of that sequential same-store sales growth. Yeah, and you think about where the consumer is. It's really a mixed bag, Remain. Like you said, we just had Abercrombie earnings the other day that stock blew it out of the water. Ulta Beauty, another consumer-focused name. Look, the read right now, at least from the second quarter, is positive. A positive read on the consumer. We do still have to see that forecast, though. Did you guys see the results we got this morning out of Dollar General and Dollar Tree and this idea sort of like how you have two companies kind of in the same space kind of moving in different directions or different reasons and it gets to this idea. I mean we're beyond K-shaped or whatever people are doing trying to describe this economy. I think we just have to kind of come up with a new letter or shape to sort of characterize it. Well, the Treasury Secretary would like to see a C, right? Yeah. He calls it C-shaped. The Treasury Secretary up to these days. You haven't heard from him in a couple of days. Thank you. Did you watch that press conference he gave earlier this week? It was Monday. I cannot believe that was this one.

Analysis

Consumer spending remains a mixed picture, with some companies like Abercrombie and Ulta Beauty reporting strong growth, while others like Walmart face challenges despite raising guidance. The divergence in performance among retail companies suggests a complex economic landscape that may require new frameworks to understand consumer behavior.

The contrasting results from Dollar General and Dollar Tree highlight the uneven recovery in the retail sector, indicating that not all consumer-facing businesses are benefiting equally from current economic conditions. This suggests that investors should be cautious and selective in their retail investments, as the overall consumer sentiment may not be as robust as it appears.

13:05
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Workday's after-hours shares down 4.3% despite buyback announcement.

Workday Marvell Technology NVIDIA Salesforce Autodesk Abercrombie Ulta Beauty Affirm Gap Mark Benioff Silver Lake AI

– Fiscal year adjusted operating margin for Workday increased to 31%.

– Marvell's revenue slightly beats estimates but shares decline.

– Stable gross margin guidance from Marvell may not satisfy growth expectations.

– Narrowing subscription revenue forecast from Workday impacts investor confidence.

AI impact on softwarechip sector performanceshare buybackssubscription revenue trends

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Create their own AI product or do they choose to partner with other companies? At least for Workday, the CFO said in the results, "Our results reflect continued momentum across the platform. AI is emerging as a strategic driver of customer expansion." Look, it's not much to lift the shares right now; the stock is down about 4% now in the after-hours. Two questions also about what these companies are doing with cash. The company authorized an additional $4 billion in share buybacks. That's Workday shares down in the after-hours still by 4.3%. Once again, fiscal year adjusted operating margin: the company sees fiscal year adjusted operating margin coming in at 31%. That's an increase from what it saw earlier, which was 30.5%. Like you said though, that narrowing of its fiscal year subscription revenue forecast is not doing much for shares in the after-hours. All right. Now let's move on to the chip space here and away from the software space for a second. Marvell's earnings are crossing the wire right now. Second quarter revenue does beat slightly at $2.74 billion. The street was looking for $2.71 on average, adjusted EPS at 94 cents a share. That's about a penny above the average of street estimates. Take a while here to dig in to try to find the forecast. But overall, the company is saying at least on the surface that it is expecting gross margins of roughly about 58%, which is around what the street was looking for here. So no real material change in that margin guidance. Okay, this is Marvell Technology; shares are down.

Analysis

Workday's shares fell 4.3% in after-hours trading despite reporting a slight increase in fiscal year adjusted operating margin to 31%. The company also authorized an additional $4 billion in share buybacks, but a narrowing of its subscription revenue forecast weighed on investor sentiment.

Marvell Technology reported second-quarter revenue of $2.74 billion, slightly beating expectations, but shares are also down. The company's gross margin guidance remains stable at around 58%, indicating no significant improvement in profitability outlook, which may concern investors looking for stronger growth signals in the chip sector.

13:03
PDT

Salesforce shares rose significantly, indicating strong market confidence.

Salesforce Workday Autodesk AI Mark Benioff Silver Lake

– Workday and Autodesk reported earnings in line with estimates but saw share declines.

– The AI narrative continues to create volatility in the software sector.

– Market breadth is narrow, with many sectors underperforming.

– Investors should consider the varying impacts of AI on different software companies.

AI impact on softwaremarket breadthearnings volatility

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So pretty much in line there. The company's fiscal year adjusted operating margin at 31%. It saw about 30.5%. And the estimate was for 30.5%. Second quarter revenue coming in above estimates, ever so slightly at $2.65 billion. And the company's third quarter subscription revenue at $2.52 billion. Shares of Workday down about 1.2%. Remember there was that interest or reported interest earlier this year from Silver Lake that caused shares to move higher. Absolutely here. And of course, not all software companies. We talked about the big gainers on the day, Tim and Lisa. And one of them was a software name. And I think where a lot of folks are wondering whether we can take sort of what was out of Salesforce and maybe extrapolate into what we would hear from Workday and Autodesk. But obviously, every software company has a little bit of a different take here on how they fit into the AI story. Yeah. We had a great conversation with Brody about this earlier. I mean, we were told there was going to be a SaaS Pocalypse, right? Yeah. So again, like today we're seeing with Salesforce with the stock up, the most going back six years, it's still down around 5% on the year. So it speaks to the challenges that I think some investors in the public markets still have when it comes to the effect of these AI companies on some of these cloud providers or software providers. Yeah, well, I get it. Yeah. And it's this idea though too. It's like, okay, well, if you're just sort of a generalist in this space, maybe AI does eat your lunch. If you're more entrenched, which is sort of the argument of Mark Benioff at Salesforce would make that the one year more entrenched into some of these enterprise, into some of these big corporations and their enterprise.

Analysis

Software stocks showed mixed results with Salesforce up significantly, while Workday and Autodesk reported earnings that were in line with estimates but saw their shares decline. The market's reaction highlights the ongoing uncertainty surrounding the impact of AI on software companies, with entrenched players potentially faring better than generalists in the sector.

Investors should note that while the AI narrative has driven some stocks higher, the overall market breadth remains narrow, with many sectors underperforming. The divergence in performance among software companies suggests that not all are equally positioned to benefit from AI advancements, indicating a selective investment approach may be necessary.

13:01
PDT

Information technology led the market with a 3.4% gain.

Dow NASDAQ S&P 500 information technology consumer staples healthcare consumer discretionary energy NVIDIA Autodesk IMAP AI NASDAQ 100 S&P 500 NVDA

– The S&P 500 exhibited weak breadth, with more stocks declining than advancing.

– Autodesk's earnings report showed adjusted EPS growth but a slight decline in stock price.

– Consumer staples, healthcare, and consumer discretionary sectors were among the biggest losers.

– The overall market sentiment remains cautious amid mixed earnings results.

market breadthsector performanceearnings season

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The Dow adding about 100 points or two-tenths of 1%. The NASDAQ composite up about 1.6% to close out the day while the NASDAQ 100 adding 1.4% and the Russell 2000 getting in on the action with a gain of about 8 points or three-tenths of 1%. Just to illustrate that lack of breadth that's happening in the S&P 500 right now, things are still getting settled but even though the S&P was up more than seven-tenths of 1%, only 150 stocks moved higher today, 350 moved lower. And speaking of illustrating, if we go to the IMAP, you can really get a good visual of the concentration. The only sector in the S&P 500 that was in the green today was information technology, up 3.4%. Every other sector in the red leading the losses here, consumer staples, healthcare, and consumer discretionary. But even energy, which is kind of a pick and shovel AI trade, was not able to post a gain today. I want to remind everybody we are still awaiting earnings. Still about NVIDIA in today's trade but we're expecting to get Workday. I think it's crossing right now. Let's actually go to Autodesk first. Autodesk crossing the wire of the knee-jerk reaction for the software maker. Down about 2% here. Adjusted EPS did rise to about $3.30 a year over year from 262. The previous year net revenue in the quarter about in line with estimates at about 2.05 billion. The street was looking for 2.01 billion in the quarter. Also slightly above estimates at about 1.85 billion in the street. Overall, I was looking for 1.8.

