September Market Recap & Micron’s AI Boom

>> THE COUNTDOWN IS ON. EVERYTHING YOU NEED TO GET THE EDGE AT THE END OF THE MARKET DAY. THIS IS "THE CLOSE." ROMAINE: THE INFLATION BATTLE AIN'T OVER, BUT A BENIGN PCE REPORT CERTAINLY A WELCOME SURPRISE. LIVE, I'M ROMAINE BOSTICK. EMILY: AND I'M EMILY GRAFFEO. LET'S TAKE A LOOK AT HOW MARKETS ARE TREATING AFTER THAT BENIGN PCE. WE DO HAVE THE EQUITY MARKET HIGHER, THE S&P 500 UP. THE S&P RALLYING. A LITTLE BIT OF RELIEF IN THE FRONT AND AFTER THAT SOFTER THAN ANTICIPATED REPORT. LOOK AT THE 30-YEAR YIELD. THAT IS CONFIRMING THE NARRATIVE THE INFLATION BATTLE IS NOT OVER YET. ROMAINE: THE S&P 500 EDGING HIGHER ON THE LAST DAY OF THE MONTH, BUT THE NARROW BRATS -- BREADTH INDICATIVE OF THE SLOPPY SEPTEMBER WE HAVE HAD. ALARMING AI HEADLINES ALL DRIVING PROCESS AT VOLATILITY AND A LOT OF INVESTORS TO THE SIDELINES. >> WE WILL LOOK BACK AT THIS QUARTER AS THE RATE SHOCK QUARTER. UTILITIES GOT CRUSHED. IF RATES DO BACKUP TO A CERTAIN POINT AND LEVEL OUT, WHERE ARE THINGS THAT HAVE ADDED SOME MORE VALUE? THE QUALITY VALUE IS BETTER MANTRA. OTHER THAN THAT WE ARE TRYING TO FIND OTHER THINGS AT TECH. MICRON AFTER THE CLOSE AND OF EARNINGS. WOULDN'T BE SURPRISED IF IT IS ANOTHER GREAT QUARTER. ROMAINE: IT WILL BE A GREAT QUARTER, POISED TO POST REVENUE GROWTH OF MORE THAN 300% AND INCOME GROWTH OF 1000. THE DEBATE FROM HOW GOOD CAN IT GET MOVES TO HOW LONG CAN IT STAY THIS GOOD. MICRON NEEDS TO CONVINCE INVESTORS THAT ITS PRICING POWER AND PROFITABILITY STILL HAVE PLENTY OF RUNWAY LEFT. THERE IS A RISK THAT WHILE INVESTORS HAVEN'T ABANDONED THE AI TRADE THEY HAVE MOVED ONTO THE NEXT BIG THING AND IT WHICH SEEMS TO BE AI AGENTS. MARK ZUCKERBERG'S ROLLOUT OF MUSE HAS PROPOSED META TO ITS BEST PERFORMANCE SINCE 2019. MICROSOFT SHARES ARE HEADED TO THEIR BEST PERFORMANCE. IT IS A SIGN THAT FOR SOME INVESTORS AGENTS HAVE BECOME THE APPLICATION LAYER AND ARE FINALLY BROADENING THE AI TRADE MAY BECOME A POTENTIALLY BE IN CHIPS, DATA CENTERS, AND BEYOND POWER. BLACKROCK SHIFTING TO LARGE-CAP NAMES THAT THEY SAY CAN BENEFIT AS AI ADOPTION SPREADS. MICHAEL GATES KICKS US OFF TO THE CLOSE. GREAT TO SEE YOU HERE. >> GREAT TO BE HERE. ROMAINE: WHERE ARE YOU LOOKING? >> WE HAVE KEPT IN OVERWEIGHT TO STOCKS AND KEEPING THE CONVICTION PLAYS IN THE PORTFOLIO. THE SHIFT WE ARE MAKING IS TO REDUCE THE MOMENTUM EXPOSURE TO THE MARKETS BUT WE ARE KEEPING THE AI BENEFICIARIES BASKET. AND WE ARE INCREASING EXPOSURE TO AI ADOPTERS, SO THINK OUTSIDE OF INFOTECH, THE KINDS OF FIRMS THAT ARE SEEING MARKET IMPROVEMENT FROM AI ADOPTION. ROMAINE: LIKE WHAT? A HEALTH CARE COMPANY OR A BANK? MICHAEL: EXACTLY RIGHT. ROMAINE: AS WE MOVE TO THIS NEXT PHASE OF AI ADOPTION, DO WE THINK IT WILL HAVE A BROADER BENEFIT FOR THE MARKET AS A WHOLE? MORE COMPANIES AS A WHOLE? IF YOU LIKE THIS RALLY HAS BEEN RELATIVELY NARROW AND THEN TO A CERTAIN EXTENT YOU HAVE THE POWER COMPANIES, ETC. MICHAEL: YOU CANMICHAEL: LOOK AT EARNINGS GROWTH FOR THE MEDIAN S&P COMPANY UP ABOUT 12%. IT IS NOT AS GOOD AS THE OVERALL EARNINGS. WE HAVE SEEN THE BIG CAP COMPANIES DELIVERING STRONG RESULTS. ENERGY DELIVERING STRONG RESULTS. EMILY: WHAT DOES IT MEAN FOR THE BIG CAP AI NAMES THAT YOU ARE REDUCING EXPOSURE? IS IT MORE ABOUT TAKING PROFITS? OR WILL THESE STOCKS HE OF PULLBACK SOON? MICHAEL: AI AS A PORTION OF THE MARKET CAP HAS INCREASED SUBSTANTIALLY THIS YEAR SEE YOU CAN THING ABOUT SEMI CONDUCTORS AS AN INDUSTRY AS 18% OF THE S&P 500, IT WAS 13% AT THE START OF THE YEAR. YOU'RE GETTING MORE EXPOSED AS PART OF YOUR CORE EXPOSURES. THEN THERE WAS A SIGNIFICANT PICKUP OF THE VOLATILITY. WANTING TO KEEP INVESTORS IN THE THEME AND FEELING COMFORTABLE WITH THE AMOUNT OF RISK IN THE PORTFOLIOS. EMILY: I WANT TO PIVOT TO FIXED INCOME BECAUSE YOU'VE MADE SOME SHIFTS ALSO. WITH RATES THIS HIGH ARE BONDS STILL A GOOD DIVERSIFIER FOR EQUITIES? MICHAEL: WHAT IS INTERESTING IS WITH THE GOVERNMENT BOND YIELDS AS HIGH AS THEY ARE NOW, YOU CAN GET A NICE KERRY IN YOUR PORTFOLIO WITHOUT PUTTING IN INVESTMENT GRADE CREDIT RISK. WE PREFER TO TAKE ON THE MORE CYCLICAL RISKS. THROUGH EQUITIES. WE HAVE PORTFOLIOS SHOULD SITTING A LITTLE BIT SHORT WITH RATE DURATION. AND OVERALL CREDIT RISK. ROMAINE: IF I UNDERSTAND THAT RIGHT, YOU PREFER SOVEREIGNS OVER CORPORATE'S IN THIS ENVIRONMENT. MICHAEL: AT THIS MOMENT. IT IS SPREAD ON AN INVESTMENT GRADE INDEX AT 90 BASIS POINTS. PRETTY LOW RELATIVE TO HISTORY. ROMAINE: GIVE ME A SENSE WHEN IT COMES TO RATES AND THE INTERPLAY BACK INTO EQUITIES. IF YOU ARE CLIPPING A COUPON, MUZZLE TOV, GREAT TIMES FOR YOU RIGHT NOW. AT ONE POINT DO YOU HAVE TO WORRY ABOUT THE NEGATIVE CORRELATIONS AND THIS IDEA THAT AT THE BENCHMARK 10 YEAR, DOES IT START TO WORRY WHAT ALL OR ARE WE NOWHERE NEAR THAT LINE IN THE SAND? MICHAEL: IT HAS A DUAL ALLEGED ASPECT. THE HIGHER STARTING YIELD GIVES YOU A BETTER RETURN. THE MULTIPLE ON STOCKS HAS BEEN MOVING INVERSELY WITH THE BOND MARKETS. ESPECIALLY SINCE JUNE THERE HAS BEEN A TIGHT CORRELATION WITH THE EQUITY MULTIPLE AND THE SHORT AND RATES. IT IS A CONCERN AROUND POLICY AND POLICY HAS BEEN CORRELATED WITH THE CRUDE OIL MARKET PRICINGS. IT IS DRIVING A PHENOMENON THIS YEAR. STOCK MARKET IS ONLY UP 13, 12%. PE MULTIPLES HAVE BEEN COMPRESSING. ROMAINE: I SAW YOU EXITED AND THEN PIVOTED TO WHEN ACT OF STRATEGY. WHAT IS EXCITING TO YOU OUTSIDE OF STOCKS AND BONDS? MICHAEL: THESE ACTIVE STRATEGIES CANNOT DIVERSIFICATION ANOTHER ONE HAS BEEN FINDING A SKILLED LIQUID ALTS MANAGER. PUTTING THEM SOME PORTION OF LIQUID ALTS. THAT HAS BEEN CREATIVE TO OUR PERFORMANCE. ROMAINE: MICHAEL, GREAT TO HAVE YOU. KICKING US OFF TO THE CLOSE. WHEN WE RETURN WE GO BACK TO THE DISCUSSION ABOUT AI AGENTS AND A BIG ANNOUNCEMENT EARLIER TODAY FROM THE ROBINHOOD CEO WHO WILL BE JOINING US IN SUCH -- AND JUST A MOMENT TO DETERMINE HOW AI IS NOW A KEY COMPONENT OF ROBINHOOD'S PLATFORM. EMILY: WE WILL HAVE FULL COVERAGE OF MICRON EARNINGS AFTER THE BELL INCLUDING ERICA BRESEE A AND THE FORMER ALL TERRACE CEO. ROMAINE: EVERYONE WANTS A PIECE OF AI AND WE WILL TALK TO RYAN NEESE, MANAGING PARTNER AT NEXT LEGACY, FORMER SUPER BOWL CHAMPION, TO DISCUSS THE BUSINESS OF CONNECTING THE BIGGEST NAMES IN SPORTS WITH THE TOP MINDS IN SILICON VALLEY. ALL THAT AND MORE COMING UP RIGHT HERE ON "THE CLOSE," RIGHT HERE ON BLOOMBERG. ♪ ROMAINE: WE KNOW ROBINHOOD WANTS TO GET THE MARKET OPEN ALL THE TIME AND I WILL WANT SOFTWARE TO TRADE FOR YOU. THE COMPANY UNVEILING AI AGENTS THAT CAN RESEARCH MARKETS, BUILD STRATEGIES, EXECUTE TRADING INDEPENDENTLY. JOINING US NOW LIVE FROM THE SUMMIT IS THE CHAIRMAN AND CEO OF ROBINHOOD, VLAD TENEV. YOU SAID LAST NIGHT THAT YOU ARE BASICALLY PUTTING THE POWER OF HEDGE INTO EVERY TRADER'S POCKET. EXPLAIN THAT. VLAD: THAT'S RIGHT. WE ARE IN UNPRECEDENTED TIMES. YOU HEAR THAT SAID A LOT, BUT SUPER INTELLIGENCE IS CHANGING HOW WE CREATE AND HOW WE DO EVERYTHING AND ROBINHOOD WE ARE FOCUSED ON THE FINANCIAL ASPECT OF THIS AND WHAT CAN HAPPEN IF YOU PLUG, IF YOU SAFELY PLUG-IN THIS SUPER INTELLIGENCE INTO YOUR ROBINHOOD ACCOUNT AND WE TAKE ALL OF THE CAPABILITIES THAT ROBINHOOD OFFERS, WHICH WE ANNOUNCED 16 NEW ONES LAST NIGHT, BUT THINK OF IT HAS THE ABILITY TO TRADE ANY ASSET 24/7 AND WE ARE BUILDING THE INFRASTRUCTURE FOR THAT AND WHAT ROBINHOOD AGENTS, WE CAN NOW PLUG FRONTIER INTELLIGENCE INTO ALL THESE ASSETS AND ALLOW YOUR INTELLIGENCE TO HELP YOU TRADE THESE THINGS. WE ALSO INTRODUCE AGENT APPS WHICH ALLOW YOU TO PLUG IN UNIQUE DATA SOURCES, SO THINGS LIKE UNUSUAL WHALES, TOKEN TERMINAL, SATELLITE IMAGERY WHERE YOU CAN TAP INTO SATELLITE VIEWS OF PARKING LOTS IF YOU WANT TO IMPORT THAT INTO YOUR STRAIGHTENING -- TRADING STRATEGY. WE CAN DO AUTONOMOUS RUNS WITH LOOPS WHERE THE AGENT CAN PERFORM ACTIONS FOR YOU AND YOUR ACCOUNT WHILE YOU ARE SLEEPING. WE ARE VERY EXCITED ABOUT WHAT THIS UNLOCKS AND IT IS ABOUT MAKING IT CLEAR TO OUR ACTIVE TRADERS WHO ARE THE FOUNDATION OF OUR BUSINESS THAT THEY ARE AT A DISADVANTAGE TRADING ANYWHERE BESIDES ROBINHOOD. ROMAINE: HOW ARE YOU MAKING MONEY OFF THE AGENT APPS? WHAT IS THE DIRECT FINANCIAL BENEFIT TO YOU? VLAD: YES, SO THERE IS LIKE THREE DIFFERENT POTENTIAL MONETIZATION PATHS THAT YOU CAN THINK OF HERE. ONE IS SUBSCRIPTIONS. THESE APP DEVELOPERS ARE CHARGING SUBSCRIPTIONS AND THEY ARE OFFERING DEALS WHERE YOU