Big Tech Earnings on Deck, Election Impact Across Assets | Bloomberg Technology

Earnings Reports and Market Trends

• Alphabet, AMD, and Reddit are set to report their earnings after the bell, with Alphabet being a major focus due to its significant spending on artificial intelligence and investors seeking signs that this spending will translate to growth 1m51s.
• The "Trump trade" is being discussed, with some believing it could be a signal for risk-on assets, and Bitcoin is currently trading at its highest level since March of this year 1m0s.
• Tesla has experienced volatility, and Elon Musk has stated that if Trump is re-elected, he is more optimistic about achieving his lofty goals for SpaceX and Tesla 1m37s.
• PayPal has given guidance that missed expectations, which will be discussed later in the show 1m43s.
• Alphabet's stock has been disappointing for many investors, with a sideways movement in its shares as investors struggle to price in antitrust risks and other challenges facing the company 2m31s.
• Advertising seems to be strong for Alphabet, which is key for its search business, but the antitrust and regulatory picture is unclear, with rulings against the company and uncertainty about the impact and severity of any punishment 2m57s.
• Profit expectations for companies reporting this week are still high, with earnings growth strong but decelerating, and some major index components being expensive relative to their history, leaving limited room for error 3m53s.
• The bar is high for this week's earnings reports, with slowing growth and high multiples, and investors are looking for signs that companies can meet or exceed expectations 4m11s.
• Artificial intelligence is seen as a multi-year, if not multi-decade, force that will have a significant impact on the economy, and investors are looking beyond individual earnings reports to see the broader landscape shift 4m54s.
• The market responds in various ways when hyperscalers discuss capital expenditures (CAPEX), and the next 24 hours will be interesting as companies report their earnings and provide guidance on their spending plans 5m23s.

Artificial Intelligence and Investment Opportunities

• The spending on CAPEX is focused on conductor companies, data centers, power infrastructure, and other areas that will support the growth of artificial intelligence and other technologies 5m38s.
• Actively managed strategies are being launched to take advantage of revenue opportunities in artificial intelligence, focusing on the infrastructure of AI where the money is spent 5m49s.
• Many leaders in Saudi Arabia believe NVIDIA is undervalued, and there is a need to broaden out the investment picks in the AI value chain to find opportunities 6m6s.
• The AI value chain includes AI infrastructure, such as semiconductors and power infrastructure, data centers, and the applications layer, where companies are embracing AI to build revolutionary products and applications 6m34s.
• The applications layer is expected to see significant growth over the long-term, and active management can be powerful in picking and choosing opportunities across the tech stack 6m52s.
• A recently launched actively managed ETF focuses on digital infrastructure, where spending by hyperscalars is creating immediate opportunities, but it is a highly concentrated opportunity 7m37s.
• Another ETF, TDK, is broader, covering the full spectrum of the AI value chain, including the semiconductor space, where NVIDIA and AMD compete 8m3s.
• The function of an ETF is important in getting the full benefit of the AI value chain, as it delivers a whole basket of stocks that will benefit from the opportunity 8m32s.
• Despite short-term volatility due to earnings and the US election, investing in AI is a long-term play that will play out over multiple decades 9m4s.

The "Trump Trade" and Media Landscape

• Elon Musk participated in a surprise conversation, discussing the future of AI, solar energy, and why he thinks a Mars launch of a Starship is more likely under a Trump presidency 9m49s.
• Shares of Trump Media were suspended after rising as much as 21% in premarket trading, later resuming, due to the "Trump Trade" and the parent company's social media platform 10m32s.
• Donald Trump owns about 60% of the stock in a company that trades closely with betting odds, and recent volatility in the stock has been overwhelming, with volumes about six times the normal in the first hour 11m11s.
• The stock's activity is emblematic of what has been tracked since the deal was announced in October 2021, with the stock generally trending upward despite volatility 11m57s.
• The "Trump trade" has also involved other names, including a Peter Thiel-backed video platform that is skewing toward a more conservative audience and trying to rally against big tech 12m27s.
• Truth Social, a platform owned by the company, is one of the places where Donald Trump will post, and the company reported about $1.6 million in sales in the first half, a drop in the bucket relative to its multibillion-dollar market valuation 13m15s.
• The company has struggled to maintain users and is struggling to get anywhere near turning a profit, with all eyes now on Trump's reelection campaign 13m59s.
• Jeff Bezos defended the Washington Post's decision to stop endorsing presidential candidates, citing a credibility cap and the potential perception of bias, which prompted around 200,000 subscribers to cancel 14m20s.
• The Washington Post has a history of endorsing candidates dating back to Jimmy Carter's presidential run, and the decision to stop endorsing candidates 11 days before the election has raised concerns about the appearance of bias 15m6s.
• The decision to stop endorsing candidates has been seen as an attempt to avoid the perception of bias, but it has also been criticized for carrying the appearance of doing exactly what Bezos is trying to avoid 15m41s.
• The significance of the action lies in the fact that Jeff Bezos, a rich person in the world of technology, owns the Washington Post, and the decision to stop endorsing candidates has raised questions about the role of media ownership in shaping public opinion 15m57s.
• The recent election has had a historic number of surprises, and a significant development has caught the attention of Kamala Harris, who expressed disappointment and tied Jeff Bezos to Donald Trump and other billionaires, saying they are the people Trump is likely to support rather than mainstream Americans 16m10s.
• Analysis indicates more billionaires have donated to the Trump candidacy than non-billionaires, and in the tech industry, there is a reversal of polarity, with more wealthy tech founders, such as Eric Schmidt and Bill Gates, supporting Kamala Harris 16m55s.
• One billionaire, Peter Thiel, has been name-checking Donald Trump in Saudi Arabia, and his impact on the race cannot be overstated, having put over $132 million of his own money into a super PAC backing Trump and spending time on the campaign trail 17m20s.
• Thiel sees Trump as someone who can clear the path for his own ventures and aspirations, including a trip to Mars, and believes Trump can help with regulations if he were to return to office 17m40s.