Analysis

The Dow rose by about 100 points, while the NASDAQ composite gained approximately 1.6%, driven primarily by a strong performance in the information technology sector, which was up 3.4%. However, the S&P 500 showed a lack of breadth, with only 150 stocks advancing compared to 350 declining, indicating concentrated gains in a few sectors.

12:58
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Salesforce's strong earnings signal recovery in the software sector.

Salesforce Workday Marvell Abercrombie Ulta Beauty Affirm Gap NVIDIA Sarah Mallick Bloomberg CIO Marc Benioff NVDA PRIVATE

– Upcoming earnings from Workday and Marvell are key to watch.

– Not all software companies are performing equally; some have stronger competitive advantages.

– Rising treasury yields and inflation remain significant concerns for the market.

– Mega-cap tech stocks continue to lead market performance.

software sector recoveryrising treasury yieldsinflation concernsmega-cap tech performance

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I would like to see that with strong Marvell earnings. Sarah, always a pleasure. Sarah Mallick, CIO over at Nuvine, counting us down to those closing bells. Emily, we are just about three minutes away from those bells and a reminder, we are also going to get more earnings. Earning season never stops. You heard Sarah refer to it. We're going to hear from Workday, we're going to hear from Marvell. We're also going to hear from a couple of interesting names in the more consumer-facing sector, Ulta Beauty, Affirm, as well as Gap. Yeah, I mean, I think it's a good tailwind for these retailers considering what happened with Abercrombie yesterday, but the software names have really been surprising. Salesforce, 23% right now. So the SaaS apocalypse is behind us, I guess. It's over. Well, it depends. I mean, not all software companies are alike. Some have a little bit more of a moat. At least that's what Marc Benioff will tell you. Others maybe not, and maybe we'll find that out in the next few minutes. Closing bells are upon us with most of the major indices right now holding in the green. A full breakdown of all of today's price action starts right now. The closing bell, Bloomberg's comprehensive cross-platform coverage of the U.S. market close starts right now and right now we are two minutes away from the end of the trading day. Romaine Bostic here with Emily Graffaio taking you through to that closing bell. It's a global sample pass. Tim Centovic joins from the radio booth. Lisa Mateo in today for Carol Master. Welcome to our.

Analysis

The market is reacting to strong earnings from software companies, particularly Salesforce, which is up 23%, suggesting that fears of a 'SaaS apocalypse' may be overblown. Additionally, upcoming earnings reports from companies like Workday and Marvell will be crucial in assessing the broader software sector's health.

Investors should note that while some software firms are thriving, not all are equally positioned, indicating a potential divergence in performance within the sector. The resilience of mega-cap tech stocks, particularly in the context of rising treasury yields and inflation concerns, highlights a critical area for investment focus.

12:56
PDT

AI trade primarily benefits equity markets, especially Mag7 and NASDAQ.

NVIDIA Salesforce Workday Autodesk Mag7 NASDAQ AI The Real Yield NASDAQ NVDA

– Fixed income investors have not seen similar gains from AI.

– High yields in fixed income still provide strong return potential.

– Recent software earnings indicate resilience against prior fears.

– AI is beginning to influence credit market dynamics.

AI impact on marketsfixed income challengessoftware sector resilience

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Market higher. Hey, what about within credit markets? We had a guest on The Real Yield a little bit earlier today saying that equity investors have fared well from AI, but fixed income investors haven't. I think he said we've been a bust. AI has been a bust for fixed income investors. Is there opportunity now to come in where spreads are? Well, spreads have been pretty tight recently, which has been a little bit challenging for fixed income markets. But of course, yields are high, so returns on fixed income are still, you can still get pretty strong returns on fixed income. It's interesting, you are seeing AI creep into the credit markets though, in terms of the types of credits that are available for fixed income investors. But the main beneficiary of the AI trade is the Mag7 and the NASDAQ; that's where the earnings are. And that's why those are the companies that have been leading the markets higher on the equity side. I do, it's kind of interesting, you talk, we talk about the Mag7, but were you surprised at some of the results that we got out of some of the software makers? I know all the focus is on NVIDIA today, but I mean, you have Salesforce up 20%. A lot of the other software makers that have reported over the last couple of weeks seem to have sort of, at least for now, put some of those fears about that SaaS apocalypse to rest. And as you said, we're going to hear from Workday and Autodesk after the bell tonight. Is it too soon to sort of make a call on that? Well, there was so much noise around the impact of AI on software companies earlier this year. But really when you separate the signal from the noise, it didn't show up in software companies' fundamentals. Revenue growth rates for software.

Analysis

The equity markets have been buoyed by the AI trade, particularly benefiting the Mag7 and NASDAQ, while fixed income investors have struggled, with AI being described as a bust for them. Recent earnings reports from software companies, including a notable 20% rise in Salesforce, suggest that fears of a SaaS apocalypse may be overblown, indicating resilience in software fundamentals despite earlier concerns.

Smart money should note that while fixed income spreads are tight, high yields still offer strong returns, and AI's integration into credit markets could present new opportunities. The divergence in performance between equity and fixed income investors highlights a critical shift in market dynamics, emphasizing the need for a strategic approach to asset allocation in the current environment.

12:54
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Treasury yields are rising due to a stronger economy but structural inflation remains a concern.

Nvidia Federal Reserve Jackson Hole Tom Keene Michael McKee Kevin Warsh FEDFUNDS NVDA CL=F

– The Fed's potential actions on interest rates are under scrutiny as employment markets weaken.

– Nvidia's strong performance in AI could shift investor sentiment towards tech stocks.

– Concerns about stagflation are emerging but not yet deemed a significant risk.

– Higher oil prices are adding to market turmoil alongside rising yields.

Fed policyinflation concernsAI investmentequity market dynamics

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Levels will be and a bet on what the direction is for those yields. Yields are increasingly important. It used to be more about the bond market and how is the bond market thinking about the equities. Take note of what the tenure and what are 30-year yields doing. And we've been seeing those creep upward mostly because for one good reason, which is a stronger economy, but one reason that that's not so great, which is that inflation is structural. And how will the Fed react to that? Will they raise rates or will they be able to stay on pause? I don't think we have any cuts on the table, but what to watch there will be the employment markets, which are weakened. Now, of course, if employment markets continue to weaken and inflation stays structurally high, then we have to start thinking about stagflation. I'm not thinking that stagflation is going to be an issue yet, but that's another thing to watch. Employment markets, are they going to keep getting worse? And secondarily, will inflation stay structurally above target, which is where we are on inflation already? So where in the equity market then is basically a good place for investors to hide out? Is it the mega-cap tech stocks that have these strong balance sheets, that have this resilience, or is it maybe some more unloved parts of the equity market that haven't rallied yet? There's been three pressure points causing turmoil for the markets recently: that is yields, which we already discussed, higher oil prices, and of course questions around the A.I. trade. Nvidia answered that question yesterday very boldly and dismantled the bears' case on A.I.

Analysis

The market is reacting to rising treasury yields, driven by a stronger economy but complicated by structural inflation concerns. Investors are weighing the implications of potential Fed actions on interest rates amidst weakening employment markets, raising questions about stagflation risks.

Smart money should note the divergence in equity performance, with mega-cap tech stocks showing resilience while other sectors remain under pressure. The recent strong performance of Nvidia in the AI space may signal a shift in investor sentiment towards tech, but the overall market remains cautious due to external pressures like oil prices and yields.

12:52
PDT

Two-year yield up two basis points.

Jackson Hole Nvidia Federal Reserve CIO AI Tom Keene Michael Mc Kevin Warsh Eastern Time Sarah Mallock New Vieng FEDFUNDS NVDA PRIVATE CL=F

– Long-term yields also increased.

– Fed speakers emphasize inflation control.

– Market expectations for Fed movement are low.

– Focus on commentary regarding long-term yields.