GET FREE USAGE FOR THE FIRST MONTH. IN SOME CASES IT IS NOT JUST EASIER TO INTEGRATE WITH ROBINHOOD , THERE IS THE SUBSCRIPTION AND WE TAKE THAT PIECE OF THAT. THERE IS THE ACTIVITY WHICH WE MONETIZE NORMALLY ON OUR PLATFORM. AND THEN FOR NOW WE ARE OFFERING FREE USAGE THROUGH OPENAI OF GPT-6 LUNA TO THE END OF THE YEAR, BUT THERE IS ALSO MONETIZATION ON THE AI MODEL SERVING LAYER IF YOU ARE USING ONE OF THE PREMIUM MODELS THAT COSTS MONEY. EMILY: TALK ABOUT WHAT THE USERS WILL SEE WHEN THEY SEE THIS TRADING AGENT, DID THEY JUST SEE THE COMPLETED ORDER OR DO THEY GET A LITTLE BIT OF INSIGHT INTO THE RATIONALE BEHIND EVERY SINGLE TRADE? WHAT IS THE MODEL LOOKING AT? WHAT KIND OF RISK LIMITS? VLAD: YES, WE GAVE A PRETTY COOL DEMO OF ALL OF THIS SO IF THE VIEWERS WANT TO GET IN DEEPER I ENCOURAGE YOU TO CHECK THAT OUT. WHAT IT IS AS IT IS A SEPARATE ACCOUNT. FOR THOSE OF YOU THAT HAVE ROBINHOOD WE ALLOW YOU TO SEPARATE YOUR ASSETS INTO MULTIPLE ACCOUNTS, WE HAVE YOUR MAIN ROBINHOOD ACCOUNT BUT WE ALSO HAVE RETIREMENT, JOINT ACCOUNTS, WE OFFER TRUST AND WE HAVE INTRODUCED AN AGENTIC ACCOUNT WHICH IS A SEPARATE MONEY BUCKET AWAY FROM YOUR RETIREMENT AND MAIN BROKERAGE ACCOUNT AND YOU CAN CHOOSE TO MOVE MONEY IN A FINANCIAL SANDBOX TO MAKE SURE YOUR AGENT DOESN'T GO IN TRADE ALL YOUR MONEY. YOU HAVE TO MAKE AFFIRMATIVE MOVES AND MOVE MONEY INTO THE AGENTIC ACCOUNT. BY DEFAULT, TRADE APPROVALS ARE ON SO YOU WILL APPROVE EVERY TRADE THE AGENT WANTS TO MAKE BUT IF YOU WANT YOU CAN TURN THAT OFF AND YOU CAN HAVE AGENT LOOPS WHERE YOU CAN ESSENTIALLY CREATE LOOPS WHERE THE AGENT PERIODICALLY DOES ITS ANALYSIS, RUNS THE STRATEGY, AND DECIDES WHETHER TO TRADE AND THAT ALLOWS YOU TO OPERATE YOUR AGENT EVEN WHEN YOU ARE NOT LOOKING AT YOUR ROBINHOOD APP, LIKE WHEN YOU ARE SLEEPING. BECAUSE NOW EQUITY MARKETS ARE GOING TO BE 24/7 STARTING WITH ROBINHOOD FIRST SO YOU WILL ALWAYS BE ABLE TO CAPTURE OPPORTUNITIES. ROMAINE: I WANT TO ASK ABOUT THE LIABILITY. IT IS VERY CLEAR THAT THE LIABILITY RISK AT LEAST FOR RIGHT NOW FOR LOSSES STILL RESTS WITH THE USER RATHER THAN ROBINHOOD ITSELF BUT HAVE YOU TALKED WITH YOUR TECH ABOUT THIS IDEA OF WHETHER THE AGENTS AND THE TECHNOLOGY BEHIND IT MAY BE HALLUCINATES AND DOES THE WRONG TICKER OR BASICALLY DOES SOMETHING THAT THE USER DID NOT INTEND IT TO DO. DOES THAT LOSS OR POTENTIAL LOSS STILL FALL ON THEM OR WOULD ROBINHOOD BEAR SOME OF THAT RESPONSIBILITY? VLAD: YEAH, I MEAN, I GUESS WITHOUT GOING INTO THE LEGAL NATURE OF THIS QUESTION, WHAT I WILL TELL YOU IS WE HAVE SPENT A LOT OF EFFORT AND TIME MAKING SURE WE MITIGATE THE RISK OF HALLUCINATION. NOT JUST HALLUCINATIONS IN THE CORE MODEL, BUT THAT IT CALLS ROBINHOOD SERVICES THROUGH WELL-DEFINED TOOL CALLS AND THERE IS A LOT OF ENGINEERING ON THE HARNESS LAYER AND THERE IS THIS MODEL THAT CONNECTS IT TO OUR SYSTEM TO MAKE SURE THAT ONLY ALLOWED TOOL CALLS ARE MADE POSSIBLE. WE MADE A LOT OF EFFORT MAKING THAT ROBUST AND MAKING SURE THAT THE RELIABILITY IS UP TO OUR STANDARD. THERE ARE TRADE APPROVALS. YOU CAN MONITOR WHAT THE AGENT IS DOING. THE OUTPUTS ARE INTERPRETABLE. WE SHOULD SAY THAT THIS IS NOT OUR FIRST AGENTIC PRODUCT. WE HAD OVER 150,000 CUSTOMERS USING IT AND BUILDING THINGS. THIS IS AN EXTENSION OF THAT. IT WILL BE MUCH BIGGER NOW THAT IT IS INSIDE THE ROBINHOOD APP, BUT I THINK WE ARE BUILDING INCREASING CONFIDENCE THAT THESE TOOLS ARE NOT AS POWERFUL AND OPEN NEW CAPABILITIES, BUT THEY ARE ALSO SAFE AND WE BELIEVE THAT THROUGH OUR GUARD RAILS WE CAN INTRODUCE THESE PRODUCTS TO USERS IN A WAY THAT IS SAFE AND ALSO USEFUL. ROMAINE: WE APPRECIATE YOU TAKING TIME AWAY FROM THE SUMMIT DOWN THERE. VLAD TENEV, CHAIRMAN AND CEO OF ROBINHOOD. WE WILL TALK ABOUT THE FED RELEASING A NEW REPORT ABOUT THE CENTRAL-BANK RENOVATION PROJECT AND THERE HAVE BEEN A LOT OF HEADLINES JUST ABOUT A YEAR AGO WHEN TRUMP AND POWELL TOOK THAT VERY INTERESTING TOUR OF THE CONSTRUCTION SITE. WE WILL CATCH UP WITH THE UNIVERSITY OF MICHIGAN PROFESSOR AND ASK HER WHETHER THIS WAS ALL WORTH IT. THAT IS COMING UP ON THE CLOSE RIGHT HERE ON BLOOMBERG. ROMAINE: WELCOME BACK, 38 MINUTES FROM THE CLOSE ON THIS FINAL TRADING DAY OF SEPTEMBER AND IT HAS BEEN AN INCREDIBLY SLOPPY SEPTEMBER. THE S&P 500 UP 0.3% ON THE DAY. IF IT WEREN'T FOR THAT, WE WOULD BE IN THE RED ON THE MONTH. ANOTHER BIG STORY EARLIER WAS THE FED'S INTERNAL WATCHDOG COMING OUT WITH THE REPORT THAT FOUND NO EVIDENCE OF CRIMINAL WRONGDOING IN THE RENOVATION PROJECT FOR THE CENTRAL BANK'S HEADQUARTERS IN WASHINGTON, D.C. REMEMBER WHEN POWELL HAD TO TAKE TRUMP ON A TOUR LAST JULY OF THAT SITE? THE BEFUDDLED LOOK HE HAD, I THINK IT WAS A BEFUDDLED LOOK THAT A LOT OF US HAD. BETSY STEPHENS JOINS US NOW. WE HAVE THE INSPECTOR GENERAL'S REPORT AND I GUESS THAT KIND OF SAYS I THINK WHAT WE ALL KNEW, NO CRIMINAL WRONGDOING AND I GUESS THE BIG QUESTION YEAR LATER, WHAT WAS THIS ALL FOR? >> WELL, YOU KNOW, I THINK WE KNOW WHAT THAT INVESTIGATION WAS FOR AND IT WAS FOR A PRESIDENT WHO DOESN'T LIKE THE IDEA OF ANY AGENCY INCLUDING THE FED BEING TRULY INDEPENDENT. YOU KNOW, JEROME POWELL IS AN WAS BUT I THINK STILL IS A REPUBLICAN. HE WAS APPOINTED BY TRUMP. BUT HE REALLY RESPECTS THE INSTITUTION AND ITS DESIRE AND NEED, REAL NEED FOR INDEPENDENCE IN ORDER TO DO ITS JOB, WHICH IS TO KEEP PRICES STABLE, TO KEEP EMPLOYMENT AT ITS MAXIMUM SUSTAINABLE LEVEL. THAT IS ITS JOB AND IT REALLY CAN'T BE IN CONVERSATION WITH THE PRESIDENT ABOUT THE PRESIDENT'S IDEAS FOR MONETARY POLICY. EVEN A REALLY EXCELLENT, LIKE IF JEROME POWELL BECAME PRESIDENT HE SHOULD KEEP HIS NOSE OUT OF CENTRAL BANKING. I THINK THAT'S A FUNDAMENTAL ASPECT THAT PRESIDENT TRUMP DOESN'T UNDERSTAND, DOESN'T RESPECT. SO HE WAS LOOKING FOR HOW HE COULD GET HIS FOOT IN THE DOOR AND WE SAW AN INVESTIGATION THAT WASTED TAXPAYER MONEY JUST THROUGH AN INVESTIGATION THAT WAS UNNECESSARY. EMILY: SO A WIN I GUESS YOU WOULD CALL IT FOR FED INDEPENDENCE. IS THAT REFLECTED IN THE MARKETS? WALL STREET AND TRADERS ARE SHOWING THAT RESPECT OF FED INDEPENDENCE? >> YOU KNOW, I THINK THAT IF YOU WANT TO KNOW WHY HAS THE ECONOMY BEEN SO RESILIENT DESPITE THE FACT THAT WE HAVE HAD TARIFFS THAT ARE ON AGAIN AND OFF AGAIN AND A LOT OF ECONOMIC POLICY UNCERTAINTY WITH THE WAR IN IRAN AND WE HAVE SEEN INFLATION THAT HAS REALLY STARTED TICKING UP WITH THE WAR IN IRAN, WHY HAVE MARKETS BEEN SO OPTIMISTIC AND EVEN JUBILANT AT TIMES? I THINK IT IS REALLY BECAUSE POWELL FROM THE VERY BEGINNING SAID WE ARE GOING TO REMAIN TO AN INDEPENDENCE WHICH MEANS YOU CAN COUNT ON MONETARY POLICY. I DON'T THINK IT IS ABOUT LOOKING AT WHAT THE MARKET DOES TODAY. I THINK IT IS LOOKING AT WHAT THE MARKET IS DOING SINCE AS THE FED HAS MADE IT CLEAR OVER AND OVER AGAIN THAT IT WILL MAINTAIN ITS INDEPENDENCE. ROMAINE: IT GETS TO THIS IDEA OF THE GENERAL FUNCTIONING OF OUR ECONOMIC SYSTEM AND MORE IMPORTANTLY THE REGULATORY SYSTEM AROUND IT. DO YOU THINK PEOPLE ARE GOING TO LOSE FAITH OVERALL IN OUR SYSTEMS BECAUSE OF SOME OF THESE ISSUES? >> I THINK THAT IS A MUCH BROADER QUESTION. CERTAINLY WITH SOME OF THESE BROADER ISSUES YOU ARE TALKING ABOUT IT IS CAUSING A REALIGNMENT AROUND THE GLOBE. I HOPE WE WORK THINGS OUT WITH CANADA. I THINK CANADA IS A GREAT TRADE PARTNER FOR US BUT IF I WAS CANADIAN AND I WAS RUNNING CANADIAN POLICY, I THINK I WOULD HAVE LEARNED MY LESSON THAT DON'T PUT ALL YOUR EGGS IN ONE BASKET, YOU NEED TO BE DIVERSIFIED AND MARK CARNEY IS OUT THERE SHOWING HE IS TRYING TO DIVERSIFY CANADA. I DON'T THINK YOU CAN UNDO THAT EVEN IF THINGS SETTLE DOWN. ROMAINE: EXACTLY, DON'T PUT ALL YOUR LIQUOR IN ONE BASKET EITHER , BETSY, THAT GOOD CANADIAN LIQUOR. WHEN WE COME BACK A CLOSER READ ON THE REAL ASSETS, THE TRENDS TO WATCH. MORGAN STANLEY SET OF GLOBAL REAL ASSETS WILL BE JOINING US RIGHT HERE ON "THE CLOSE," RIGHT HERE ON BLOOMBERG. ROMAINE: BREAKING ON PARAMOUNT SKYDANCE, A JUDGE HAS ACCEPTED THE SETTLEMENT THE COMPANY HAS WITH THE U.S. STATES. THESE WERE SEVERAL STATES BY CALIFORNIA IT SOUGHT TO CHALLENGE THE DEAL TO BUY WARNER BROS. DISCOVERY. THAT DEAL CAN GO THROUGH AS SOON AS PERM IN IS READY WE WANT TO PIVOT TO INVESTORS HUNTING FOR HIGH-GROWTH ACTIVITIES. OUR NEXT GUEST IS HOMING IN ON U.S. INDUSTRIALS. IT HAS ALREADY DELIVERED MORE THAN 50% GROWTH, SHE SAYS, AND SHE JOINS US HERE. GREAT TO SEE YOU AGAIN. >> GREAT TO SEE