Geopolitics and Tech Regulations

• The Biden administration has finalized plans to regulate American investments in the Chinese chip industry, with restrictions on investments by US individuals and companies into Chinese technology, including semiconductors and artificial intelligence 18m26s.
• An Indian food delivery platform is seeking shares for an IPO that may raise $1.35 billion, and Toshiba wants to reach double-digit market share in the world's power chip market, potentially forming an alliance that would corner 30% of the industry 18m58s.
• A liberal democratic party heavyweight was defeated in the general election in Japan, removing from parliament one of the chip sector's biggest advocates, and the Biden administration's restrictions on investments in Chinese technology are part of a broader effort to restrict Chinese advanced tech development 19m33s.
• The new policies are the last big shoe to drop from the restrictions on Chinese advanced tech development, with a narrowly targeted approach looking at technologies key to national security, and exemptions for certain investments, such as publicly traded securities or certain limited partner investments 20m9s.
• US officials briefed reporters on restrictions before they were announced, revealing that between 2015 and 2021, 17% of global transactions investing in Chinese AI companies involved American investors, with 9 out of 10 being at the venture capital stage 21m43s.
• The US restrictions aim to capture American capital and know-how going into early-stage investments in Chinese startups, and they are unlikely to change between now and January 2, when they come into force 22m13s.

Tech Company Updates and Product Launches

• The Nasdaq 100 is up about 0.5% and near trading highs for the day, with Cadence Design Systems doing well, posting revenue growth of about 19% due to AI and design workflow 23m38s.
• AMD is up more than 2% due to AI accelerators, raising questions about whether they are making inroads on Nvidia's market share in the server business 23m55s.
• PayPal disappointed with its revenue forecast, causing shares to drop after running up into the earnings 24m14s.
• Apple has overhauled the design of its Mac Mini desktop computer, cutting the device size to five inches across, making it super powerful and likely to be a hot seller 25m22s.
• The new Mac Mini is part of a series of launches, with the new MacBook Pro launching tomorrow, and is seen as a necessary move to meet market expectations for growth 25m46s.
• The Mac Mini is expected to sell around $1 billion through the end of the year, but is not considered a super material watch for Apple from a financial standpoint 26m8s.
• India is becoming an important part of the overall Apple story, with potential for more product development to happen in the country 26m51s.
• Apple is shifting its focus towards India as an alternative to China, with companies like Wells and Engineering Labs testing in India, becoming a bigger part of the Apple story 27m0s.
• Netflix is set to release a remake of "The Chronicles of Narnia," which could be an interesting area for the company to push, having previously worked with film makers and embracing movie theaters 27m17s.
• Netflix is excited to work with Greta Gerwig to adapt the legendary series of children's books, but she wants to see the movies in theaters, so Netflix will try to work with her without violating her beliefs about putting movies on screens and streaming services promptly for customers 27m50s.
• Netflix's track record on the quality of movies is mid-to-poor, but people tend to watch them because they have a big budget and Netflix puts them in front of them 29m3s.
• Big-name filmmakers, like Greta Gerwig, want to see their movies in theaters, so they will mostly do that, and Netflix is often a temporary waystation for them, not a home 29m42s.
• Christopher Nolan seems to be at Universal for the foreseeable future 30m10s.