Fed policyTreasury yieldsAI sector performanceOil prices

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Across the curve, the two-year yield is up about two basis points, and longer-term yields are up as well. We had two Fed speakers already at Jackson Hole talking about how inflation is still above that two percent target and they want to see the central bank act to control it. We're going to have special coverage right here on Bloomberg tomorrow morning from Jackson Hole with Tom Keene, Michael McKee, and a few other folks that I'm probably forgetting. We are going to hear from Kevin Warsh with his keynote address at 10 a.m. Eastern Time, so you definitely want to tune in for that as the market, in what should be normally a relatively slow August, has really had a lot to chew on over the last few days. Sarah Mallock joins us right now, CIO over at New Vieng, to help us break down maybe what investors are going to have their eye on. You talk a lot about this idea of some of the pressure points out there with regards to some of those long-term treasury yields, the AI earnings, and the need to sort of prove itself with rising oil prices. We see where oil prices are. I guess we got some proof of life yesterday from Nvidia on AI. Still, though, the jury is out on where treasury yields go next. What do you expect tomorrow? Well, we expect it's interesting; the markets are not pricing in a big move tomorrow given worship speed. It's about 60 basis points in terms of cluster minus. So, there's not a lot of expectations out of him. What I'll be looking for is does he have commentary around his comfort with long-term yields at over 5%.

Analysis

The two-year yield rose by about two basis points, while longer-term yields also increased, as Fed speakers at Jackson Hole reiterated the need to control inflation above the 2% target. Market expectations for significant movement tomorrow are low, with a focus on Fed commentary regarding long-term yields exceeding 5%.

Investors should note the pressure points surrounding long-term treasury yields, AI earnings, and rising oil prices. The market's muted expectations for tomorrow's Fed address suggest a cautious approach, but any commentary on long-term yield comfort could shift sentiment significantly.

12:49
PDT

Agilent Technologies shows strong market performance post-earnings.

Agilent Technologies Bork McDonald Wendy's Tri-anthone Burger King McDonald's Danielle Satori Bloomberg AI

– Wendy's faces significant investor skepticism regarding its turnaround plan.

– The fast-food sector is experiencing shifts in brand perception and market positioning.

– Wendy's has had multiple CEO changes, indicating instability in leadership.

– The cautious rollout of AI technology reflects a strategic approach to cybersecurity.

earnings performancefast-food sector dynamicscybersecurity strategy

▸ Full transcript

We actually just expanded the set of customers that have access to Mythos. I think it's about an additional 150 organizations around the world in 15 different countries. Our approach to Mythos has always been that there is a time component to it. We released it initially to cyber defenders, including some nonprofit groups, governments, and organizations that are critical infrastructure for protecting against potential cyber attacks. Just like in any kind of security vulnerability situation, you have to give the defenders a head start. The technology and AI models are going to keep advancing. If it's not us releasing a Mythos-level model, another AI company will. It matters who you give access to first and how long they have to patch some of the vulnerabilities that Mythos was capable of revealing. We are taking a very cautious, tiered approach, which I know can be frustrating because people really want access to the model. However, as a company founded on principles of being ethical and responsible, we thought it was important to give access to organizations capable of helping us defend against these risks, and then slowly widen that circle to more critical infrastructure until we feel it's safe to release it more widely.

Analysis

Agilent Technologies shares are up for a third consecutive day following strong earnings support, indicating positive market sentiment towards the company's recent performance. Conversely, Wendy's stock has dropped 13% after reports that Tri-anthone management has no plans to take the company private, raising concerns about its turnaround strategy.

12:47
PDT

Agilent is leveraging AI and automation to improve efficiency and customer engagement.

Agilent Technologies OpenAI Bork McDonald AI Gisec Global Middle East Jones Road Bobby Brown Estee Lauder

– The company is at the forefront of creating a new market for AI-driven solutions.

– Internal innovation initiatives like Ignite are enhancing Agilent's agility.

– The CEO's confidence in growth strategies indicates a positive outlook for the company.

– Investors should monitor Agilent's developments in AI and automation closely.

AI innovationautomationmarket growth

▸ Full transcript

isn't defined by technology alone. As sovereign AI reshapes digital independence, as agentic AI transforms decisions, as quantum unlocks new possibilities, every breakthrough demands a cyber-first mindset. That's why the future meets at Gisec Global, the Middle East and Africa's largest cybersecurity event. We shape policy and power innovation. We protect the digital order. Like, emotion of saying, uh-oh, what if I'm a one-hit wonder? I was a little scared, but then I just threw it up into the wind and went for it. Jones Road, where'd that name come from? Well, I sold the rights to Bobby Brown to Estee Lauder when we sold the company, so I couldn't use it again.

Analysis

The discussion highlights the transformative potential of AI and automation in enhancing operational efficiency and customer engagement at Agilent Technologies. The CEO emphasized the company's strategic partnerships and innovations that position them favorably in a rapidly evolving market landscape.

Investors should note that Agilent's focus on internal innovation and enterprise capabilities through AI could lead to significant competitive advantages. The early-stage market creation around these technologies suggests potential for substantial growth, making Agilent a company to watch in the coming years.

12:45
PDT

Wendy's shares fell sharply due to management's lack of plans to take the company private.

Wendy's Burger King CEO

– The new CEO acknowledged significant operational issues affecting the brand.

– Wendy's has lost its competitive edge to Burger King in recent quarters.

– Investor confidence is wavering amid ongoing leadership changes.

– The turnaround plan may require more time and substantial changes.

brand perceptionturnaround strategy

▸ Full transcript

I mean, clearly the investors today are not too confident about that turnaround plan. It might be a question of how long this is going to take because just to give you a little bit of context, the new CEO outlined some pretty fundamental issues that the company has faced. He said that the company has let quality slip, that they've relied too much on deals, and that their marketing hasn't hit. So he seems to be indicating that there are just a lot of changes that need to be made. And of course, when you're a public company, it's just harder sometimes to go fast enough when it comes to those changes. But you know, it's not like the company was stagnant and needed a jolt from an outside investor. There was already a plan that was in place, including a new CEO. The company has had about three CEOs in the past few years. I always thought that they were one of the better-performing fast food chains, not just in terms of actual sales, but also in terms of perception and brand equity. Has that been lost to McDonald's or Burger King? That has definitely changed. A few years ago, Burger King was actually the one that slipped, and Wendy's became the number two burger chain in the U.S. As of this past quarter, that has now changed; Burger King is back on top. It is interesting that the CEO was candid in the most recent earnings call and acknowledged that they had this perception as being a high-quality brand.

Analysis

Wendy's shares dropped significantly after reports indicated that the company's management has no plans to take the chain private, raising investor concerns about its turnaround strategy. The new CEO highlighted fundamental issues such as quality decline and ineffective marketing, suggesting that substantial changes are needed to regain competitive positioning against rivals like Burger King.

The shift in brand perception is notable, as Wendy's was once viewed as a strong competitor but has now fallen behind Burger King in market standing. This indicates a potential long-term challenge for Wendy's to restore its brand equity and consumer confidence, which could impact its sales and market share moving forward.

12:43
PDT

Agilent is focusing on expanding service capabilities in life sciences and semiconductors.

Agilent Technologies OpenAI NVIDIA China France Open Interest Bloomberg Savannah Wall Street Bloomberg Television Anna Edwards Tom Mc The Tri PRIVATE

– The company is investing in AI and autonomous labs to enhance operational efficiency.

– Academic and government revenue has declined, but Agilent views it as a small market segment.

– Partnerships with AI firms like OpenAI are key to Agilent's future growth strategy.

– Agilent's proactive innovation approach positions it well for future market opportunities.

AI integrationsemiconductor supply chainlife sciences growth

▸ Full transcript

day begins. And this is Open Interest only on Bloomberg. Good morning. Good morning. This is Bloomberg Savannah. Welcome back to the opening trade. It's Bloomberg money. This is the Asia trade. This is Wall Street. We welcome the balance of power. You're watching Bloomberg deal. Welcome to Bloomberg this weekend. This is Bloomberg Television. Earning season is here. I think it is a significant moment. Record quarterly profits. Bloomberg is first to break the numbers. Stock traders blow past estimates at France's biggest bank with the smartest insights do you think the age of the mega deals and pharma is back growth has been more than 60 percent the investment bank as you say has done extremely well we're just getting some slight signs that maybe consumers are adjusting their behavior continuing coverage on Bloomberg context changes everything the training day is about to start and you're already looking for that edge the opening trade brings you everything you need to know as markets open across Europe. I've got John's. I'm Anna Edwards and I'm Tom McKenzie. This is your opening trade only on Bloomberg. Shares of Wednesdays having their biggest one day drop since 2020. That's on the back of a report. The Tri-anthone management has no plans to take the burger chain private. Danielle Satori joins us right now covers the restaurants for us at Bloomberg from our Chicago bureau. It just seemed what I don't like a couple weeks ago the stock was having its best day ever.