YOU. ROMAINE: LET'S TALK ABOUT WHERE THAT HUNT TAKE YOU. COMMERCIAL REAL ESTATE, YOU WERE SAYING NOW IS THE TIME TO GET BACK INTO COMMERCIAL REAL ESTATE A FEW MONTHS AGO. TALK ABOUT THAT ENVIRONMENT NOW. LAURA: WE ARE BASICALLY MORE THAN FOUR YEARS INTO A REAL ESTATE CORRECTION, THE LONGEST CORRECTION TERRITORY IN OVER 30 YEARS IN REAL ESTATE. PRICES STILL DOWN 20% PLUS TRADING BELOW REPLACEMENT COST, BELOW THE COST TO BUILD THAT ASSET AND THAT IS REALLY THE FIRST TIME SINCE THE GREAT FINANCIAL CRISIS. WE FEEL LIKE FROM A PRICING STANDPOINT IT IS REALLY ATTRACTIVE AND POINT. ROMAINE: THE LAST TIME WE SPOKE YIELDS WERE NOT A 5.3 PERCENT IN OF THE 10 YEAR YIELD. WHEN YOU SEE THE RISING RATE ENVIRONMENT, WHAT DOES THAT CHANGE OF ANYTHING? LAURA: IT IS ABSOLUTELY A HEADWIND THAT WILL CREATE CHOPPINESS IN THE MARKET. IN WILL SLOW THE RECOVERY, BUT IT WON'T RESULT IT. AT THE END OF THE DAY HIGHER RATES ROOF -- AFFECT THE REAL ECONOMY AND ALL ASSET CLASSES AND THE REQUIRED RETURN, BUT I THINK WHAT IS REALLY INTERESTING ABOUT REAL ESTATE IS NOT JUST THE ATTRACTIVE ENTRY POINT BUT HOW IT TIES INTO THE KEY STRUCTURAL MEGATRENDS THAT ARE PROPELLING ALL PARTS OF THE WORLD TODAY. AI AND THE TECHNICAL -- TECHNOLOGICAL REVOLUTION. INCREASED POWER NEEDS, REAL ASSETS REALLY SIT AT THE NEXUS OF ALL OF THE STRONG MEGATRENDS. EMILY: STAYING ON AI, HOW AS A REAL ESTATE INVESTOR DO YOU CAPTURE THE MOST UPSIDE FROM ARTIFICIAL INTELLIGENCE? LAUREN: I THINK PEOPLE ARE ONTO THE DATA CENTER ELEMENT OF THAT BUT THAT IS REALLY JUST THE TIP OF THE ICEBERG. THERE ARE SO MANY OTHER WAYS TO PLAY, TO HAVE REAL ASSETS BE REALLY A DOORWAY INTO AI AND BY THE WAY AT A BETTER MULTIPLE. SO YOU HAVE FIBER TO DATA CENTERS, POWER ASSETS. THE MOST EXCITING TO US IS INDUSTRIAL REAL ESTATE. SO SO MANY WAYS THAT INDUSTRIAL REAL ESTATE IS DRIVEN BY AI. IT IS INCREASED E-COMMERCE. DRIVEN BY AI. IT IS THE PHYSICAL AI, SO ROBOTICS AND DRONES AND ALL THESE THINGS. AND PERHAPS MOST SURPRISING IS ALL OF THE INDUSTRIAL YOU ARE SEEING SPROUT OUT AROUND THESE DATA CENTERS CREATING THESE MANY OR MAJOR ECOSYSTEMS. EMILY: ARE YOU SEEING BOTTLENECKS TO BUILDING THE STORAGE SPACE AND ACCESSING THE POWER? LAUREN: ABSOLUTELY ON BOTH AND IT IS ONE OF THE MOST EXCITING THINGS IN REAL ASSETS BECAUSE WE ARE SEEING A MASSIVE FALL OFF IN SUPPLY. IT IS THE SUPPLY CHAIN BOTTLENECKS. IT IS IMMIGRATION, IT IS THE CONFLUENCE OF ALL THESE THINGS MAKING CONSTRUCTION COSTS SKYROCKET AND WITH THAT, SUPPLY CUTS OFF. HIGHER FINANCING, HIGHER CONSTRUCTION MEANS SUPPLY COMES DOWN AND WHEN YOU HAVE REALLY DURABLE DEMAND AND SUPPLY DROPPING DOWN, THAT MEANS RENTS HAVE ROOM TO RUN AND VALUE HAS ROOM TO GROW SO WE THINK ONE OF THE BULLISH INDICATORS LONGER-TERM IS THE FALLOFF IN THE SUPPLY. ROMAINE: I'M CURIOUS, I SAW YOUR INFRASTRUCTURE TEAM IS BACKING A GAS PIPELINE IN AUSTRALIA? LAUREN: IN A COUPLE PLACES. ROMAINE: IN A COUPLE PLACES, WHO KNOWS? IT GETS TO THAT QUESTION ABOUT WHETHER IT BECOMES A BIGGER COMPONENT? WE HAVE DONE WITH THE PICKS AND SHOVELS. AT THE PERIPHERY THERE ARE STILL A LOT OF NEEDS . LAUREN: IT IS A FUNDAMENTAL ERROR -- INPUT AND IT TIES INTO SOME OF THE GEOPOLITICAL FRAGMENTATION WE ARE SEEING. GERMANY THOUGHT IT COULD BUY ALL ITS NATURAL GAS FROM RUSSIA ONCE UPON A TIME AND APPLE THOUGHT IT COULD MAKE ALL ITS IPHONES IN CHINA. WE ARE SEEING A NEED TO DIVERSIFY SUPPLY CHAINS INCLUDING FOR ENERGY ASSETS AND THAT IS FINDING A NEED TO BUILD ENERGY ASSETS AND THEY NEED DIFFERENT WAYS TO GET THE ENERGY ASSETS WHEN THE STRAIT OF HORMUZ IS CLOSED AND COUNTRIES THAT ARE EXPORTERS ALSO NEED DIFFERENT WAYS TO SEND ENERGY ASSETS TO OTHER PLACES. SO IF YOU ARE HAVING DISPUTES WITH A DIFFERENT COUNTRY AND YOU CAN'T SELL ALL YOUR POWER THERE, YOU NEED WAYS TO GET IT ELSEWHERE. ROMAINE: I DO HAVE TO ASK YOU ABOUT OFFICES. OFFICES HAVE DONE PRETTY WELL. I WAS LOOKING AT SOME OF THE AGGREGATE NUMBERS. CENTRAL BUSINESS DISTRICTS WERE UP 9%. HAVE YOU CHANGED YOUR TUNE OR ARGUE FINE LETTING OTHER PEOPLE HAVE AT THAT? LAUREN: IT IS WHAT YOU AND I HAVE DISCUSSED IN THE PAST WHICH AS YOU HAVE THAT MASSIVE BIFURCATION SO THESE EXTRAORDINARY OFFICE ASSETS, THE TRULY TROPHY ARE LIKE THE OASIS IN THE OFFICE DESERT AND THAT IS STILL VERY MUCH WHAT WE ARE SEEING SO OUR OFFICE ASSETS ARE SEEING ALL-TIME HIGH RENTS BECAUSE THEY ARE SO HIGH QUALITY AND YOU ARE SEEING THAT CONSOLIDATION OF DEMAND. I THINK THE OPEN QUESTION IS HOW WIDE THAT RADIUS OF WHAT CONSTITUTES THE BEST WILL BE? ROMAINE: IF THAT IS BEING LIFTED BY THE TROPHY PROPERTIES? EMILY: WHAT ABOUT WHEN IT COMES TO RESIDENTIAL REAL ESTATE? YOU MENTIONED THE AGING DEMOGRAPHICS. WHERE ARE THESE PEOPLE MOVING? LAUREN: A LOT OF THEM ARE MOVING INTO SENIOR HOUSING ASSETS. ONE THING THAT IS SO FASCINATING IS YOU HAVE TO LOOK AT WHERE THE AGE COHORTS ARE AND WE KNOW THE 80 PLUS POPULATION IS GROWING NORTH OF 4% A YEAR WHILE THE OVERALL POPULATION IS FLAT SO YOU SEE A LOT OF GROWTH IN THAT SEGMENT AND WEALTH CONCENTRATION AND THAT IS CRATING LOTS OF DEMAND FOR SENIOR HOUSING IN PARTICULAR. WE ARE ALSO SEEING AN UNEVENNESS. HOME PURCHASING IS UNFORTUNATELY REALLY OUT OF REACH. ROMAINE: DO YOU THINK , THE QUESTION I GET FROM ALL MY FRIENDS IS ONE CAN I BUY? DO YOU THINK THIS IS BASICALLY GONE FOR THIS GENERATION? LAUREN: WE WILL SEE WHAT HAPPENS WITH RATES. THE AVERAGE MORTGAGE PAYMENT HAS GROWN BY 90%. THAT IS RATES AND IT IS ALSO HOME PRICE APPRECIATION. WHAT WE BELIEVE IS THAT RENTAL VERSUS OWNERSHIP WILL CONTINUE TO BE A TREND? WE DO THINK THAT HOMEOWNERSHIP WILL STAY MORE EXPENSIVE THAN MENTORSHIP. EMILY: GREAT TO CEEO, THE HEAD OF REAL GLOBAL ASSETS AT MORGAN STANLEY. COMING UP, APPLE SHARES IN THE GREEN AS THE COMPANY MOVES INTO THE SMARTPHONE MARKET. -- SMART HOME MARKET. THIS IS "THE CLOSE" ON BLOOMBERG. ♪ EMILY: OUR STOCK OF THE HOUR IS APPLE. THE IPHONE MAKER SET TO MAKE ITS FORAY INTO THE SMART HOME MARKET AND UNVEIL THE HOME HUB, UPDATED APPLE TV AND HOME MANY. NORAH MULINDA JOINS US NOW. WHY IS APPLE TRYING TO IMITATE WHAT WE HAVE ALREADY SEEN THE AMAZON ECHO? ROMAINE: I'M SORRY, DIDN'T THEY ALREADY ENTER THIS SPACE? NORAH: THEY TRIED BUT IT DIDN'T GO WELL SO NOW WE ARE COMING BACK WITH THE SECOND ITERATION OF IT AND THE DIFFERENCE IS THAT THEY FEEL AS THOUGH THEY ARE BETTING ON SIRI THAT THEY HAVE BEEN SPENDING SO MUCH TIME WORKING ON AND THEY ARE HOPING THIS WILL CATAPULT THEM AHEAD OF THE LIKES OF AMAZON AND GOOGLE WHICH WE WERE TALKING ABOUT THE ECHO, ALEXA, AND A LOT OF PEOPLE HAVE THESE IN THEIR HOMES BUT THEY ARE HOPING WITH SIRI, THE AI ASSISTANT, THAT IT WILL ENTICE CONSUMERS. ROMAINE: IT IS NOT JUST AMAZON, WHO WAS THE OTHER ONE? NORAH: GOOGLE. ROMAINE: NO YOU HAVE MUSE. I'M CURIOUS. AT THE HEART OF IT, IT IS NOT REALLY ABOUT THE HARDWARE. ANYBODY COULD PUT AN IPAD UP THERE AND EAVESDROP ON ME. IT HAS TO BE RESPONSIBLE AND ACCURATE? NORAH: THAT IS THE BIGGEST CHALLENGE IN THAT WILL BE THE BIGGEST TEST FOR THIS PRODUCT. CAN THEY GET CONSUMERS TO LEIBY THESE OTHER BRANDS AND DO THIS INSTEAD? THE SECOND IS SIRI ACTUALLY WORK? PEOPLE WILL COMPLAIN ANECDOTALLY ABOUT HOW IT IS NOT RESPONSIVE TO THEM IN THE WAY THEY WOULD WANTED TO BE SO WILL THIS MARK ON BE ABLE TO DO THAT? THAT IS THE QUESTION INVESTORS ARE ON THE EDGE OF THEIR SEAT WAITING TO SEE AND CONSUMERS. WE WILL HAVE TO SEE WHETHER THERE IS A BROADER CONSUMER. EMILY: WHAT DO WE UNDERSTAND ABOUT HOW THIS WOULD BE DIFFERENT THAN AMAZON ECHO ALREADY DOES. NORAH: ALL THESE THINGS HAVE I MESSAGE. ROMAINE: WHAT KIND OF APPLE FAN GIRL ARE YOU? NORAH: I KNOW, TOO MUCH. THEY HAVE THIS ECOSYSTEM THEY ARE BETTING CONSUMERS WILL WANT TO BUILD OUT. THE SMARTPHONE WILL BE ABLE TO DO FACIAL AND VOICE RECOGNITION SO IF THE DEVICE IS SITTING IN YOUR LIVING ROOM WHEN SOMEONE COMES IN AND THE HOUSEHOLD WILL BE ABLE TO RECOGNIZE THE PERSON BY THEIR FACE AND CHANGE EVERYTHING ON THE SCREEN TO REFLECT WHAT IS IN THEIR MESSAGES AND THEIR MUSIC CAP AND SO ON. ROMAINE: YEAH, SOME PEOPLE WANT THAT, SOME PEOPLE DON'T. EMILY: SOME PEOPLE ARE TERRIFIED. ROMAINE: EVERYTHING YOU SAY TO A CERTAIN EXTENT POSSIBLY EXISTS. MICROSOFT HAD A SIMILAR PRODUCT. YOU WOULD WALK IN AND IT WOULD CHANGE THE DIGITAL ARTWORK ON YOUR WALL. IT CHANGES THE QUESTION AS TO WHETHER THIS CAN BE ACTUALLY ACCRETIVE TO APPLE'S BOTTOM LINE. I KNOW THEY ARE TRYING TO KEEP PEOPLE IN THE SYSTEM, BUT IS