Micron Plunges On Weakness, Musk Wields Political Power | Bloomberg Technology

Micron's Stock Plummets, Analyst Cites Inventory Crunch

• Micron's stock plummeted by over 70% on its worst day since March 2020, erasing most of its year-to-date gains, following the release of its earnings report, which missed expectations by 12% (1m2s).
• Analyst Jake Silverman attributed the decline to an inventory crunch, particularly in high-bandwidth memory for AI applications, which started earlier this year as companies built inventory ahead of price increases (1m32s).
• Silverman noted that despite the current weakness, there is typical seasonal demand and potential for growth in the second half, driven by content expansion within AI PCs and smartphones (2m5s).
• Micron's data center business saw 400% growth in AI demand and sales, but this has not yet translated to significant revenue growth, as high-bandwidth memory is still a nascent product for the company (2m33s).

Investor Sees Buying Opportunity in Micron's Decline

• Investor Kim, with 35 million dollars in assets under management, views Micron's decline as part of a boom-bust cycle common in the memory industry, and sees the current downturn as a buying opportunity rather than a reason to sell (3m38s).
• Kim emphasized that Micron has terrific growth prospects, with few competitors in the space, and that investors should look beyond short-term fluctuations and consider the company's long-term potential (4m31s).

Elon Musk's Political Influence and Other Tech News

• Elon Musk is also mentioned as wielding political power, particularly in the context of a potential US government shutdown, although no further details are provided (42s).
• Additionally, Apple has halted its plans for an iPhone hardware subscription service, but no further information is given (51s).

Micron's Stock Decline and the Need to Focus on AI

• Micron's stock price is experiencing a decline, which could be attributed to tax loss selling, and the company's overall consensus price target is still at $135, leaving room for growth from its current price of $85 (5m5s).
• Micron's CEO, Sanjay Mehrotra, needs to signal to the market that the company is focused on AI, as this sector has been driving the market, with companies like NVIDIA and Meta leading the way (5m28s).
• The AI sector is currently driving demand, but there are concerns that this demand may not be sustainable in the long term, as companies may eventually stop building out their data centers (6m0s).
• Micron operates in a small world where its clients are either all in or all out, and the company's business can be lumpy, with sudden stops in demand from clients (6m34s).
• Investors need to be aware that the current spending on AI and data centers is not sustainable in perpetuity, and there will be a day when companies will need to reap the rewards of their investments (7m1s).
• The construction of mega clusters is not a signal of a pullback in spending on AI and data centers, and companies like Microsoft, Google, and Meta have enough cash flow to continue building out their data centers (7m24s).
• The macro policy and a new administration are unlikely to dampen the spirits of companies building data centers, as they have enough money to continue their investments (7m26s).
• The current focus on software trades may eventually shift back to hardware, which is driving demand, and software will likely follow (8m8s).

US Government Supports Domestic Semiconductor Production

• The Biden administration has cemented a deal to give SK Hynix close to $460 million in grants and $500 million in loans for a facility in Indiana that will focus on packaging chips, as part of efforts to build a domestic semiconductor supply chain (9m8s).

Elon Musk's Influence on Government Shutdown

• Elon Musk's influence in Washington is being felt, as he helps kill a stopgap funding bill (9m37s).
• A last-minute government funding bill has been scrapped after Elon Musk urged lawmakers and President-elect Trump to risk a government shutdown (9m59s).
• Elon Musk's influence has been demonstrated as he used his social media platform to gin up opposition to the spending deal, which was negotiated for weeks or months to avert a government shutdown (10m25s).
• President-elect Trump and Vice President-elect JD Vance chimed in to oppose the spending deal, which may lead to a government shutdown as soon as Saturday morning if lawmakers cannot come up with a new deal (10m35s).
• Elon Musk is building a team and taking expertise from those he knows, attending meetings at Mar-a-Lago, and using his platform to give wing to his ventures, including the Department of Government Efficiency (11m14s).
• The Department of Government Efficiency, led by Elon Musk and Vivek Ramaswamy, aims to cut down the size of government, reduce spending, and apply artificial intelligence expertise to government data to find efficiencies (11m37s).
• The entity is hiring, including software engineers with artificial intelligence expertise, and has already hired about 10 people, including an executive from The Boring Company and a former Trump team chief technology officer (12m0s).