Analysis

Agilent Technologies' CEO highlighted the company's strategic focus on expanding service capabilities in life sciences and semiconductor sectors, particularly through AI and autonomous labs. Despite a decline in academic and government revenue, Agilent is positioning itself for growth by leveraging partnerships and innovations in AI to enhance productivity and efficiency.

The emphasis on AI and automation suggests a transformative shift in Agilent's operational model, potentially creating new revenue streams. Smart investors should note the company's proactive approach to navigating market challenges and its commitment to innovation, which may yield competitive advantages in the evolving landscape of life sciences and semiconductor industries.

12:38
PDT

Agilent reported 7% organic revenue growth and adjusted EPS of $1.62.

Agilent Technologies OpenAI NVIDIA China AI

– Partnership with OpenAI aims to enhance efficiency through physical AI.

– Focus on autonomous labs could redefine productivity in life sciences.

– Market for AI in lab automation is still in early stages.

– Agilent's growth strategy includes expanding service capabilities and exploring acquisitions.

AI integrationlife sciences growthautonomous labs

▸ Full transcript

We worked in partnership with OpenAI, looking at how we create abundance within the company and how we do business faster with customers. In our products, the idea of physical AI and the ability of our software to lead the way in this autonomous lab will become really clear over the next couple of years. If you think about the autonomous lab, OpenAI would be really important for us on the software side, with coding, etc. R2s are the eyes; automation or physical AI are the hands, and the agents running the experiments are the brains. You can see AI across all that value chain. The future is very bright, and we're very well positioned for that. If you lead with growth and think about how you're going to create more growth for your customers, it's proving to be very successful for us. As you started embedding a lot of this AI and automation into these workflows, when does that become a separate line item that folks can look at rather than just going to the slide deck and seeing what management decided to call it? The great news is that it's really early stage. The market is actually being created, and we're at the forefront of that creation, so it's really early to see it. What is good news is that we're involved with a number of lighthouse companies about how we're partnering and how we can make that more effective for our customers. Over the next year, you will see more information coming out for us, and over time, I think you will see the future will be much bigger in that regard. Why is it important for Agilent? Because we had the customers be more productive with it, but we also actually create more.

Analysis

Agilent Technologies is leveraging partnerships with OpenAI to enhance its capabilities in physical AI and autonomous labs, positioning itself for significant growth in the life sciences sector. The company reported a 7% organic revenue growth and an adjusted EPS of $1.62, indicating strong performance and potential for sustained growth driven by advancements in AI and automation.

Smart money should note that Agilent's focus on integrating AI into its workflows is not just a trend but a foundational shift that could redefine productivity in the life sciences industry. The early-stage market for autonomous labs presents a unique opportunity for Agilent to establish itself as a leader, potentially creating new revenue streams as the technology matures.

12:36
PDT

Agilent's organic revenue growth was 7% in the last quarter.

Agilent Technologies China NVIDIA PFAS USDCNH

– Increased demand for food and environmental testing is a key driver.

– Academic and government revenue declined by 3%.

– Agilent is focusing on AI and semiconductor sectors for future growth.

– China's innovation and manufacturing investments are benefiting Agilent.

supply chain riskAI investmentsemiconductor growth

▸ Full transcript

It's a hotbed of innovation in life sciences, and we have a long-standing presence in the region of over 40 years. In the region, there is a lot of innovation and many manufacturing companies from outside China investing in R&D, as well as a significant indigenous pharma industry, which is really important. Additionally, we have exposure in the semiconductor sector in China, which we are servicing. In the quarter, we also saw an uptake in testing laboratories for food and environmental safety, which has been the core of our business, particularly testing for PFAS and contaminants for food export and local use. Overall, it was a great story and a big step up for China, and we have been making investments over the last few years to ensure continued growth. The only declining market I noted in your statement was in academic and government revenue, which was down about 3%. This raises questions, especially given the changes in how the U.S. funds academic and government research. Is this a business you plan to focus on more, or are you accepting that times have changed and funding has shifted elsewhere? Yes, it's a market for us, but it's relatively small, probably 2% to 3% of the whole company. It has been challenged, but we are ready with our tools, and it's important that our tools and services meet consumer needs.

Analysis

Agilent Technologies reported a 7% organic revenue growth, driven by increased demand in testing laboratories for food and environmental safety, particularly in China. However, the academic and government revenue segment declined by 3%, raising concerns about funding shifts in U.S. research.

Smart money should note Agilent's strategic focus on expanding its service capabilities in fast-growing adjacencies, including AI and semiconductor manufacturing, which could provide significant growth vectors despite challenges in the academic sector. The company's long-standing presence in China positions it well to capitalize on local innovation and manufacturing investments.

12:34
PDT

Agilent is exploring acquisitions in AI and autonomous labs.

Agilent Technologies NVIDIA Jensen Huang META Google OpenAI AI ICP NVDA

– The company is critical to semiconductor manufacturing supply chains.

– Agilent reported 7% organic revenue growth in the last quarter.

– There is potential for growth in fast-growing adjacencies.

– Reshoring trends are benefiting Agilent's business.

AI investmentsemiconductor supply chainlife sciences growth

▸ Full transcript

So you've been a player in life sciences consolidation over the years. What would be attractive for a potential deal? Would it be wanting to expand into a new region or a new business entirely? Yes, so we're in amazing markets, but there's a lot of fast-growing adjacencies, so continuing to add to our service capability. Also, you look at the area of AI and software and the idea of autonomous labs. These are labs that are going to be autonomous over time. So looking in that space, how do we partner invest in physical AI, but also in our tools to make sure we have the right tools for the future? And you see that also in our semiconductor business where we have reshoring going on and no fab runs without an Agilent machine or an Agilent technology, both in the high purity chemical side and on the nodes. So we have a lot of growth vectors going forward in a lot of areas where we can expand. How healthy do you think the supply chain is in the semiconductor space? I know it's a little different than the Nvidia chips, but of course we were talking earlier about Nvidia's supply. And this is a company that's talking about not being able to procure the supply that they need. What does it look like from your business? Yeah. So talking from our perspective, we're the beneficiary of AI by plugging into chip manufacturing. So you see us in fabs, you see us in the support infrastructure around fabs. No fab can run without our system. So we're incredibly important to the semiconductor supply chain, ICP, triple quad technology, and also you might have heard of forever chemicals. That's another.

Analysis

Agilent Technologies is positioning itself for growth by exploring acquisitions in fast-growing adjacencies, particularly in AI and autonomous labs, which are crucial for future developments. The company is integral to the semiconductor supply chain, emphasizing its importance as demand for chip manufacturing rises due to AI advancements.

Smart money should note that Agilent's focus on expanding its service capabilities and investing in AI tools could provide a competitive edge in the evolving landscape of life sciences and semiconductor manufacturing. The mention of reshoring and the critical role Agilent plays in fabs indicates a robust demand environment that could sustain growth in the coming years.

12:31
PDT

Nvidia's supply commitments more than doubled, indicating strong demand.

Nvidia Agilent Technologies Porick McDonald Jensen Huang AI CEO EPS Romain Bostic Emily Grafeo Pixon Shovels Porick Mc So Agilent NVDA

– Agilent Technologies reported 7% organic revenue growth.

– Nvidia's growth forecast suggests potential supply constraints extending into 2028.

– Agilent's growth is linked to critical sectors like semiconductor manufacturing.