THIS GOING TO MOVE THE NEEDLE RELATIVE TO A NEW PHONE? NORAH: THAT'S THE MASSIVE? ABOUT WHETHER THIS IS A BROAD-BASED ADOPTION AND WHETHER THIS WILL BE ONE MORE DEVICE THAT DOESN'T STICK. I DON'T KNOW IF YOU GUYS HAVE A HOME POD. ROMAINE: I DON'T. EMILY: I DON'T. NORAH: I COULDN'T TELL YOU WHAT IT LOOKS LIKE. ROMAINE: I'VE SEEN IT. THEY DO EXIST. NORAH: THEY ALSO HAVE THE HOME HUB MANY. ROMAINE: THE MANY -- MIN? -- MINI? IS THAT FOR SMALL HOUSES? [LAUGHTER] ALL JOKES ASIDE, APPLE SHARES UP. MARK PINTO, HEAD OF AMERICA'S EQUITIES AT JANICE, IS UP NEXT. >> EARNINGS GROWTH FOR THE MEDIAN S&P COMPANY UP 12%. INCLUDING ONE-TIME ITEMS, TO GIVE IT THAT DISPARITY YOU ARE REFERRING TO WE HAVE SEEN BIG CAP COMPANIES DELIVERING STRONG RESULTS. THE ENERGY COMPANY DELIVERING STRONG RESULTS BUT THERE HAS BEEN A BROADENING IN TERMS OF EARNINGS PERFORMANCE. ROMAINE: THAT WAS MICHAEL GATES AT BLACK ROCK. HE KICKED US OFF TO THE CLOSE ABOUT 50 MINUTES AGO AND WE ARE GOING TO GET BACK TO THE NUMBERS AND THE MARKETS BUT WE DO HAVE A NUMBER -- ANOTHER HEADLINE INCLUDING FORMER FED CHAIR JAY POWELL. EARLIER TODAY THE INSPECTOR GENERAL RELEASED A REPORT SAYING THERE WAS NO CRIMINAL WRONGDOING IN THE CONSTRUCTION OF THE FED'S BUILDING. OF COURSE WE ALL REMEMBER ABOUT A YEAR AGO BUT HAY WAS MADE ABOUT THE MORE THAN $1 BILLION IN COSTS THE PROJECT WAS TAKING. THE PRESIDENT SAYING "POWELL SHOULD BE FORCED TO RESIGN FROM THE FED BOARD" AND HE HAS ASKED HIS ATTORNEY GENERAL TO STUDY THE REPORT AND THE BLANCHE WILL MAKE A DETERMINATION ABOUT THE BUILDING. TRUMP SAYING THAT IF POWELL DOESN'T RESIGN, HE SHOULD BE SUED BY THE U.S.. POWELL IS STILL A MEMBER OF THE FED. WE DO WANT TO TURN BACK TO THE MARKETS RIGHT NOW. AS WE HEAD TOWARD THE CLOSING BELL ON THE FINAL TRADING DAY OF THE MONTH, STOCKS OR BEEN ON THE BACK FOOT AND A LOT OF QUESTIONS ABOUT THE DURABILITY OF THE TRADE GOING FORWARD AND WE WANT TO GET RIGHT TO IT RIGHT NOW AND BRING IN OUR NEXT GUEST. MARK PINTO, HEAD OF AMERICA'S EQUITIES OVER AT JANUS HENDERSON. GREAT TO HAVE YOU ON THE PROGRAM. MARK: THANKS FOR HAVING ME. ROMAINE: 5.2 6% ON THE 10 YEAR. ALMOST 5.6% OWNER THE 30 YEAR YIELD RIGHT NOW. YOU HAVE A PCE REPORT THIS MORNING SOMEWHAT BENIGN. SPENDING IS HOLDING UP, THE ECONOMY AT LEAST IN OF THE TOP LINE IS STILL DOING WELL. EARNINGS HAVE BEEN FANTASTIC. MULTIPLES HAVE COME DOWN. IS THAT A BUYING ENVIRONMENT FOR EQUITIES? MARK: I THINK IT IS A PRETTY ATTRACTIVE ENVIRONMENT. IF YOU LOOK FORWARD, THE MARKET IS TRAINING AT -- TRADING AT 19 TIMES FORWARD EARNINGS. WE TALKED ABOUT THE INVERSE AND MARKET PE BEING THE INVERSE OF THE BOND RATE AND WE ARE THERE TODAY. IN MY VIEW, THAT IS NOT AN UNEVEN BACKDROP. AS YOU NOTED, THE 10 YEAR IS OVER 10%, THERE ARE CONCERNS ABOUT INFLATION LARGELY DRIVEN BY ENERGY PRICES, BUT TODAY'S PCE REPORT WAS A LITTLE BIT ENCOURAGING. WE SAW 6% CONSUMER SPENDING AND ONLY 3% CORE INFLATION. SO IT SEEMS TO BE HAPPENING IS NOT WITHSTANDING THE HIGHER RATES AND INFLATION THE CONSUMER IS STILL SPENDING, THE ECONOMY IS STILL GROWING, AND MOST IMPORTANTLY EARNINGS ARE GROWING. EARNINGS ARE PROJECTED TO BE UP 33% SO I FEEL THE MARKET CAN HANG IN AS LONG AS EARNINGS GROWTH CONTINUES NOTWITHSTANDING THE HIGHER RATES. ROMAINE: THERE IS A CONCERN THAT HIGHER RATES ARE TAKING A BITE OUT OF MARKET BRETT. -- BREADTH. THAT EARNINGS GROWTH WAS JUST TECH STOCKS, BUT DO YOU WORRY THAT INFLATION AND HIGHER RATES COULD ACTUALLY MAY BE HOW MUCH BREADTH WE MIGHT GET? MARC: WHAT HIGHER RATES TO DO IS THEY MAKE IT HARDER FOR COMPANIES TO JUSTIFY A GOVERNMENTAL INVESTMENTS. WHEN RATES ARE ZERO ANYONE CAN INVEST MONEY IN GET A POSITIVE RETURN BECAUSE THE COST OF CAPITAL IS NEGLIGIBLE. IN TODAY'S ENVIRONMENT WHEN YOU LOOK AT A 5% 10 YEAR YIELD AND OBVIOUSLY YOUR TOTAL BLENDED COST OF CAPITAL IS HIGHER, IT REALLY FAVORS THE STRONGER COMPANIES THAT ACTUALLY HAVE THE BETTER BUSINESS MODELS THAT CAN SUPPORT BETTER INVESTMENT PROJECTS, WHEREAS THE COMPANIES THAT ARE STRUGGLING TYPICALLY CANNOT MAKE THOSE PRODUCTS WORK AT TODAY'S RATES, SO IT ESSENTIALLY REWARDS THE WINNERS AND PUNISHES THE LOSERS AND OF COURSE OUR JOB IS TO FIGURE OUT WHO THE WINNERS ARE AND AVOID THE LOSERS. HIGHER RATES IS NOT ALL BAD, BUT YES IF RATES STAY HIGH FOR A -- AN EXTENDED PERIOD OF TIME, THAT IS WHY WE HAVE TO WATCH EARNINGS GROWTH AS WELL AS THE ABSOLUTE LEVEL OF RATES. EMILY: WHAT ARE THE TELLTALE SIGNS OF A WINNER IN THIS ENVIRONMENT? IS IT BIGGER OR REALLY STRONG BALANCE SHEET, A LOT OF CASH ON HAND? MARC: IT IS A LOT OF THOSE THINGS, CONSISTENCY IN DURABILITY OF EARNINGS. WE LOVE COMPANIES THAT CAN ACTUALLY SEE THEIR FUTURE AND HAVE CONFIDENCE THAT THEIR EARNINGS ARE GOING TO BE THERE, THAT IT IS NOT SUBJECT TO LAST-MINUTE THINGS. STRONG BALANCE SHEETS IS VERY IMPORTANT, RIGHT? BECAUSE WHEN RATES ARE HIGHER IN COST OF BORROWING IS HIGHER, CAPITAL IS MORE EXPENSIVE AND HAVING A STRONG BALANCE SHEET WHERE YOU DON'T HAVE TO GO TO THE CAPITAL MARKETS TO RAISE MONEY TO FUND THE PROJECT IS A CORE ADVANTAGE, SO IT IS ALL THE QUALITY THINGS. HIGHER MARGINS, HIGH FREE CASH FLOW. THOSE ARE THE THINGS THAT MAKE BUSINESS MODEL SUSTAINABLE AND ABLE TO ENDURE MOST ENVIRONMENTS. EMILY: HOW ARE YOU THINKING ABOUT HOW WHETHER OR NOT WE GET ANOTHER RATE HIKE THIS YEAR OR ONE IN OCTOBER? HOW DOES THAT INFLUENCE THE EQUITY STRATEGY? MARC: I PERSONALLY DON'T FEEL ANOTHER RATE HIKE WILL HAVE A MATERIAL IMPACT ON THE MARKET AS LONG AS EARNINGS CONTINUE TO GROW. NEXT YEAR THEY ARE FORECAST TO GROW 12%. OBVIOUSLY DECELERATION FROM THE GANG BUSTERS YEAR THIS YEAR BUT AS LONG AS WE SEE EARNINGS GROWTH AND THAT THE FED DOESN'T OVERSTEP AND MAKE A POLICY ERROR WHICH IS WHAT PEOPLE ARE ALWAYS WORRIED ABOUT, THEN I THINK WE CAN ABSORB ANOTHER RATE HIKE OR MAYBE TWO AS ANOTHER -- AS LONG AS THE DATA SUPPORTS IT AND THE FED DOESN'T OVERREACH. ROMAINE: WE ARE GOING TO GET MICRON EARNINGS IN THE PAST COUPLE OF MINUTES AND YOU HAVE TALKED ABOUT MEMORY BEING ONE OF THE BIG BOTTLENECKS OUT THERE IN THE PAST BUT WE HAVE SEEN THE RUN-UP IN THE STOCKS. DO YOU FIND SOME ROOM FOR THOSE PEOPLE WHO MAY BE ARE NOT ALREADY ON THAT TRAIN OR SHOULD THEY START LOOKING FOR SOMETHING ELSE IN THE AI ECOSYSTEM? MARC: IN GENERAL, WE FEEL THE ECOSYSTEM HAS A LONG WAY TO GO. IF YOU LOOK AT THE VALUATIONS AND THE SEMI CONDUCTOR SPACE HAS BEEN THE LATEST BENEFICIARY, THE OVERALL STOCKS ARE TRADING AT A DISCOUNT TO THE MARKET. OVERALL AROUND 13 OR 14 TIMES EARNINGS, SO VALUATIONS ARE NOT DEMANDING. OBVIOUSLY THOSE NUMBERS AND BETS ARE PRETTY HIGH EARNINGS EXPECTATIONS BUT THE HYPERSCALERS ARE GOING TO SPEND $1 TRILLION NEXT YEAR IN CAP X-BAND AND AS LONG AS YOU BELIEVE THAT THEY WILL MONETIZE THAT SPEND, WHICH WE DO THEN I THINK THE FOLKS IN THE AI ECOSYSTEM ARE STILL GOING TO CONTINUE TO BE PRODUCING ALL OUT. ROMAINE: WERE YOU SURPRISED BY THE RESILIENCY OF THE MARKET THIS YEAR? MARC: I HAVE BEEN NOT REALLY THAT SURPRISED BECAUSE WE HAVE SO MANY SECULAR THEMES DRIVING AND AI IS THE ONE WE TALK ABOUT, ONE THAT I DON'T THINK GETS ENOUGH ATTENTION IS HEALTH CARE INNOVATION. AND THE FACT THAT WE ARE COMING UP WITH DISCOVERIES THAT ARE CURING DISEASES THAT WE HAVE NEVER CURED BEFORE. AS LONG AS THERE IS INNOVATION AND GROWTH IN PARTS OF THE ECONOMY, THAT IS A BIG TAILWIND TO THE MARKET. ROMAINE: GREAT TO HAVE YOU HERE. MARC PINTO, AHEAD --HEAD OF AMERICA'S EQUITIES OVER AT JANUS HENDERSON, COUNTING US DOWN TO THE CLOSING BELLS, A MIXED DAY ON WALL STREET AS WE CLOSE OUT THE MONTH WITH OUR GLOBAL SIMULCAST THAT STARTS RIGHT NOW. >> THE CLOSING BELL, BLOOMBERG'S COMPREHENSIVE CROSS-PLATFORM COVERAGE OF THE U.S. MARKET CLOSE STARTS RIGHT NOW. ROMAINE: AND RIGHT NOW WE ARE TO MINUTES AWAY FROM THE END OF THE TRADING DAY, ROMAINE BOSTICK WITH EMILY GRAFFEO. WE ARE TAKING YOU THROUGH TO THE CLOSING BELL JOINED BY DAVID GURA AND CHRISTINA. IN FOR CAROL MASSAR AND TIM STENOVEC. WHO KNOWS WHERE THEY ARE. THE FINAL TRADING DAY OF A SLOPPY SEPTEMBER A LOT OF PEOPLE WOULD LIKE TO FORGET. >> WE ARE SEEING TRADERS TAKING SOME RISK OFF, THE S&P 500 AS WE HAD THAT CLOSING BELL. ROMAINE: WHAT IS DAVID GURA DOING? YOU KNOW YOU HAVE TO STAY IN THE SHOP. DAVID: I HAVE UNPLUGGED MY CABLE. ROMAINE: THIS GUY SPENT HIS WHOLE CAREER WORKING IN MEDIA. DAVID: SORRY, I DON'T HAVE TIM'S FINESSE. >> PLEASE GIVE HIM MORE OF A HARD TIME. DAVID: I'M