Inbrain: A Neuralink Competitor

• A computer interface company, Inbrain, is taking on Neuralink, having raised $50 million to develop its neural technologies 31m31s.
• Inbrain's technology sits on the brain, on the cortex of the brain, and has a deeper probe, able to decode information with the brain with specific biomarkers and actually restore such function 32m32s.
• Inbrain's CEO expects to see diseases like Parkinson's tackled soon, with the company already having treated two patients on its study and obtained FDA designation last year 31m55s.
• Bitcoin touched $72,000 at one point, close to the record high set in March of this year, and is up 3% 30m31s.
• InBrain is developing a technology that can decode and read brain signals, with $50 million allocated for the development and scaling of the technology, which will be used to continue clinical trials, onboard up to 10 patients for a safety trial, expand the team, and develop semiconductors and electronics 33m14s.
• The company is looking to recruit key talent, including experts in semiconductors and electronics, to continue developing the platform and bring a conversation to the medical community 33m54s.
• Venture capitalists are showing interest in investing in InBrain, particularly those from the deep tech community, who are willing to invest big time in the development of such ventures 34m39s.
• The regulatory environment in Europe is similar to that in the US, with InBrain regulated by medical device regulatory bodies, and the company is working to get a mark, which is a similar process to the one in the US 35m19s.
• The FDA has been supportive of InBrain's technology, with the company participating in the Breakthrough Designation Program, which allows for monthly discussions to address hurdles and questions in developing the technology at speed 35m41s.

SoFi Technology's Financial Performance

• SoFi Technology has raised its profit guidance, benefiting from efforts to expand beyond its student lending business, with the company reporting record adjusted net revenue in the quarter 36m24s.
• SoFi's CEO attributes the company's success to its efforts to diversify its business lines, with the company reporting its best quarter as a public company, record revenue, and accelerated revenue growth of 30% year-over-year 37m43s.
• SoFi's financial services and technology platform revenue grew 64% year-over-year, accounting for 49% of the company's total revenue, marking a historic day for the company as it approaches a 50-50 split in its revenue streams 38m0s.
• The business has reached a 50-50 profitability point, driven by 37% year-over-year growth in products, which is contributing to revenue growth 38m33s.
• Investors are looking for balance sheet growth along with low single-digit growth, but the company doesn't necessarily need to grow its balance sheet at that rate, as it has made a migration to more fee-based revenue streams 38m47s.
• The company's first large quarter generating business revenue was a big contributor to growth in revenue and profitability, and it doesn't need to grow the balance sheet faster than it has been growing 39m21s.
• About $175 million of revenue was from fee-based revenue, growing a meaningful amount year-over-year, and the company wants to take risk off the table and leverage other pieces of its business 39m38s.
• The company's Sofi Money business is benefiting from high interest rates and great growth in deposits, with $10 billion of spending, and it will continue to grow that member base 40m7s.
• The company's Invest business is growing year-over-year, and it also has a credit card business and a loan platform business that grew over 100% year-over-year, now at $1 billion 40m20s.
• The company will keep driving product and member growth in the 30% range, which will follow with revenue growth at or above that level over time 40m43s.
• The company feels good about the current environment, but is still bracing for an election, which feels like a lack of transparency, and is uncertain about the outcome 40m58s.
• The company is going into a declining rate environment, which will benefit several of its businesses, including its student loan refinancing business, which will allow people to refinance student loans at a lower rate 41m15s.
• The company's credit card business launched two new credit cards that meet the needs of members with a lot of growth prospects behind them 41m55s.
• The company is not focused on M&A, but rather on growing organically on a year-over-year basis, with balance sheet growth slowing down, and is focused on becoming a trusted partner in the business 42m8s.
• The company's brand awareness is key, and it has driven that up 40% year-over-year, with goals to get it into the 30% range 42m28s.
• The company's credit has continued to improve, with a peak in normalization, and it is vigilant in making sure it will be in a stable economy 42m47s.
• The company is braced for the election and can work with whatever administration it has 43m17s.
• Different characteristics could be more favorable for capital markets and businesses, and a more favorable treatment would be welcomed by them 43m20s.
• There is an opportunity that sometimes gets stifled by different approaches as it relates to capital markets from different agencies, and a good balanced approach from the winning administration is being looked for 43m27s.
• The administration is prepared to work with both ends of the aisle to achieve a balanced approach 43m43s.

Bloomberg Technology Show Conclusion

• The discussion comes to a close with appreciation for the guest's participation in discussing their earnings 43m45s.
• The episode of Bloomberg Technology comes to an end, with more earnings to come, and the podcast is available online on all major platforms 43m50s.
• The team from New York City and San Francisco invites viewers to stay with them throughout the week for more updates 44m12s.