– Market sentiment remains positive for both Nvidia and Agilent.

supply chain riskAI growthlife sciences investment

▸ Full transcript

is the countdown to the close. I'm Romain Bostic. And I'm Emily Grafeo. You know, we've been talking a lot about NVIDIA, which of course is kind of the quintessential Pixon Shovels company in the AI space, but there's another company out there, Agilent. It's kind of the Pixon Shovels company in the life sciences space, which actually has a lot of similar parallels to what's going on in AI directly. Yeah, there's a lot of crossover, and you can see the stock up in the green right now, Romain. Yeah, it's up about a percent on the day, which points out this stock's been on a tear since its last earnings report three months ago. I think it's up about roughly 40% since late May here. So some people now are trying to get back on board with this stock and a lot of that will depend on, well, how much they can keep this growth going. Porick McDonald joins us right now. He's the CEO of Agilent Technologies, coming off of revenue growth in the most recent quarter of about 7% on an organic basis, adjusted EPS of $1.62. There is a durable story here, Porick, but walk me through the mechanics of what led to the organic growth, what led to that EPS number this quarter, and whether that's sustainable for the next quarters coming up. Yeah, thanks very much. So Agilent is a part of an essential infrastructure behind modern science from developing and manufacturing new medicines and diagnosing cancer to ensure food and water safety and actually enabling advanced semiconductor manufacturing which is really critical at the moment. Thinking about the quarter we delivered 7%.

Analysis

Nvidia's stock surged following a surprising long-term growth forecast, highlighting a significant increase in supply commitments. Agilent Technologies also reported a 7% organic revenue growth, indicating strong demand in essential infrastructure for modern science.

The notable insight is that Nvidia's supply constraints may extend growth cycles into 2028, while Agilent's performance suggests a robust demand across multiple sectors, including semiconductor manufacturing. This duality in supply and demand dynamics could shape investment strategies in both AI and life sciences sectors.

12:25
PDT

Nvidia's supply commitments have doubled, indicating strong demand.

Nvidia Jensen Huang META Google OpenAI GTC MTI TPU Hot Chips NVDA META GOOGL DXY

– Potential supply constraints could extend growth cycles into 2028.

– Competition from META and Google is increasing in the AI space.

– Visibility from semi-caps suggests ongoing growth in chip production.

– Nvidia's current lead may be challenged by emerging competitors.

supply chain riskAI competitionsemiconductor growth

▸ Full transcript

You know, when Jensen guided the one trillion dollars worth of orders back in March at GTC, now we see it in revenues, in the guidance. Now the question is, what happens beyond 2027? If there are supply constraints in calendar 2027, it's probably going to extend the cycle into 2028. We hear that, by the way, across the board from other vendors, across chips, equipment, networking, etc. We hear it already, visibility into subsequent years. We hear it from semi-caps, by the way. When semi-caps tell you they have visibility, the guys who sell the tools to make these chips tell you they have visibility that extends for a few years. That's actually the strongest data point that tells you that if we're adding more capacity to build these chips, we're going to keep growing probably until the end of the decade. Talk to us about competition to Nvidia because that could look a lot different by the time we get to 2028 than what it looks like today in 2026. Yes, that's definitely, of course, a major concern. We've been following, by the way, a big event, Hot Chips, where you have all the hyperscalers who came on stage and announced, for example, META came up and gave a lot of details about their MTI accelerator, Google gave details about their TPU, and even had OpenAI come on stage and show you that in nine months they were able to pull together.

Analysis

Nvidia's growth forecast has surprised the market, with supply commitments more than doubling in the last quarter, indicating strong demand despite potential supply constraints. Analysts suggest that if supply issues persist into 2027, it could extend growth cycles into 2028, highlighting the importance of capacity expansion in the semiconductor industry.

The competitive landscape for Nvidia may shift significantly by 2028, as other tech giants like META and Google are ramping up their own AI capabilities. This suggests that while Nvidia currently leads, the evolving competition could impact its market position and growth trajectory in the coming years.

12:23
PDT

Nvidia's stock surged after a strong long-term growth forecast.

Nvidia Jensen Huang Antoine Schuybein New Street Research AI NVDA

– Supply commitments more than doubled in the last quarter.

– The company is balancing supply constraints while leveraging them for growth.

– Nvidia's growth guidance for next year is set at 70%.

– Strategic supply chain management is crucial for Nvidia's competitive edge.

supply chain riskAI sector growth

▸ Full transcript

Shares of Nvidia surged on the day after the company posted a long-term growth forecast that caught everybody by surprise. Our next guest, though, says scarcity is the only reality right now in the AI build-out as these giants look to speed up in this race. Antoine Schuybein joins us right now, equity research analyst covering technology infrastructure over at New Street Research. Antoine, I do want to start there with this scarcity idea. I mean, one number that popped out to me in that Nvidia report wasn't the revenue and earnings, but it was the supply commitments, which more than doubled in the quarter. Jensen Huang was very blunt about it. Basically, they're trying to get their hands on as many of the components as they need right now to take advantage of this. They get hit by that supply constraint, but of course, they're also benefiting from that supply constraint as well. What's the balance for them? Yes, thanks. Thanks for having me back on the show. I would say, you know, when you look at the pace at which Nvidia has been growing and the guide, the 70% guide for next year, it is tied to supply constraints. So it's very important.

Analysis

Shares of Nvidia surged following a long-term growth forecast that exceeded expectations, driven by a significant increase in supply commitments. The company is navigating supply constraints while simultaneously benefiting from them, highlighting the critical balance in their growth strategy.

The doubling of supply commitments indicates a strategic pivot to secure necessary components, which could signal a competitive advantage in the AI sector. Smart investors should note that Nvidia's growth trajectory is not just about demand but also about their proactive supply chain management amidst industry-wide constraints.

12:19
PDT

Ever Pure raised full-year sales guidance to over $600 million.

Ever Pure Charlie John Carlo S&P 400 S&P 500 AI

– Stock price increased over 50% year-over-year, with a 30% rise in the last quarter.

– The company has binding agreements with hyperscalers, ensuring future revenue visibility.

– Ever Pure aims to become a leader in data storage and management.

– The rebranding from PureSorge to Ever Pure signifies a strategic shift beyond storage.

data managementAI growthhyperscaler agreements

▸ Full transcript

Our core business continues to grow, and as I mentioned, we're growing well over 50% in that business right now. Then we have the AI portion of the business, which arguably is still relatively small in the enterprise environment. We do see that growing substantially. I think it's hard to predict exactly what will be broken out over time, but we have a lot of growth areas that are vying for the next big movement, if you will, in our total growth. Only about 30 seconds left, but I remember when you kind of came in and you had this big all-hands-on deck back in 2017 or whatever it was, and there was, when you were called PureSorge at the time, and there was a lot of talk about whether you would keep that name. You said, yeah, we'll keep it until we don't need to keep it. You changed the name nine years later to Ever Pure. What does Ever Pure signify that PureSorge did? It signifies two things. First of all, that we've now grown beyond just storage. Now, storage is still very important to us, to be clear. But now we are going after the data management portion of the business, enabling customers to make better use of their data by cataloging it, classifying it, creating context around it, and then allowing customers to understand what's the source of truth from within their own data environment. We're going to get to a point where we call data primacy, which we've written a document on now.

Analysis

Shares of Ever Pure fell despite the company beating estimates and raising its full-year forecast, indicating market skepticism despite strong performance metrics. The CEO highlighted significant growth in their core business and a strategic shift towards data management, which could position them favorably in a competitive landscape.

Investors should note the binding nature of agreements with hyperscalers, providing visibility into future sales through 2028. The company's ambition to expand beyond storage into data management reflects a broader trend in the tech sector, potentially unlocking new revenue streams and enhancing competitive advantage.

12:17
PDT

Ever Pure's stock price has increased over 50% year-over-year.

Ever Pure Charlie John Carlo S&P 400 S&P 500 S&P 400 S&P 500

– The company is on track for potential inclusion in the S&P 500.

– Ever Pure has consistently beaten earnings expectations for eight consecutive quarters.

– Long-term agreements with hyperscalers provide revenue visibility through 2028.