HERE. ROMAINE: ALL RIGHT. GUYS, WE ARE GOING TO GET MICRON EARNINGS IN JUST A FEW MINUTES AND THIS IS ANOTHER TEST FOR THE APPETITE FOR THE AI TRADE. WE HAVE SEEN THIS BUILDOUT TAKING PLACE AS WELL, THE ANXIETY WE SEE IN TERMS OF THE NUMBER OF DATA CENTER COMPANIES PULLING BACK ANOTHER IPO'S, IT IS SPREADING. WE HAVE SEEN THE PRESIDENT TRYING TO QUELL THAT. ROMAINE: THE END OF THE DAY, THE END OF THE MONTH, THE END OF THE QUARTER. THE S&P DOWN ABOUT 0.2% AS WE WAIT FOR THE NUMBERS TO SETTLE. THEY WILL CLOSE LOWER FOR THE MONTH. THE DOW JONES LOSING ABOUT 400 POINTS ON THE DAY DOWN ABOUT 0.8%. THE INDICES EACH GRAIN ANOTHER DAY. THE RUSSELL 2000 CLOSING OUT THE DAY IT DOWN 11%, DOWN 5 -- 11 POINTS, DOWN FIVE POINT FOUR PERCENT FOR SEPTEMBER. DAVID: I CAN'T EMPHASIZE HOW MUCH BETTER THIS IS WHEN I CAN HEAR YOU LOUD AND CLEAR, ROMAINE. A TORRENT OF ECONOMIC DATA ABOUT CONSUMER SPENDING. WE GOT THE CORE PCE NUMBERS WHICH ARE SO IMPORTANT OF COURSE. WE SAW INVESTORS RECALIBRATING THEIR SENSE OF WHAT THE FED IS GOING TO DO. THE FED IS NOT LIKELY TO HIKE AT THE NEXT MEETING. EMILY: YOU SEE THAT REFLECTED IN WHAT SECTORS WERE DOING WELL TODAY. TECHNOLOGY LEADING THE WAY WHEN YOU LOOK AT THE SECTOR BREAKDOWN OF THE S&P 500. THAT GREEN SECTION IS ALL I. CONSUMER DISCRETIONARY FOLLOWING UP AS WELL ON THAT CONSUMER SPENDING DATA. CONSUMER STAPLES LACKING THE MOST. ROMAINE: MICRON EARNINGS CROSSING THE WIRE RIGHT NOW. EXPECTATIONS WERE HIGH AND IT DOES APPEAR THEY MET THOSE EXPECTATIONS. 54.2 $3 BILLION. THE STREET WAS LOOKING FOR ROUGHLY ABOUT $52 BILLION. WE SHOULD POINT OUT ON A YEAR-OVER-YEAR BASIS, THAT IS GROWTH OF ABOUT 370%. GROSS MARGIN IN THE QUARTER EXPANDED AND HERE IS YOUR BOTTOM LINE NUMBER. THE STREET WAS LOOKING FOR 31 POINT 83. THE GUIDANCE FOR THE CURRENT QUARTER, THE COMPANY SAYS EXPECTED ADJUSTED EPS, THE LOW END OF THAT RANGE IS ABOVE THE AVERAGE OF ANALYST ESTIMATES. AND FINALLY, THE REVENUE FIGURE FOR THE CURRENT QUARTER, THE COMPANY GUIDING $63 BILLION IN REVENUE, THE STREET ESTIMATE WAS $457 BILLION, THE KNEE-JERK REACTION IS BASICALLY THE SHARES WE WILL CALL IT UNCHANGED. DAVID: I WILL STICK FOR THE REVENUES WITH THIS BOISE BASED BEHEMOTH HERE. YOU LOOK AT CLOUD MEMORY. AUTOMOTIVE AND EMBEDDED REVENUES. WE ARE TALKING ABOUT THIS IN THE CONTEXT OF AI AND THAT BUILDOUT AND THIS IS VERY MUCH A COMPANY THAT IS SO WIDELY INVOLVED IN SO MANY ASPECTS OF THE BROADER TECH SPACE. >> I HAVE BEEN LOOKING AT SANDISK WHICH WAS UP AS MUCH IS 14%, DOWN ABOUT 0.5%. OVERALL, THEY HAVE OUTPACED NVIDIA THIS YEAR. AND PART OF THAT YOU ARE SEEING NOT ONLY FROM THE NUMBERS DATA WAS MENTIONING, BUT A REGULATORY INFRASTRUCTURE YOU ARE NOT SEEING THOSE FEARS BECAUSE YOU HAD THIS BIG PRESS CONFERENCE AT THE WHITE HOUSE THIS WEEK. UNCLEAR IF THAT WAS GOING TO GET ALL THESE EARNINGS NUMBERS BUT OBVIOUSLY IT IS TOO EARLY. AND THEY ARE REALLY OUTPACING INVESTORS SO FAR. EMILY: FOURTH-QUARTER CORE DATA CENTER REVENUE, A BIG BEAT, $18 BILLION VERSUS ESTIMATES OF JUST $11.3 BILLION. WE KNOW THE DATA CENTER TRADE IS ALIVE AND WELL AND WE ARE SEEING THAT. ADJUSTED OPERATING INCOME ALSO BEATING ESTIMATES, ROMAINE. ROMAINE: WHEN YOU LOOK AT THE UNCHANGED NATURE OF THE SHARES, THEY HAD RALLY FROM THE LOWS OF THE SUMMER. A BIG PART OF THE REASON IS TO A CERTAIN EXTENT THE NUMBERS ARE PROBABLY A LITTLE BIT LESS IMPORTANT THAN WHAT THE COMPANY SAYS ON THE CONFERENCE CALL ABOUT THE LONG-TERM PICTURE LOOKING INTO 2027 CALENDAR YEAR 2028 AND BEYOND. WE HEARD FROM SANDISK, NVIDIA, OTHER CHIPMAKERS. THAT MULTIYEAR FORECAST AND WHETHER THE RUNWAY FOR AI SPENDING WOULD CONTINUE. DAVID: CASH FLOW, 43 $.97 BILLION IN WE WERE TALKING WITH THE CEO, TALKING ABOUT HELEN BLAVATNIK THIS IS OF A COMPANY THAT IS TRANSITIONING INTO AN AI FOCUSED COMPANY. WE ARE SEEING THIS TRANSITION TAKING PLACE ACROSS THE SPECTRUM, GUYS. ALL RIGHT, THANK YOU BOTH VERY MUCH. OUR COVERAGE IS GOING TO CONTINUE ON BLOOMBERG RADIO, YOUTUBE AS WELL. THAT'S THE CLOSE. [LAUGHTER] EMILY: STICK WITH US, WE WILL BE RIGHT BACK. ♪ ROMAINE: COMING UP, DIGGING DEEPER INTO THE RESULTS FROM MICRON. THAT IS COMING UP ON BLOOMBERG. >> THE COUNTDOWN IS ON. EVERYTHING YOU NEED TO GET THE EDGE AT THE END OF THE MARKET DAY, THIS IS "THE CLOSE IN ROMAINE: WELCOME BACK AS WE CLOSE OUT THE SEPTEMBER, STOCKS ENDED DOWN ON THE DAY PRETTY MUCH FOR THE MOST PART THE S&P DOWN ABOUT 0.2% ONE OF THE DAY AND IT WILL BE IN THE RED FOR THE MONTH OF SEPTEMBER, LITTLE BIT OF LIFE THE NASDAQ INDICES CLOSING OUT A SLOPPY SEPTEMBER WITH YIELDS HIGHER ONCE AGAIN. BRENT CRUDE HIGHER BACK ABOVE. I DO WANT TO TAKE A LOOK AT SOME OF THE INDIVIDUAL MOVERS ON A MONTHLY BASIS. ONE OF THE BRIGHT SPOTS WAS APPLE. A FEW OF THE BIG TECH NAMES ARE ONE OF A FEW THINGS THAT KEPT THIS MARKET GOING. WE SHOULD POINT OUT ON MONTHLY BASIS ONLY THREE OF THE S&P SECTORS FINISHED IN THE GREEN. TWO OF THEM, INFOTECH AND THE OTHER COMMUNICATION SERVICES WHICH IS INFOTECH AND QUITE FRANKLY META. EXPEDIA AND A LOT OF THE TRAVEL STOCKS MOVING LOWER AND A LOT OF THE SOFTWARE STOCKS ALSO MOVING LOWER OWN THE MONTH AS WELL WE WANT TO TAKE YOU TO OUR TOP STORY AND WE ARE GOING TO RESET. IT IS A CRAZY DAY AND AT THE END OF THE DAY THIS IS WHAT INVESTORS ARE KEEPING THEIR EYE ON. NOT JUST ON MICRON BUT THE BROADER TRADE. MICRON'S CONSEQUENTIAL AND IT IS OUR TOP STORY OF THE HOUR. THE FOURTH BEST-PERFORMING STOCK AND FOR MUCH OF THE BOOM IN THE AI, THE MARKET SHORTHAND FOR AI HAS BEEN NVIDIA. THOSE PROCESSORS OF COURSE ARE ONLY AS POWERFUL AS THE MEMORY FEEDING THEM. THAT HAS TRANSFORMED MEMORY FROM ONE OF THE SEMICONDUCTOR INDUSTRY'S MOST PUNISHING COMMODITY BUSINESSES INTO ONE OF THE SCARCEST AND MOST PROFITABLE LINKS IN THE AI SUPPLY CHAIN. MICRON, SANDISK, SEAGATE. THE NUMBERS COMING IN RIGHT NOW ARE STAGGERING. REVENUE IN ITS LAST QUARTER MORE THAN QUADRUPLED FROM A YEAR EARLIER. NET INCOME SURGED BY MORE THAN 1000%. ADJUSTED GROSS MARGIN, 87%. THE REAL TEST IS THE OUTLOOK. HOW MUCH HIGH-BANDWIDTH MEMORY CAN MICRON DELIVER FOR THE NEXT GENERATION OF SYSTEMS, IS PRICING POWER SPREADING INTO CONVENTIONAL AND HOW AGGRESSIVELY CAN THIS COMPANY AT PRODUCTION WITHOUT RE-CREATING THE OVERSUPPLY OF EVERY MEMORY BOOM? IS MICRON STILL A CYCLICAL MEMORY COMPANY OR WHETHER MEMORY HAS BECOME STRATEGIC INFRASTRUCTURE WITH DURABLE SCARCITY AND DURABLE PRICING POWER? OUR GUEST TOLD MICRON IN ONE OF HIS MAIN ETF'S. GIVE US YOUR KNEE-JERK REACTION TO THE EARNINGS WE JUST GOT FROM MICRON. >> I THINK THIS IS ANOTHER STRONG BID. I DO THINK MICRON PRESENTS A BIG DIVERGENCE BETWEEN THE BEARS AND BULLS. THE BEARS ARE TO MANNING PERFECTION WHILE THE BULLS ARE CONTEMPLATING MULTIPLE UPSIDE SCENARIOS. ROMAINE: I KNOW WE HAVE TO WAIT FOR THE CONFERENCE CALL TO GET A LONGER TERM OUTLOOK FOR THE COMPANY, BUT IS THIS A SITUATION WHERE WE ARE NOT GOING TO GET 300 PLUS PERCENT REVENUE GROWTH FOREVER, WE ARE NOT GOING TO GET 1000% EPS GROWTH FOREVER. CAN PEOPLE SLIDE DOWN TO A SAFE AND NORMALIZED GROWTH RATE THAT WILL PLEASE INVESTORS AND NOT SPOOK THEM? >> INVESTORS ARE PUTTING A HIGH BURDEN ON MICRON. TO DOUBLE ITS EARNING IN THE NEXT FISCAL YEAR. WHEN IT COMES TO THE QUESTIONS WHETHER THIS TIME IT IS DIFFERENT FOR THIS TIME IT IS SIMILAR I WOULD ARGUE THERE ARE DIFFERENT ELEMENTS THIS TIME. WE ARE SEEING DIFFERENT HYPERSCALERS SECURING MULTIYEAR SUPPLIES OF MEMORY AHEAD WITH SOME PRICING WINDOWS. THAT IS SOMETHING THAT WILL PROVIDE SUSTAINABILITY OF ITS MEMORY CYCLE. AT THIS POINT I HAVE NOT HEARD ANY NEGATIVE DATA POINTS THAT THE MEMORY CYCLE IS GOING TO REVERSE A DECLINE ANYTIME SOON FOR THE FORESEEABLE FUTURE AND PRICING ALSO REMAINS STRONG AND MICRON ATTEMPT TO PROVIDE DURABILITY BY SIGNING MULTIYEAR SUPPLY AGREEMENT THAT CAN BE AS LONG AS 3-5 YEARS AND THE AMOUNT OF THE MULTIYEAR SUPPLY AGREEMENT WILL GROW AND I DO THINK THE SUPPLY SHORTAGE OUTLOOK FOR 2027 REMAINS SOLID. ROMAINE: GIVE ME A SENSE THAT WHEN WE TALK ABOUT THE BIG FEAR HERE, WHICH IS ALWAYS THAT, OK, IF WE DO START TO SEE A SCALE BACK IN SOME OF THE OFFENDING -- SPENDING, ARE THERE SECOND AND THIRD TIER PLAYERS OUT THERE THAT COULD STEP IN TO KEEP INFRASTRUCTURE DEMAND GOING? ONE OF THE ARGUMENTS THAT HAS BEEN MADE IS THAT WHILE THE BUILDOUT IS ABOUT AI, THERE ARE USES BEYOND JUST AI. >> I DO THINK MICRON PRESENTS A STRONG GROWTH STORY WHEN WE LOOK AT AI, AI TRAINING, AI