– The company aims to grow annual revenue to $5 billion, with a total opportunity exceeding $10 billion.

market positioninggrowth potential

▸ Full transcript

Really what's important to us is seeing that we're not only doing well because of the general uplift of the market, but we're doing extraordinarily well because our competitive stance is just so much better than it was even a few years ago because of the investments that we've made in our business. Speaking of that growth and that market share, you were mentioning how much the stock price has grown. You're actually now one of the largest companies in the S&P 400, one of the largest eligible to move up into the S&P 500 when they announce their index changes in just a few weeks. What would it mean for the company to get added to the S&P 500? It would be a source of pride, I think, for the company. Of course, it brings on new responsibilities. Frankly, our ambition is to be the largest vendor in not just data storage, but data storage and management with our customers. That's a huge opportunity ahead of us. We just guided to a $5 billion a year. That opportunity is 10 billion plus, in terms of total opportunity. And getting into the Standard and Poor's 500 is the next step on the ladder, if you will, but lots of steps beyond that. So we have very high ambition and frankly, we have the track record of beating and raising for the last eight quarters, consistent beats and raises, and we expect to continue to do that. Is there any sense here though? I am curious about me.

Analysis

Ever Pure's stock has surged over 50% year-over-year, positioning it as a potential candidate for inclusion in the S&P 500. The company has consistently beaten earnings expectations for the last eight quarters and is targeting a $5 billion annual revenue, with ambitions to exceed $10 billion in total opportunity.

The competitive advantage gained from strategic investments is significant, as Ever Pure has secured long-term agreements with hyperscalers, providing visibility into future sales through 2028. This solidifies their market position and could attract institutional investors if added to the S&P 500, enhancing liquidity and credibility.

12:14
PDT

Ever Pure's stock has increased significantly, up over 50% year-over-year.

Ever Pure Charlie John Carlo NVIDIA

– The company has secured binding agreements with hyperscalers, ensuring revenue visibility until 2028.

– Despite strong performance, the market remains cautious due to broader economic conditions.

– Long-term contracts with hyperscalers may attract institutional investors.

– Consumer spending is under pressure, impacting overall market sentiment.

long-term contractshyperscaler growthconsumer spending

▸ Full transcript

You put those together. I mean our growth rate is just incredible right now. And you know no one can really explain on the day to day but we're up about over 50% year over year in terms of our stock price. Just in the last quarter we're up at least 30%. So you know we've seen a lot of stock price improvement so trading on a daily basis is a fool's guess. Yeah absolutely but with regards to the longer term story and the longer term agreements and the hyperscalar deals that you're adding. Can you give us a sense here as to whether those deals are binding or at least have some sort of minimum purchase commitment in them that would be binding that would make investors comfortable with regards to meeting longer term targets? Oh yeah I mean these are not you know when you put together agreements with hyperscalars that you know you're not doing it on a weekly monthly quarterly basis you're putting together annual agreements that are commitments on both sides for a period of time. And we have visibility out to 2028 in terms of what sales of our solution are going to be in those hyperscale environments. So they are based on contracts. So they're solid as far as we're concerned now because we currently have two hyperscalers signed up and because we are being very cautious with what they consider their intellectual property, the amount of those sales. We're not very explicit in that but we are talking about tens of exabytes.

Analysis

Ever Pure's stock price has surged over 50% year-over-year, with a 30% increase in the last quarter, despite a challenging market environment. The company has secured long-term agreements with hyperscalers, providing visibility into sales through 2028, which should reassure investors about future revenue stability.

The binding nature of these agreements indicates a strong commitment from both parties, suggesting that Ever Pure's growth trajectory is underpinned by solid contracts rather than speculative trading. This long-term visibility could attract institutional investors looking for stability in a volatile market, especially as consumer spending shows signs of strain.

12:12
PDT

Ever Pure reported a 38% increase in revenue.

Ever Pure Charlie John Carlo Bloomberg Gisec Global AI EMS CEO Middle East Ann Marie Houdur PRIVATE USDCNH

– The company raised its full-year sales guidance to over $600 million.

– Shares fell despite beating estimates, indicating market skepticism.

– Consumer spending concerns may be impacting stock performance.

– Broader macroeconomic factors are influencing market sentiment.

consumer spendingearnings performancemacroeconomic factors

▸ Full transcript

As genetic AI transforms decisions, as quantum unlocks new possibilities, every breakthrough demands a cyber-first mindset. That's why the future meets at Gisec Global, the Middle East and Africa's largest cybersecurity event. We shape policy and power innovation. We protect the digital order. This is it. The trade that will make your number. And with next-generation speed, automation, and integration, this is the new fixed income EMS that will make sure you win it. More from your execution management system. Bloomberg, TradyMS. Bringing you up-to-the-minute geopolitical news whenever and wherever it happens. I'm Ann Marie Houdur in Beijing, China, and this is Bloomberg. Welcome back. Shares of computer storage company Ever Pure are down on the day, despite the company beating estimates and raising its full-year forecast as it gets a boost from the hyperscalers. Joining us right now is the chairman and CEO of Ever Pure, Charlie John Carlo. Hey, great to have you here, Charlie. Let's first start off talking about it. I mean, it was a good quarter, a 38% jump in revenue. You raised the full-year sales guidance up to around, I think, what, $600 million above that midpoint here? It gets to a lot of questions, though, as to sort of what were the expectations coming into this quarter and what.

Analysis

Ever Pure's shares declined despite a strong quarter, with a 38% revenue jump and raised full-year sales guidance to around $600 million. This signals potential market skepticism about future growth expectations despite positive earnings results.

Smart money should note the disconnect between strong earnings and stock performance, indicating broader market concerns about consumer spending and macroeconomic factors that could overshadow individual company successes.

12:09
PDT

Nvidia's performance is driving market gains.

Nvidia Drunken Miller Wall Street Journal NVDA

– Other stocks are rising due to their ties to Nvidia.

– There is a general aversion to long-duration assets.

– Market strength is not widespread without Nvidia.

– Investors may need to reassess concentrated positions.

market concentrationlong-duration assets

▸ Full transcript

So I think the Bonn-Vinjalantes might actually help keep a lid on it and foresee issue. You had the Wall Street Journal op-ed from Drunken Miller. So I think that if you do see POCs, that will actually like all of the rhetoric will start to get people to pay attention to it. And that may be a stepping in point. But I still don't like being long duration personally. Well, no one seems to like being long duration these days, whether it's in the fixed income market or equities as well. But it's kind of seem like on a day like today where Nvidia surprises and then you see how concentrated the rally is. I put that in quotation marks because it's basically if it weren't for Nvidia we'd be in the red. But every other company that's higher is basically has a direct link to Nvidia.

Analysis

Nvidia's surprising performance has led to a concentrated rally in the market, with other stocks rising primarily due to their direct links to Nvidia. However, without Nvidia's influence, the broader market would likely be in the red, indicating a lack of widespread strength among equities.

Smart money should note the growing aversion to long-duration assets, as both fixed income and equities are facing headwinds. The reliance on Nvidia for market gains highlights a potential vulnerability, suggesting that investors may need to reassess their positions if this concentration continues.

12:06
PDT

HP Inc. reported a 16% drop in PC unit shipments, leading to a 4.5% decline in shares.

HP Inc.NVIDIA Jensen Huang Apple Amazon Qualcomm Dick's Sporting Goods Abri company Fitch Robinhood Strategies Gold AI DXY GC=F

– Higher memory prices are impacting consumer electronics pricing and demand.

– NVIDIA's strong revenue growth forecast contrasts with broader market concerns about inflation.

– Investors are focusing on free cash flow as interest rates remain high.

– Gold is being considered as a store of value amid concerns over the dollar.

consumer spendingAI dominancefree cash flowstore of value

▸ Full transcript

They're already seeing a slowdown in computer sales, which is kind of weird heading into the school year and the holiday season. Because, yeah, I mean if you think about it, like I also, I mean there's a couple of things I've bought recently that I've been shocked by the price. But I think there's, yes, the consumer, you can even see in the earnings, like some of them are doing really well. I think people just have limited income and they're just picking their spots in terms of the brands that they use. You saw that with Abri company and Fitch versus Dick's Sporting Goods, right? I think the consumer definitely needs to try to hang on, but I don't know if that's going to be the driving force to the market because the market is so dominated by this AI theme and I just don't know if that's going away. But I do think free cash flow is going to matter in an environment where interest rates are unlikely to fall anytime soon. You know we've been talking about the debasement trade a lot and what it means for where investors really should be positioning against the risk that the dollar no longer becomes a reliable store of value. What are your thoughts on that? I just wrote a piece, The Value of Store of Values for Investors Guild is my weekly blog. I was actually talking about this and I said like the store of value is the first thing they go usually and then the other things like the transactional aspect of money takes longer. I do think gold is something that everyone should be considering as a store of value. We've in Robinhood Strategies added to gold in the last week or two. We also have materials names in our portfolio.

Analysis

HP Inc. shares fell 4.5% after reporting a 16% decline in PC unit shipments, raising concerns about the impact of higher memory prices on consumer demand. Despite overall revenue growth, investors are wary of the long-term implications of increased pricing in the tech sector, particularly as inflation concerns mount.

The AI theme continues to dominate market sentiment, but the slowdown in consumer spending and rising interest rates could challenge this narrative. Smart money should consider the implications of free cash flow in a high-rate environment, as companies may struggle to maintain profitability amidst rising costs and shifting consumer preferences.

12:04
PDT

NVIDIA's sales growth expectations for 2028 have increased significantly.

NVIDIA Jensen Huang US Treasury US corporate copper AI US NVDA FEDFUNDS

– Free cash flow from NVIDIA is half of what was anticipated.

– Corporate bond issuance is now a net nuisance of $3 trillion, surpassing treasury issuance.

– The commodities market may reflect broader economic demand trends.

– Stock buybacks are occurring despite cash flow concerns.

AI tradecorporate bond issuancecash flow concernscommodities market

▸ Full transcript

When you look at our earnings report that we got out of NVIDIA, which seems to suggest that the AI trade will go on, but you have to stack that up with all the other factors going on out there. Is there a case to be made for that AI trade, or should we be paying a little bit more attention to the Fed and rates and all the macroeconomic factors surrounding us? I think it's all intertwined, because I think NVIDIA is turning into a bank if you look at the details of their financing. And you saw, you know, their free cash, like, yes, I think the thing that moved them was the huge increase in 2028 sales growth expectations. But if you look at their free cash flow, it's half of what was expected. And then you add in stock-based compensation from that or take it away, I should say. And they're doing buybacks, yes, but I just think like, if you don't have them as backstopping things, then, you know, there will be a dissipation. The one place that this is showing up obviously everywhere and starting to really be consistent is in the commodities market. Because if that demand starts to die down there, then I think that's a sign that the diet is dying down everywhere since it feeds like copper feeds into this stuff. But I think that it matters because if you think about the issuance of US corporate versus treasuries, so treasuries have been consistently like around an additional two trillion a year. If you look at US corporate this year for the first time in like at least a decade. It's a net nuisance of three trillion. So it's more than the US Treasury, so there's a competition.

Analysis

NVIDIA's earnings report indicates strong expectations for AI-driven sales growth, with projections for 2028 sales significantly raised. However, concerns arise as their free cash flow falls short of expectations, suggesting potential vulnerabilities in sustaining this growth amidst macroeconomic pressures.

The interplay between corporate bond issuance and treasury issuance is noteworthy, with corporate bonds now outpacing treasuries for the first time in a decade. This shift could signal a competitive landscape for capital allocation, impacting liquidity and investment strategies across sectors.

12:02
PDT

Nvidia forecasts 70% revenue growth through 2028.

Nvidia Jensen Huang Amazon Apple Qualcomm Kevin Warsh Jackson Hole Symposium Fed AI Fed Chair NVDA AMZN AAPL S&P FEDFUNDS

– Supply constraints are maintaining pricing power for Nvidia and peers.

– Concerns about inflation fatigue could affect spending.

– Equity market volatility is diverging from bond market volatility.

– Upcoming Fed Chair speech may influence market sentiment.

AI demandpricing powerinflation concernsmarket volatility

▸ Full transcript

That rally in Nvidia, which is a little bit less about the quarter that just passed and a little bit more about the longer-term guidance: 70% revenue growth all the way out to 2028? How about that? Putting a growth rate on a fiscal year that doesn't even start for another year and a half is a bullish signal that the fulcrum for this AI trade sees no let-up in demand anytime soon. But here's the wrinkle: Jensen Huang also made it clear that he doesn't actually see any let-up in the supply constraints that for right now are giving him and other component makers massive pricing power. Nvidia has already raised prices. Amazon, Apple, Qualcomm, the name of a few. They've also let folks know that price hikes are coming their way too. And that's raising questions about inflation fatigue that could upend both corporate and consumer spending. So maybe that's why, on a day where Nvidia heads for its biggest post-earnings day gain in about nine quarters, the vast majority of the rest of the equity market is underwater. So you have a market on the S&P that at the top of the house is going to be much more influenced by the actions of the bond market than they have been in the past simply because of the issuance that we've seen. And I can tell you that right now there is this pretty big cognitive dissonance in the market between equity volatility and bond volatility that does not typically stay that way. You're going to see some sort of reconciliation. And that is the setup for Kevin Warsh, who on Friday will deliver his first speech from the Fed's Jackson Hole Symposium since taking over as Fed Chair.

Analysis

Nvidia's stock is poised for its largest post-earnings gain in nine quarters, driven by a bullish long-term revenue growth forecast of 70% through 2028. However, CEO Jensen Huang highlighted persistent supply constraints that are enabling significant pricing power for Nvidia and other tech giants, raising concerns about inflation fatigue impacting consumer and corporate spending.

The market is currently experiencing a disconnect between equity and bond volatility, which is unusual and suggests a potential reconciliation ahead. This dynamic could be influenced by upcoming remarks from Fed Chair Kevin Warsh at the Jackson Hole Symposium, as the equity market becomes increasingly sensitive to bond market actions.

11:59
PDT

Wendy's shares down 6% after six quarters of declining sales.

Wendy's Bloomberg Intelligence David Garra CEO TV Bloomberg Business Week Solardia Unia PRIVATE AAPL

– Analysts expect continued sales declines despite new CEO.

– Bloomberg Intelligence sees potential for improvement under new leadership.

– Investor sentiment remains negative following a brief stock spike.

– Concerns about the sustainability of the business model persist.

leadership changesales performanceinvestor sentiment

▸ Full transcript

The value of the stock, and if you're in the valuation, investors have to focus on the fundamentals here that six straight quarters of declining comparable sales. That's analyst expectations for those declines to continue. They do have a new CEO; we'll see if they can turn things around in their own, but right now investors are not happy and didn't the shares kind of spike up earlier in August because they thought this was going to happen? They, and you know, that we were back to a very new beleaguered stock. And again now they're kind of on their own. Bloomberg Intelligence actually said that those same-store sales metrics could improve under the new leadership team even without a bid. But this stock had been green year to date after that earlier report, and now today back in the red down 6%. In 2026, an entire discussion of Wendy's and no mention of a square like this. Check out our stock movers podcast; they're five-minute episodes on the biggest winners and losers in the stock market. Check out stock movers on Apple, Spotify, or anywhere you get your podcast. If you're sticking with us on TV, they close us up next. Bloomberg Business Week continues on radio. Bringing you the latest geopolitical news whenever and wherever it happens. I'm David Garra on the Solardia Unia in Bolivia, and this is Bloomberg. The countdown is on. Everything you need to get the edge at the end of.

Analysis

Wendy's shares fell 6% after six consecutive quarters of declining comparable sales, with analysts expecting this trend to continue despite a new CEO. Bloomberg Intelligence suggests that same-store sales metrics could improve under new leadership, but investor sentiment remains negative as the stock has reverted to red after a brief spike earlier in August.

Smart money should note that while leadership changes can signal potential recovery, the persistent decline in sales raises questions about the underlying business model. The market's reaction indicates a lack of confidence in the turnaround potential, suggesting that investors are cautious about the stock's future performance.

11:57
PDT

HPQ shares down 4.5% after shipment decline.

HP Inc.Apple Mark SAS Pocalypse SAS CEO AI HP HPQ PC HPQ AAPL

– 16% drop in PC unit shipments reported.

– Higher memory prices impacting consumer electronics.

– Apple also raised prices on certain products.