INFERENCE, AND AGENTIC AI. WE ARE HEARING ABOUT AGENTIC AI APPLICATIONS POPPING UP WEEKEND AND WEEK OUT NOW. WE ALSO HAVE A TRADITIONAL SERVER MARKET THAT IS SEEING AGENTIC AI DRIVING MORE WORKLOAD AND THEN DRIVING HIGHER DEMAND. WE ALSO HAVE A MULTIYEAR SERVER CYCLE THAT WILL CONTINUE FOR THE NEXT TWO OR THREE YEARS. ON TOP OF THAT I DO THINK MEMORY ACROSS CONSUMER ELECTRONICS, PHYSICAL AI WILL CONTINUE TO BE SUSTAINING GROWTH DRIVERS FOR THE MEMORY DEMAND. ROMAINE: WHEN WE TALK ABOUT WHAT COMES NEXT, WHAT DO YOU WANT TO HEAR FROM THE CEO AND THE CFO ON THIS CALL TONIGHT THAT WOULD DOUBLE DOWN ON YOUR CONVICTIONS ON THE COMPANY TONIGHT, ANOTHER STOCK? >> I THINK THE KEY FOCUS IS THE DURABILITY AND THE EARLY FEASIBILITY INTO GROWTH AND PROFITABILITY. I KNOW THE BEARS MAY NOT BE PLEASED IF THE CLOSE MARGIN STEP TOWARD LOW ADP PERCENT. LOW 80% COMPARED IS A VERY COMMANDING POSITION FOR MICRON. THEY OPERATE WITH A LIMITED NUMBER OF PLAYERS. I THINK GOING BACK TO WHAT IF A CERTAIN HYPERSCALERS SCALE DOWN, I DO THINK THERE ARE MANY TIER TWO, TIER THREE AND SOVEREIGN AI THAT WOULD BE HAPPY TO PICK UP THIS FLAG AND BUY THE EXTRA MEMORY SUPPLIES. ROMAINE: THE AI TRADE CONTINUES ON. MICRON SHARES BOUNCING AROUND HERE, BUT NOW IN THE GREEN ON THE BACK OF THAT SPECTACULAR REPORT. THERE WERE HEADLINES EARLIER ABOUT SYNOPSYS AND OPENAI SIGNING A MULTIYEAR AGREEMENT AND GOOGLE INTERVIEWING -- INTRODUCING GEMINI FOR ARGON. WE WANT TO PIVOT TO MEDIA AND ENTERTAINMENT, WE LEARNED THAT THE MATTEL CEO WAS STEPPING DOWN, BEING REPLACED, AND NOW WE KNOW WHY, HE IS JOINING PARAMOUNT SKYDANCE. HE WILL NOW BE CO-CEO OF THE MERGED COMPANY ONCE THE DEAL CLOSED AND HE WILL OVERSEE DAY-TO-DAY OPERATIONS AT THE COMPANY. WE WILL BE BACK IN A MOMENT. THIS IS BLOOMBERG. ♪ ROMAINE: SOME GOOD NEWS OUT OF MICRON. NOT ONLY MEETING EXTRAORDINARY EXPECTATIONS, BUT ACTUALLY BEATING THEM. FISCAL FOURTH-QUARTER NUMBERS BEATING GUIDANCE FOR THE FISCAL FIRST QUARTER. EXPECT 61 POINT $5 BILLION IN REVENUE THIS QUARTER. AND MARGINS FOR THIS COMPANY RIGHT NOW 87%. OUR NEXT GUEST HAS HELPED BANKROLL THE APPLICATION AND INFRASTRUCTURE LAYERS OF THE AI CHIP BOOM. MEMORY IS CENTRAL TO AI. THE MANAGING DIRECTOR AND FORMER COO OVER AT GITHUB. I WAS GOING BACK AT THE LAST ONE OF THE TIMES YOU WERE ON OUR SHOW BACK IN MAY AND YOU WERE TALKING ABOUT HOW BASICALLY NVIDIA'S GROWTH STORY WAS SUSTAINABLE. THIS HAS BEEN THE PARLOR GAME ALL YEAR LONG THAT EVERY TIME WE GET THESE GIGANTIC NUMBERS IT IS SORT OF LIKE THIS CAN'T GO ON FOREVER AND LET'S FACE IT, IT WON'T GO ON FOREVER, BUT GIVE ME YOUR TAKE ON MICRON BECAUSE WHILE IT WON'T GO ON FOREVER IT DOES LOOK LIKE IT MAY GO ON FOR A FEW MORE QUARTERS, MAYBE EVEN A FEW MORE YEARS DEPENDING ON WHO YOU WANT TO BELIEVE. >> I'M ON THE FEW MORE YEARS ABOUT RIGHT NOW. I THINK THERE IS INSATIABLE DEMAND FOR CHIPS AND MEMORY AND EVERYTHING THAT GOES INTO THE AI STACK. MY FRIENDS ARE IN A REALLY INTERESTING POSITION BECAUSE THEY ARE ONE OF THE LEADERS IN THIS. BUT ALSO HAVE ANOTHER LINE OF PRODUCTS TO FALL BACK ON AND THE PRICES ACROSS THE BORDER GOING UP BECAUSE THERE IS SOME SCARCITY OF WAIVERS AND ALL OF THIS CONNECTS TOGETHER. I THINK EVERYONE IN AI RIGHT NOW THAT IS LOOKING AT THE CHIP STACK IS LOOKING AT MEMORY. I THINK WE WILL SEE A LOT OF CHANGE IN CHIP ARCHITECTURES AND DEMAND FOR MEMORY OVER TIME, BUT IT IS STILL VERY EARLY DAYS THAT IT TAKES YEARS TO GET THESE NEW PRODUCTS TO MARKET. MICRON IS REALLY WELL-POSITIONED. ONE THING I'M LOOKING FOR IS WHAT ARE THE COMMITMENTS GOING TO BE FOR 2027 BROADLY? I THINK THEY ARE TAPPED OUT AT CAPACITY AND FULLY COMMITTED FOR 2026. I DON'T KNOW IF THAT IS GOING TO HOLD FOR 2027 AND I THINK THAT WILL HAVE HEAVY INFLUENCE ON HOW THE STOCK PERFORMS. WE HAVE USUALLY SEEN A DIP AFTER THE INITIAL FIRST POP. ROMAINE: THAT'S WHAT I'M CURIOUS ABOUT, WE TALK ABOUT MEMORY STOCKS BEING THE ULTIMATE CYCLICAL TYPES OF COMPANIES. THERE IS A BIG QUESTION AS MICRON STARTS TO BUILD OUT ITS CAPACITY ASSUMING IT MAKES GOOD ON SOME OF THE COMMITMENTS IT HAS MADE TO BOOST MANUFACTURING OUTPUT, ARE THEY AT RISK OF COMING TO MARKET WITH EXTRA SUPPLY AT A TIME WHERE MAYBE THE DEMAND IF NOT WANES, CERTAINLY STARTS TO FIZZLE OUT A LITTLE BIT? ERICA: IT IS TOUGH TO KNOW HOW THESE CYCLES WILL LINE UP BUT IT WILL CONTINUE TO EXIST , IT IS STILL VERY EARLY IN THE DIFFUSION OF AI. INTO THE ENTERPRISE AND VERY EARLY INTO THE DIFFUSION AND THE PHYSICAL WORLD. ALL OF THESE APPLICATIONS, ENTERPRISE APPLICATIONS BUT ALSO ROBOTICS IN OTHER APPLICATIONS ARE GOING TO REQUIRE MORE AND MORE CHIPS AND MEMORY IS AN IMPORTANT PART OF THAT. IT IS EARLY IN TERMS OF THE OVERALL CONSUMPTION IN TERMS OF AI IN THE WORLD AND WE NEED TO STAY GROUNDED. AS WE HEAR AI IN THE HEADLINES ALL THE TIME. ROMAINE: AS AN INVESTOR TO KIND OF PICK YOUR BRAIN ON THAT, WHEN I LOOK AT 87% MARGINS, THAT IS GREAT FOR MICRON, WE ARE SEEING SIMILAR NUMBERS FOR NVIDIA AND OTHER COMPANIES HERE BUT THERE IS A COUNTERPARTY TO THAT THAT IS GETTING SQUEEZED AND I DO WONDER WHEN WE START TO SEE A LITTLE BIT MORE OF THE VALUE CREATION ACROSS THE AI ECOSYSTEM AND NOT JUST GOING TO THE CHIPMAKERS. ERICA: THERE IS A LOT HAPPENING IN THE INFERENCE STACK, IT IS AN INCREDIBLY EXCITING SPACE, A LOT OF COMPANIES GOING AT ASTRONOMICAL RATES AS PEOPLE PUT MORE AND MORE PEOPLE ARE LOOKING AT HOW CAN WE SQUEEZE THE MOST JUICE POSSIBLE OUT OF CHIPS TODAY AND THAT INCLUDES OPTIMIZING OUT OF ONE CHIP STACK THE ENTIRE INFERENCE STACK. BUT HOW DO WE BUILD A LAYER THAT LETS YOU RUN ACROSS HETEROGENEOUS ARCHITECTURE SO PEOPLE CAN MAKE MORE AND BETTER USE WE WILL SEE A HUGE AMOUNT OF GROWTH THROUGH THE INFERENCE SERVING PROVIDERS AS WELL AS THOSE DELIVERING THE TECHNOLOGY TO ENABLE INFERENCE. WHETHER ON THE NEO-CLOUDS OR THE HYPERSCALERS AS WELL AS ENTERPRISES RUNNING THINGS THEMSELVES. ROMAINE: WHEN YOU LOOK AT SOME OF THE EXCITEMENT WE HAVE SEEN OVER THE LAST COUPLE OF DAYS AROUND MEDA'S RELEASE OF NEWS, IT SEEMS LIKE EVERYBODY IS COMING OUT WITHIN AI AGENT OF SOME SORT OR ANOTHER. ROBINHOOD ANNOUNCED SOMETHING TODAY, MICROSOFT HAS GONE FROM COPILOT TO AUTOPILOT. THIS SEEMS LIKE AT LEAST FOR RIGHT NOW PROBABLY THE NEXT PHASE WHERE WE ARE GOING TO START TO SEE MORE USE CASES BEYOND JUST CHATBOTS IN THE LARGE LANGUAGE MODELS THEMSELVES. ARE THESE REAL INNOVATIONS OR IS THIS JUST THE CHATBOT IN A DIFFERENT LAYER? HOW DO WE SQUEEZE THE UTILITY OUT OF THAT THE TRUST LAYER AROUND THAT SO PEOPLE FEEL COMFORTABLE PUTTING AI IS THIS GOING TO AFFECT THINGS I GO BY, ETC.? ROMAINE: THAT HAS BEEN THE PARLOR GAME ALL DAY. IT IS FINE WHEN YOU ARE PLANNING A VACATION AND GETTING ADVICE ON WHERE TO GO. IT'S ANOTHER THING TO LINK FINANCIAL ACCOUNTS. AND MAKE PURCHASING OR TRANSACTIONAL DECISIONS. WE'VE GOT TO BACKSTOP THAT. ERICA: IT IS FUNNY, THEY KIND OF RAIN U.N.. WHEN WE SEE THE EFFICIENCY AND TIME SAVINGS, BIT BY BIT YOU TRUST THEM WITH A LITTLE BIT MORE. I THINK OPENAI IS DOING REALLY GOOD JOB EXECUTING ON THAT AS WELL. IF YOU ARE A FREQUENT USER IT IS NOW SAYING, DO YOU WANT TO CONNECT YOUR BANK ACCOUNTS? YOU CAN CONNECT YOUR AURA RING DATA OR FUNCTION HEALTH DATA. I CAN EGG RECOMMENDATIONS. I'M NOT GOING TO GIVE YOU MY HEALTH DATA . THIS COULD DO SO MUCH MORE FOR ME IF I GET A CREDIT CARD. I GAVE IT A SEPARATE CREDIT CARD WITH A LOWER LIMIT TO KEEP CLOSE TABS ON IT, START WITH SOME SIMPLE THINGS AND LET IT EARN YOUR TRUST OVER TIME. I ASSUME I'M NOT IN THE MINORITY THERE. ROMAINE: YOU ARE CERTAINLY NOT TO. ALWAYS GREAT TO HAVE YOU. ERICA BRESCIA OVER AT REDPOINT VENTURES. MICRON SHARES UP. WE AWAIT THAT CONFERENCE CALL. WHEN WE COME BACK AFTER THE BREAK WE CONTINUE OUR CONVERSATION ABOUT MICRON AND THE CHIP LANDSCAPE. THIS IS BLOOMBERGTECHTV. ROMAINE: ANOTHER CHECK ON MICRON SHARES. WE WAIT FOR THE CONFERENCE CALL IN ABOUT AN HOUR FRESH OFF THE COMPANY'S LATEST QUARTERLY RESULTS THAT SHOWED A MASSIVE QUARTER AND THE CURRENT QUARTER, THE GUIDANCE IS GOING TO BE EVEN BIGGER. THE RESULTS COME AS THEY STRUGGLED AGAIN THE RECORD HIGHS OF MOMENTUM THEY SAW AT THE START OF 2026. SANDRA RIVERA JOINS US NOW, THE CHAIR OF THE FRENCH DEEP TECH COMPANY VSORA. NEEDLESS TO SAY, YOU KNOW A LOT ABOUT CHIPS, SANDRA. THAT IS WHERE I WANT TO GO WITH THIS. WHERE ARE WE IN THIS CHIP CYCLE? IF YOU LOOK AT THE NUMBERS WE GOT OUT OF MICRON, THERE IS A SENSE THAT THE RUNWAY IS STILL LONG AND THERE DOESN'T SEEM TO BE ABATING. WHAT DRIVES THE DEMAND BEYOND THIS QUARTER AND NEXT? SANDRA: THE MICRON EARNINGS ARE PRETTY EXTRAORDINARY AND VERY MUCH WHAT PEOPLE EXPECTED THEM TO BE WHICH WAS ANOTHER BLOWOUT QUARTER. BECAUSE THERE IS NO DIMINISHING OF THE DEMAND FOR AI. SO MUCH IS BEING DRIVEN BY THE INFERENCE AND THE DEPLOYMENT OF AI IN ENTERPRISES. NOT JUST THE PRODUCTIVITY SIDE, BUT NEW APPLICATIONS, NEW PRODUCTS AND SERVICES AND CAPABILITIES THAT ARE BEING ABLE TO BE BROUGHT FORWARD TO CUSTOMERS A LOT FASTER GIVEN THE POWER OF AI AND AI AGENTS. ROMAINE: AI AGENTS HAVE BEEN ALL THE TALK PARTICULARLY SINCE SOME OF THE EXCITEMENT AROUND MEDA -- META'S MUSE. DO THOSE AGENTS DRIVE MORE USE OF THE LARGE LANGUAGE MODELS AND DO THEY DRIVE MORE MEMORY CAPACITY THAN WE ARE ALREADY USING? SANDRA: EXPONENTIALLY MORE USE. WHEN YOU ABOUT HOW HUMANS INTERACT WITH AI, WE ARE TYPICALLY ASKING QUESTIONS AND GETTING RESPONSES BACK IN WHEN WE DEPLOY MORE COMPLEX WORKFLOWS, WE ARE STILL GATED BY HOW FAST WE CAN OPERATE, BUT AGENTS ARE OPERATING INDEPENDENTLY, CREATING MUCH MORE COMPUTE CAPABILITIES, MUCH MORE DEMAND ON COMPUTE AND THEN ALL OF THE OTHER HETEROGENEOUS CHIPS THAT GO INTO THE PLATFORM, THE NETWORKING CHIPS, THE MEMORY CHIPS THAT WE JUST HEARD FROM MICRON, INFERENCE ACCELERATORS THAT THE COMPANY VSORA IS BUILDING AROUND MORE BESPOKE SOLUTIONS THAT PROVIDE BETTER PERFORMANCE AT LOWER POWER AND GREATER LEVELS OF DETERMINANTS AND LOWER LATENCY. SO WE CAN SEE THE DEMAND FOR SEMI CONDUCTORS AS THE FOUNDATIONAL PLATFORM JUST CONTINUING TO RISE AS AGENTS JUST DRIVE EXPONENTIALLY MORE OF EVERYTHING IN TERMS OF THAT UNDERLYING PLATFORM. ROMAINE: ONE REASON WHY WE ALSO WANTED TO TALK TO YOU IS WHAT IS THE EVOLUTION OF CHIP DESIGN AND CHIP EFFICIENCY? THESE PRICES ARE NOT SUSTAINABLE. YES, THE DATA CENTERS, THE HYPERSCALERS WILL PAY WITH A CAN BUT IF YOU ARE A PC MAKER OR SMARTPHONE MAKER, GOOD LUCK. AT SOME POINT, THE MARKET OVERALL NEEDS TO DEMAND A CHIP THAT IS MORE EFFICIENT, LESS POWER-HUNGRY CHEAPER THAN WHERE WE ARE RIGHT NOW, I KNOW THERE ARE A LOT OF COMPANIES TRYING TO DESIGN A DIRECT ALTERNATIVE, HOW FAR ALONG ARE WE IN THAT PROCESS? WILL WE SEE MATERIAL COMPETITION IN THIS SPACE ANYTIME SOON? SANDRA: ABSOLUTELY. YOU HAVE SEEN SO MANY START UPS AND INNOVATION AND EVEN THE LARGE PLAYERS COMBINING WITH AND ACQUIRING CAPABILITIES FROM SOME OF THOSE STARTUPS AND SOME HAVE BEEN AROUND FOR SOME TIME. BUT NOW THEY ARE IN THE MOMENT IN TERMS OF THE DEMAND PROFILE REALLY MEETING THE CAPABILITIES OF WHAT IS MUCH MORE ATTUNED TO SPECIFIC CAPABILITIES WITHIN THE AI WORKFLOW THAT MAY BE HISTORICALLY HAVE JUST BEEN THE DOMAIN OF A GENERAL PURPOSE PROCESSOR, WHETHER THAT WAS THE CPU OR THE GPU. I DON'T THINK WE WILL SEE THE DIMINISHING OF HOW MANY NEW STARTUPS THERE ARE OR INNOVATION HAPPENING IN ALL CORNERS OF THAT PLATFORM. WHAT YOU WILL SEE IS CUSTOMERS BEING MORE SENSITIVE ON COST AND POWER. WHETHER YOU ARE BUILDING A SERVER, A PC, A PLATFORM OR A DATA CENTER, AND OF COURSE COST. THE COST OF THE TOKENS AND THE INFERENCE CALLS IF YOU WILL, WILL BE ONE OF THOSE CONSTRAINTS. YOU WILL SEE MORE INNOVATION AT THE SOFTWARE LAYER, TRYING TO MANAGE THE TOKENOMICS. ROMAINE WE WANT TO CONTINUE THE CONVERSATION AND TALK MORE ABOUT THE FUNDING FOR THE AI BUILDOUT. IT HAS BECOME AN INTERNATIONAL STORY. AT A CONFERENCE IN SINGAPORE, CHARLES SAID FUNDING IS BECOMING MORE GLOBAL. THOSE COMMENTS COME AS A NEW REPORT FROM BAIN CAPITAL SUGGESTS THE AI INDUSTRY WILL NEED TO EARN $6 TRILLION IN ANNUAL REVENUE TO JUSTIFY INVESTMENTS BEING MADE IN THIS SPACE. JP MORGAN'S ASSET MANAGEMENT TEAM, THE GLOBAL HEAD OF ALTERNATIVES. I WANT TO START OFF WITH THE IDEA OF WHETHER WE SHOULD START TO LOOK AT THE AI BUILDOUT AS A REAL ASSET RATHER THAN JUST AI FOR DATA CENTERS. ONE OF YOUR COMPETITORS MAKE THE CASE THAT WE HAVE CROSSED THE RUBICON AND WE MUST START TREATING THIS LIKE WE WOULD TO -- TREAT TRADITIONAL ASSETS. >> WE NEED TO FIGURE OUT THEY ECONOMICS OF THIS ASSET CLASS. WE ARE POSITIVE ON A HIGH OF COURSE BUT THERE IS A CONCERN AROUND BEING FOCUSED AND CONCENTRATED ON THIS SINGULAR THEME. WHAT IS COMING UP IN A LOT OF CONVERSATIONS, WORK AND YOU GO TO GET DIVERSIFICATION'S TO NOT HAVE ALL OF YOUR EGGS IN THE AI BASKET. ROMAINE: IS THAT POSSIBLE? EVERYTHING IS SO OVERLAPPING. SET ASIDE NVIDIA HAVING ITS FINGERS IN EVERYTHING. >> INCOME FOCUSED INVESTORS, WE WOULD GUIDE THEM TOWARDS COMMERCIAL REAL ESTATE. REAL ESTATE FUNDS ARE FOCUSING ON DATA CENTERS BUT THERE IS LARGE COMMERCIAL REAL ESTATE SPACE. OFFICES ARE RECOVERING. FOR GROWTH FOCUSED INVESTORS WHO WOULD LOOK AT OLD-SCHOOL PRIVATE EQUITY, YOU THINK ABOUT THE BUSINESS MODEL OF PRIVATE EQUITY, BUYING A COMPANY, IMPROVING THE COMPANY AND SELLING IT. AI IS HELPING PRIVATE EQUITY COMPANIES EXECUTE THOSE IMPROVEMENTS AND IF YOU ARE FOCUSING ON AREAS OUTSIDE OF DIGITAL, SO CONSUMER GOODS, THERE IS BENEFIT AS AI HELPING THEM BUT NOT BEING EXPOSED TO IT IS A BIG FACTOR. ROMAINE: DO INVESTORS WANT THE DIVERSIFICATION? THERE IS THIS IDEA OF, IF YOU BELIEVE THIS IS A ONCE IN 100 YEARS TYPE OF TRANSFORMATION WITH REGARDS TO AI, A LOT OF PEOPLE MAKE SURE THEY DON'T WANT TO MISS OUT. >> IT IS HARD TO MAKE THE CASE TO NOT BE INVESTED IN THE AI. IT IS SUPPORTED BY EARNINGS GROWTH. BUT THERE IS A CHALLENGE WHEN YOU THINK ABOUT PORTFOLIO CONSTRUCTION FOR THE LONG-TERM, BUILDING PORTFOLIOS FOR RETIREMENT. HOW LONG CONVEYS THE BUILDOUT GOING TO CONTINUE? IS IT WISE TO HAVE YOUR FULL FOCUS ON AI AS AN INVESTMENT? ROMAINE: HOW DIFFICULT IS IT TO FIND A TRULY DIVERSIFIED ASSET? I FEEL LIKE EVERY PRIVATE FUND IS INVESTED IN AI. SAME WITH PUBLIC MARKETS. EVEN COMPANIES THAT YOU DON'T THINK OF AS AI ADJACENT SEEM TO BE AI ADJACENT. >> AND PROBABLY MARKETS THE BENEFIT IS, MOST FUNDS ARE NOT CONSTRAINED TO A BENCHMARK. AS AN INVESTOR, YOU CAN HAVE A CONVERSATION WITH A FINANCIAL ADVISOR ABOUT THIS OR THAT PARTICULAR FUND AND IF YOU HAVE FUNDS IN THE REAL ESTATE SPACE WITH A 40% INVESTMENT IN DATA CENTERS AND FUNDS WITH A 0% INVESTMENT SO UNCONSTRAINED BY A BENCHMARK HELPS. THERE ARE FUNDS THAT CAN GIVE YOU TRUE DIVERSIFICATION. ROMAINE: WANT TO ASK ABOUT THE SHIFT IN YIELDS OVER THE LAST MONTH. THE MONTH OF SEPTEMBER WAS ONE OF THE MOST EXTREME MOVES WE SAW IN THE 10 YEAR YIELD AND WAIT SOME TIME. IT RAISES QUESTIONS AS TO WHETHER THIS BECOMES A SPEEDBUMP OR A COMPLETE IMPEDIMENT TO THE AI BUILDOUT. NOT JUST AI BUT OVERALL WHEN WE TALK ABOUT ALL TYPES OF ASSETS. ARE YOU WORRIED AT ALL? ARE THE YIELD LEVELS NOT CONCERNING FOR YOU? >> IT'S A CONCERN FOR GROWTH FOCUSED STOCKS AND INVESTMENT BECAUSE SO MUCH OF THE CASH FLOW IS IN THE FUTURE. YOU ARE DISCOUNTING IT AT A HIGHER RATE. THERE ARE SOME AREAS, LIKE PRIVATE CREDIT IS ONE OF THOSE AREAS BENEFITING FROM A HIGHER RATE WHERE WITH A RATE, COUPON PAYMENTS RESET HIGHER SO INVESTORS BENEFIT FROM THOSE. IT COMES WITH THE RISK. IF YOU THINK ABOUT THE COUNTERPARTIES TO THOSE PAYMENTS, COMPANIES THAT ARE PAYING NO HIGHER INTEREST RATE BILLS, THAT IS FINE AND A GOOD ECONOMY BUT IF WE HAVE A SLOWDOWN THAT CAN BECOME CHALLENGING. IT IS PARTICULARLY IMPORTANT TO BE SELECTIVE WHEN IT COMES TO PRIVATE CREDIT AND PRIVATE EQUITY, TO PICK THE RIGHT MANAGERS AND INVESTMENTS TO FOCUS ON. ROMAINE: GREAT TO HAVE YOU, AARON, STRATEGIST AT J.P. MORGAN. WE HAVE TO GO BACK TO THE BREAKING NEWS ON PARAMOUNT SKYDANCE. THERE WAS SPECULATION WHAT WE LEARNED EARLIER THAT THE MATTEL CEO STEPPED DOWN. QUESTIONS AS TO WHY AND WE KNOW WHY. HE IS JOINING PARAMOUNT SKYDANCE TO BE CO-CEO. A SENIOR ANALYST AT SEAPORT RESEARCH PARTNERS JOINS US. LOTS OF HEADLINES TODAY SURROUNDING PARAMOUNT SKYDANCE, A JUDGE SIGNING OFF ON THE SETTLEMENT, A DEBT DEAL THAT IS FLOATING AROUND THE LOOKS LIKE IT IS OVERSUBSCRIBED BY WHAT YOUR TAKE ON THE LEADERSHIP OF THE COMBINED COMPANY. ONCE THE DEAL IS DONE. ARE YOU ENCOURAGED THAT SOMEONE LIKE THIS, WHO DID A GOOD JOB TURNING AROUND MATTEL, COULD CARRY PARAMOUNT SKYDANCE TO THE NEXT LEVEL? >> I WOULD SAY THE FIRST THING, HIS APPOINTMENT COMES AS GOOD NEWS TO THE FANS OF THE BARBIE MOVIE SO THERE COULD BE A SEQUEL. HE DOES HAVE VERY GOOD OPERATING CHOPS WHICH WILL BE HELPFUL BECAUSE THERE IS A LOT OF EXECUTING ON THE PLANNED SYNERGIES THEY HAVE DISCUSSED AND THE $6 BILLION AT A RUN RATE WITHIN THREE YEARS. HE