– Investor concerns about long-term pricing effects.

pricing pressureconsumer electronicsmemory chip demand

▸ Full transcript

I think it's good to prove again some of these what we sometimes call the SAS Pocalypse fears. Their CEO Mark spoke about this on the earnings call; he got right into it and said the SAS Pocalypse is nonsense. Now, I don't think investors are fully giving him the benefit of the doubt on that yet; shares are still down on a year-to-date basis, but this definitely helps. I saw the SAS Pocalypse and thought, how do you say that? Thank you for that. We are seeing maybe one of the dark sides of the AI rally in the broader market, which is these higher memory prices, because there's so much demand for memory chips. Today, HP Inc. (ticker: HPQ) is down 4.5% after they reported that their unit shipments had fallen 16% in the PC business. The connection there is they've had to raise their prices in conjunction with those memory chips going up in price. Even as revenue grew overall in the PC business, and even as they gave generally good overall results and an outlook, investors are worried about what those higher prices are going to mean in the long run. If we think about it just from a consumer perspective, it means higher prices for us for certain products. Look no further than what Apple announced earlier this summer, that they're going to be raising prices and they have raised prices on certain products.

Analysis

HP Inc. (ticker: HPQ) shares fell 4.5% after reporting a 16% decline in unit shipments in the PC business, attributed to rising memory chip prices. Despite overall revenue growth and a generally positive outlook, investor concerns about the long-term impact of higher prices are evident.

The connection between rising memory prices and consumer electronics pricing is critical. As companies like Apple have also raised prices, the broader implications for consumer spending and demand in the tech sector could be significant, suggesting a potential slowdown in growth as costs rise.

11:55
PDT

Susan Collins views current rates as mildly restrictive.

Federal Reserve Bank of Boston Susan Collins U.S. economy Kansas City Fed Bloomberg News Mike McKee Jack Manley Kevin Warsh Jackson Hole Maria Eluisa Capuro Federal Reserve Bank Boston President Susan Collins PRIVATE FEDFUNDS

– Interest rates are impacting smaller businesses and the housing market.

– Inflation data is mixed, with some unexpected increases.

– Upcoming speeches from Fed officials may provide further insights.

– Market reactions may be influenced by the Fed's cautious approach.

Fed policyinflation trends

▸ Full transcript

Video, but it's also about what's happening in Jackson Hole. And on that, we have some new reporting from our Bloomberg News team out. Maria Eluisa Capuro is out with a story about how Federal Reserve Bank of Boston President Susan Collins is saying there's still evidence that the central bank's current policy setting is restraining the U.S. economy and helping slow inflation. Here's what she said Thursday in an interview with Bloomberg News on the sidelines of the Kansas City Fed's annual economic symposium. She says, quote, "I continue to see rates as mildly restrictive," the Boston Fed chief said. She sees rates holding back smaller businesses and the housing market even as she described the latest inflation data as mixed. She said the overall headline number was maybe a bit higher than I expected; at the same time, when you unpack it, it seemed more consistent with what I might have expected. And this is going to be the talk. This is it. Yeah. And we spoke a little bit earlier to Mike McKee, who's there on the sidelines. We also had Jack Manley, global market strats over, and we're going to be continuing our coverage of Jackson Hole. And of course, tomorrow, be sure to tune into Federal Reserve Chair Kevin Warsh's speech tomorrow morning. Be sure to tune into that on Bloomberg television and Bloomberg Radio. Let's take a look at some stocks on the move today. I'm Tim Stanowek with Lisa Matteo. We're joined by Bloomberg News U.S. equities reporter Matthew Griff, and hey, Matt. Hey Tim, how's it going? Good so far, so good with one that's doing pretty well.

Analysis

Federal Reserve Bank of Boston President Susan Collins indicated that current monetary policy is restraining the U.S. economy and contributing to a slowdown in inflation. She described interest rates as mildly restrictive, impacting smaller businesses and the housing market, while noting mixed inflation data that was slightly higher than expected.

Smart money should note that the Fed's cautious stance may prolong the current economic environment, affecting sectors sensitive to interest rates. The mixed inflation data suggests that while inflation pressures persist, the overall economic outlook remains uncertain, which could influence future Fed decisions.

11:53
PDT

Former athletes face challenges transitioning to business.

Steve Sherry Yon Heidi Stradwater Tokyo Sydney Bloomberg TV Bloomberg Business Week Daily PRIVATE

– Success in sports does not equate to business success.

– Starting from the basics is crucial for new ventures.

– Athletes are increasingly leveraging their fame in business.

– Investment opportunities may arise from athlete-led startups.

athlete business transitioninvestment opportunities

▸ Full transcript

What are you great at? And the truth is nothing, right? I'm not great at anything else. I talk about it all the time, Steve, is this whole idea of it's not from penthouse to penthouse. And what I mean by that is you played for 15, 20 years, and you're in the penthouse. That doesn't mean that you come to the business world and you're gonna be in the penthouse. You don't start in the third floor or the lobby. You actually have to start in the basement. Asia is at the forefront of some of the world's biggest stories. I'm Sherry Yon in Tokyo. Tokyo and I'm Heidi Stradwater here in Sydney where the trading day begins. We're here in the center of all the action to get you set up with the numbers, news, and knowledge you need for the day ahead. The demand is indeed recovering. We've been waiting for this moment. The opportunity of a centrate. Join us on Bloomberg the Asia trade weekdays only on Bloomberg TV. Context changes everything. The countdown is on. Everything you need to get the edge at the end of the market day. Get ahead of tomorrow's trading with the close. Weekdays on Bloomberg. Context changes everything. This is Bloomberg Business Week Daily with K-

Analysis

The discussion highlights the transition of former athletes into the business world, emphasizing that success in sports does not guarantee immediate success in business. It underscores the need for a grounded approach, starting from the basics rather than assuming a high position due to past achievements.

Smart money should note that the narrative reflects a broader trend of athletes leveraging their fame into business ventures, which may lead to increased investment opportunities in athlete-led startups. This shift could signal a growing market for businesses that cater to the unique experiences and insights of former athletes.

11:48
PDT

Meta agrees to pay up to $18 billion in a settlement focused on child safety.

Meta California Attorney General Rob Bonta West Virginia Attorney General JB McCuskey Australia United Kingdom United States US

– The settlement includes design changes to limit engagement of users under 18.

– This could initiate a broader shift in accountability for social media companies.

– The settlement draws parallels to historical tobacco litigation regarding addiction.

– International implications remain uncertain as regulatory efforts vary by country.

social media regulationchild safetycorporate accountability

▸ Full transcript

Those protections for children become even more stringent, and there's an increase in the amount of money that's paid. So this really could be the beginning of a shift for all the social media companies. You say it's the beginning. It could be the beginning of a shift. What does the shift ultimately look like from your view? Well, I think it changes the way that the companies rely strictly on engagement of children. They're being held responsible. It's the same thing that goes back to the tobacco settlement, which many people have made analogies through the big tobacco settlement in the 1990s. It's not a perfectly fair analogy, but one of the things alleged in that lawsuit by the attorneys general was that the product was designed to addict people. And that's what was happening with tobacco. It was designed to have the maximum capacity to get young people addicted, to get you addicted. Adults can make that decision with open eyes. Children can't. That's also part of this. These products are being designed to addict children. And now these companies, specifically Meta, will be held accountable. And really, really, I am hopeful this will be the beginning of a sea change. Now this is going to be happening for US users of the product. So what about internationally? I mean, did you cover any of that in the film? What's going on around the world? Like, you look at Australia, they tried to ban it, and it just didn't seem to work very well. There have been a series of different legislative moves all around the world. And the United Kingdom and Australia, not yet successfully here in the United States, although there has been movement.

Analysis

Meta's recent settlement with state attorneys general, involving a payment of up to $18 billion and significant changes to its platform, marks a pivotal moment in the accountability of social media companies regarding child safety. This could signal a broader shift in how these companies operate, particularly in their engagement strategies with younger users.

The implications of this settlement extend beyond Meta, as it sets a precedent for increased scrutiny and potential regulation of social media practices globally. Investors should note that this could lead to a reevaluation of growth strategies within the sector, particularly for companies that rely heavily on user engagement metrics.

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