HAS A LOT OF GLOBAL EXPERIENCE. HE HAS BRANDING EXPERIENCE. AND HE HAS ENTERTAINMENT EXPERIENCE. HE WAS WITH FOX KIDS, BAKER STUDIOS THAT WAS SOLD TO DISNEY SO HE CHECKS A LOT OF BOXES THAT COULD MAKE HIM A VALUABLE ADDITION TO THE TEAM TO TAKE PARAMOUNT SKYDANCE INTO ITS EXECUTION PATH. ROMAINE: A LOT OF INVESTORS RAISED QUESTIONS ABOUT DAVID ALLISON'S LEADERSHIP ON A DATE THEY BASIS AND THE IDEA THAT, TO BE BLUNT, HE IS NOT REALLY STEEPED IN MEDIA IN THE WAY SOMEONE WOULD EXPECT THE CEO TO BE. I DON'T KNOW IF YOU WOULD CHARACTERIZE HIM AS AN ENTERTAINMENT EXECUTIVE. YOU THINK THE TEAM HE BUILDS WILL BE FOCUSED MORE ON CONTENT CREATION OR WILL IT BE PRODUCTS, MERCHANDISING, THE THINGS HE CUT HIS TEETH ON IESCO >> I THINK THEY HAVE TO BALANCE A LOT OF THESE ASPECTS. BRANDING IS IMPORTANT BUT ALSO, OPERATIONAL EXECUTION WILL BE IMPORTANT. I THINK THAT SHOULD HELP SATISFY SOME OF THE CONCERNS ABOUT DAVID ELLISON NOT HAVING SO MUCH OF THAT OBVIOUS BACKGROUND. SO IT IS THE COMBINATION. THEY WILL DO EVERYTHING, THEY HAVE TO DO EVERYTHING BUT I THINK THERE IS IMPORTANT SIGNAL WE HAD, THEY HAVE THE RIGHT PEOPLE TO PULL FROM IN THAT THE EXECUTIVE FROM HBO WILL BE IN CHARGE OF STREAMING AND CONTENT. CINDY, WHO CAME HERE, WILL BE DEPARTING. I THINK SO FAR, THEY HAVE DONE A GOOD JOB WITH SOME OF THE SENIOR LEADERSHIP. YOU'VE GOT CONTENT WITH A GOOD HEAD, AND YOU'VE GOT OPERATIONAL, GLOBAL OPERATIONS IN PERSPECTIVE WITH ANOTHER GOOD HEAD FOR THE COMPANY. ROMAINE: I HAVE TO ASK ABOUT THE FINANCIAL SIDE OF THIS. WE TALK ABOUT A COMPANY THAT IS BORROWING A LOT OF MONEY TO MAKE THE DEAL HAPPEN. BORROWING AT A TIME WHEN RATES HAVE GONE UP SIGNIFICANTLY. THE FINANCING OR INTEREST COSTS WILL BE SUBSTANTIAL AND I WONDER, ARE YOU ANTICIPATING HOW THEY WILL HANDLE THE COSTS? IS IT CUTTING COSTS INTERNALLY? IS IT SELLING OUT CERTAIN ASSETS? HOW MAY THEY HANDLE THAT? >> I DON'T EXPECT MUCH IN THE WAY OF SELLING ASSETS BUT THERE ARE LOTS OF SYNERGIES, COST-CUTTING, THEN THE LOW HANGING FRUIT AND OF THE SPECTRUM. REAL ESTATE CONSOLIDATION, I THINK THEY WILL PUT TOGETHER NEW BUSINESS AFFAIRS AND MARKETING EFFORTS BETWEEN THE TWO STUDIOS. THEY WILL KEEP THE BRANDS SEPARATE. THERE WILL BE A LOT OF UNFORTUNATE COST-CUTTING GOING ON TO MANAGE THAT DEBT LOAD, WHICH WILL BE A CHALLENGE BECAUSE ALL OF THE PREDECESSOR COMPANIES HERE, VIACOM, CBS, WARNER BROS. DISCOVERY, HAVE BEEN GOING THROUGH COST-CUTTING ROUNDS FOR YEARS. SO IT IS NOT GOING TO BE EASY TO CONTINUE TO FIND THESE PATHS. BUT THEY WILL USE NEW AI TOOLS, AND THEY WILL BE USING EFFICIENCIES FROM THAT AND COMBINING THE TECHNOLOGY PLATFORMS INCLUDING STREAMING TOGETHER. PUTTING A LOT OF THE CUSTOMER PLATFORMS TOGETHER. THERE IS A LOT OF AREAS THAT THEY HAVE BEEN TALKING ABOUT WHERE THEY HAVE REALLY BEEN, THEY HAVE BEEN GETTING TO THE $6 BILLION. I THINK IT WILL BE A CHALLENGE TO GET TO THAT POINT. THEY WILL HAVE TO MANAGE THROUGH WHAT THEY HAVE PROMISED AND THEY HAVE TO CONTINUE TO INVEST IN CONTENT AND ATTRACTIVE RETAIN SUBSCRIBERS. ROMAINE: I'M SURE WE WILL TALK AGAIN SOON ON THIS TOPIC. DAVID AT SEAPORT RESEARCH PARTNERS, A CLOSE LOOK AT PARAMOUNT SKYDANCE. WE WILL TALK ABOUT AI AND A MAJOR FOCUS OUT THERE RIGHT NOW. THE MANAGER -- MANAGING PARTNER AT NEXT LEGACY WILL BE ASKED ABOUT WHERE HE AND THE ATHLETES HE WORKED WITH ARE PUTTING THEIR MONEY. THAT IS NEXT YEAR ON THE CLOSE ON BLOOMBERG. -- NEXT ON THE CLOSE ON BLOOMBERG. ROMAINE: ADDITIONAL ATHLETES ARE LOOKING TO FINANCE AND INVESTING. ONE COMPANY LOOKING TO BRIDGE THE GAP IS NEXT LEGACY, A VENTURE CAPITAL FIRM THAT BACKS OTHER FUNDS AND INVEST IN TECH COMPANIES. THE DIRECT INVESTMENT COMES AS FIRMS POUR MONEY INTO AI NAMES WHILE OTHERS GET LEFT ON THE SIDELINES. RYAN NECE JOINS US, SUPER BOWL CHAMPION WITH THE TAMPA BAY BUCCANEERS AND HE IS ON MANAGING PARTNER AT NEXT LEGACY. LET'S TALK ABOUT WHERE YOU ARE PUTTING YOUR MONEY. IS IT ALL AND THEY I? RYAN: WE HAVE A DIVERSIFIED STRATEGY. WHEN WE THINK ABOUT THE TWO BUCKETS IN WHICH WE PULL LEVERS, WE HAVE THE FUND TO FUND BUCKET WHERE WE ARE ABLE TO ALLOCATE TO SOME OF THE BEST MANAGERS IN THE WORLD FROM ALL THINGS TECH RELATED AND WHEN WE THINK ABOUT DIRECT INVESTMENT, WHEN WE INVEST ALONGSIDE THOSE MANAGERS WE TRY TO DO OUR BEST TO INVEST IN A DIVERSIFIED WAY BUT THE SOUP OF THE DAY IS AI SO WE HAVE A LOT OF EXPOSURE THERE. WE ARE INVESTORS IN MANY COMPANIES. ROMAINE: ARE YOUR COMPANY -- CLIENTS MAINLY PROFESSIONAL ATHLETES? RYAN: WE WORKED TO CREATE AN OPPORTUNITY FOR PEOPLE TO HAVE A SEAT AT THE TABLE SO WE HAVE A HUNG -- A NUMBER OF HIGH NET WORTH INDIVIDUALS. WE HAVE ENDOWMENTS AND INSTITUTIONAL INVESTORS THAT HISTORICALLY HAVEN'T HAD ASSET -- ACCESS TO THE BEST INVESTMENTS. ONE THING WE WORK HARD AT, OUR FLAGSHIP FUND DOESN'T CHARGE A OF CARRY BECAUSE EVERYBODY IN THE FUND DISTRIBUTES PROCEEDS TO A CHARITABLE CAUSE. IT'S A POWERFUL WAY TO CONTINUE TO MAKE AN IMPACT. ROMAINE: FOR THOSE WHO DON'T KNOW, YOU ARE THE SON OF RONNIE LOTT, ONE OF THE HARDEST HITTERS IN FOOTBALL. BACK IN THE DAY, HE STARTED HIS OWN INVESTMENT FIRM WHICH WAS RARE FOR AN ATHLETE. NOW IT IS LIKE EVERY ATHLETE BASICALLY, THEY ARE NOT EVEN GOING TO RETIREMENT, THEY ARE STARTING THEIR OWN FUNDS OR GETTING INVOLVED IN INVESTING RATHER THAN TAKING A CHECK TO ENDORSE ANOTHER COMPANY. RYAN: MY FATHER WAS THE START OF SOMETHING. HE OPENED THE DOORS AND PAVED THE WAY, CREATED A BLUE AND FOR ATHLETES TO FOLLOW. HE DID IT ALONGSIDE JOE MONTANA AND OTHER ITALY 49ERS AND THEY TOOK ADVANTAGE OF THE RELATIONSHIPS AND FOUND WAYS TO LOT IS THAT. OTHER ATHLETES ARE REALIZING THEY ARE MAKING ENOUGH MONEY. THEY ARE MAKING AN EXORBITANT AMOUNT OF MONEY AND THEN TO ALLOCATE TO THE ASSET CLASS AND FIND WAYS TO BRING VALUE TO THE START UPS AND HOPEFULLY GENERATE SOME REAL RETURNS AND FIND OUT FOR, IT IS ASKED WRITING. YOU HAVE TO APPROACH IT WITH CAUTION. ROMAINE: BC HAS BEEN ON THE BACK FOOT OF LATE BECAUSE OF EARLY STAGE VC'S, I SHOULD POINT OUT. YOU SEE A LOT OF COMPANIES, TWO OF THE BIGGEST IN THE WORLD ARE STILL PRIVATE FOR SOME REASON AND I WONDER HOW THAT CHANGES WHAT YOU LOOK FOR AND WHAT YOU THINK COULD BE A HOME RUN OR A TOUCHDOWN, SO TO SPEAK. RYAN: THERE ARE TWO PARTS. COMPANIES ARE STAYING PRIVATE LONGER SO YOU HAVE A LOT OF PEOPLE THAT HISTORICALLY HAVEN'T HAD ACCESS TO ALTERNATIVES. THOSE COMPANIES ARE NOT GOING PUBLIC SO FOLKS LIKE MY RELATIVES WILL NEVER BE ABLE TO PARTICIPATE IN THE UPSIDE. A GATEWAY TO THEM IS HOPEFULLY TO BE ABLE TO ALLOCATE ALTERNATIVES. WE TRY TO PLAY A ROLE FOR THOSE THAT CAN MEET THE REQUIREMENTS. ARE THERE INDIVIDUALS OR COMPANIES THAT FIT INTO A BUCKET THAT ISN'T JUST MAINSTREAM, THAT ISN'T JUST ALL OF THE CAPITAL CONCENTRATED INTO OPENAI OR ANTHROPIC? WHAT ARE OTHER OPPORTUNITIES OUT THERE? WHEN WE THINK ABOUT THE COMMUNITY WE SERVE, IT IS POWERFUL FOR US TO SEE AMAZING OPPORTUNITIES THAT HOVER AROUND THIS AREA OF HUMAN OPTIMIZATION. WE ARE TRYING TO FIND WAYS TO OPTIMIZE OUR LIVES THROUGH TECHNOLOGY. ROMAINE: HAVE YOU ALREADY INVESTED IN ANY SPORTS-RELATED? RYAN: WE MADE AN INVESTMENT, AND LEANED IN WITH THE CHELSEA WOMEN'S CLUB, AND INCREDIBLE IP, ARGUABLY THE MOST SUCCESSFUL WOMEN'S SPORTS TEAM OF ALL TIME. AN OPPORTUNITY TO INVEST ALONGSIDE 776. IN THE CLEARLAKE TEAM THAT BROUGHT US IN THEIR. ROMAINE: WE MUST TALK AGAIN. RYAN: APPRECIATE YOU HAVING ME. ROMAINE: BRIAN NECE IS MANAGING PARTNER OVER AT NEXT LEGACY. OVER THE NEXT 20 HOURS, THINGS THAT COULD MOVE THE MARKET, ON THE BACK OF MICRON EARNINGS WE TALKED ABOUT AI. TOMORROW WILL, IT WILL BE DIFFERENT. WILL GET -- THERE HAS BEEN TALKED ABOUT AI DISRUPTION OF THE CONSULTING SPACE BUT IT IS AFTER THE BELLS WHERE WE WILL FOCUS ON NIKE'S BEEN ON THE BACK FOOT. THE CEO HAS BEEN ON THE HOT SEAT. LOTS OF QUESTIONS ABOUT THE DESIGN OF THE SHOES, ITS PRESENCE AND ITS MARKET SHARE GOING FORWARD. WE WILL HAVE A DISCUSSION ABOUT CONSUMER SPENDING. JOBLESS CLAIMS, ISM AND AN UPDATE ON CONSTRUCTION SPENDING. WE WILL HEAR FROM MULTIPLE MEMBERS TOMORROW. I THINK THAT IS ALL OF THE FED PRETTY MUCH OTHER THAN POWELL. KEEP AN EYE ON NASA AND SPACEX. THEY ARE TARGETING THE LAUNCH OF THE CREW 13 MISSION TO THE INTERNATIONAL SPACE STATION. WE WILL HAVE FULL COVERAGE RIGHT HERE ON BLOOMBERG. STICK AROUND. AT THE TOP OF THE HOUR, JOE AND KAILEY WILL BE UP WITH BALANCE OF POWER RIGHT HERE ON BLOOMBERG. ♪