Tesla's Autonomous Vehicle Plans and EV Market Outlook

• Tesla is in early talks with the city of Austin about rolling out a fleet of autonomous vehicles, with employees communicating with the city since at least May to establish safety expectations (12m42s).
• The 2025 Trump administration may bring changes to the EV landscape, including possibly winding down EV incentives and fast-tracking autonomous driving (13m11s).
• Despite some people saying EV growth is slowing down, the data shows that one out of five cars sold globally in 2024 is electric or hybrid, with 25% year-over-year growth and 17 million EVs sold globally (13m36s).
• The US-China trade relationship may affect the EV market, with the US having already slapped 100% tariffs on Chinese cars sold in the US, and the possibility of China retaliating with tariffs on US cars (14m10s).
• The US needs to be careful when imposing tariffs on other countries, as it can lead to retaliatory measures, and the US has more automakers selling cars to China than vice versa (14m33s).
• Tesla's share price has seen significant growth, with 76% growth since January 1 of this year, but the company needs to introduce new products to maintain this growth (15m7s).
• Tesla's growth this year is a significant improvement from the lower sales growth in 2021 and 2022, but the company still needs to get its new lower-cost car into the market (15m26s).
• There are rumors of a new sub-$30,000 Tesla model coming in 2025, but it's unclear if this will happen, and 2025 could be a make-or-break year for the company (15m46s).
• As an investor, it's challenging to read the tea leaves and understand whether Tesla will cut costs on current models or introduce new affordable options, as Elon Musk seems more interested in the robotaxi side (16m10s).
• The energy industry is becoming increasingly important for auto companies, and Tesla's relationship with President Trump and its energy business could be key factors in its success (16m45s).
• California is focusing on ensuring EV adoption, and there are also potential unionization efforts in the EV space, with Rivian reaching a deal to make unionization easier (17m13s).
• Labor issues are a significant challenge for EV companies, and Elon Musk's efforts to speed up production may be hindered by potential worker strikes (17m36s).

Apple Cancels iPhone Subscription Service, Faces Regulatory Pressures

• Apple has canceled its plan for an iPhone subscription service, which would have allowed consumers to pay monthly for a new phone each year, and has disbanded the team working on the project (18m52s).
• The European Commission is pushing Apple to open up its iPhone systems to rivals, requiring the company to rework its iOS to make devices from other companies more compatible with the ecosystem (19m14s).
• Apple is close to resolving the ban on iPhone 16 sales in Indonesia after the country's president approved a $1 billion investment from the tech giant, which will be used to produce Air Tags in a local facility (19m28s).
• The investment is a significant move for Apple, as Indonesia is an important potential growth market for the company, particularly in Southeast Asia (20m11s).
• The new facility will produce around 20% of Air Tags, a product that, although not Apple's most popular, is still important, and the company is planning to release a new version with better range and privacy next year (20m30s).
• The European Union is pushing for Apple to open up its ecosystem to third-party products and services, including allowing users to use third-party earbuds and watches with their iPhones (21m19s).
• Apple is resisting this push, arguing that it wants to maintain a closed ecosystem with a private design and clean user interface, and is using Meta as an example of a company that could potentially access user data if the ecosystem is opened up (21m54s).

H1 Visa Overhaul and Nasdaq 100 Rebound

• The US government is considering an overhaul of the H1 visa program, which could impact the tech industry's ability to hire foreign workers (22m28s).
• The Nasdaq 100 is back in positive territory after a big selloff the previous day, with the Fed potentially cutting interest rates twice next year (23m16s).

Micron's Disappointing Forecast and TikTok's Supreme Court Challenge

• Micron's stock is feeling the pain after the company's forecast did not live up to expectations, despite delivering an 84% jump in revenue (24m1s).
• TikTok has a glimmer of hope as the US Supreme Court is set to hear the social media app's challenge to a possible ban in the US, with just one month to go before the ban could take effect (24m12s).
• The Supreme Court's decision on the potential ban of a social media app could be a game-changer, but it's essential to remember that the court may rule based on the law, not personal views (24m33s).
• If the ban goes through, it would be the first time a social media app has been banned in the country, and the court is moving unusually fast on this issue (24m51s).
• The justices will rule as they may, and there's speculation about how they might decide, but the outcome is uncertain (25m27s).
• The argument will be on January 10, and the law will take effect nine days later, leaving a remarkable timeline for the decision (25m51s).
• Besides the ban, another possible outcome is that TikTok could be forced to divest, and Beijing's export rules state that Chinese companies cannot sell their algorithms in the U.S. (26m21s).
• Potential American bidders are already lining up to take over the U.S. iteration of the platform if ByteDance feels the squeeze in the 11th hour (26m51s).

Amazon Delays Return to Office, Biden Administration Overhauls H-1B Visas

• Amazon is delaying the return to office for thousands of employees, pushing back return dates to March and April, with the vast majority of employees having desks starting January 2 (27m33s).
• The Biden administration has announced an overhaul of H-1B visa standards, expanding who can receive the work visas, which could make a difference for companies and entrepreneurs (27m58s).
• The revised H-1B visa process could make it easier for people to hire immigrants and for immigrants to start companies, with entrepreneurs being able to apply for the visas (28m30s).
• The overhaul could lead to more companies being started, especially by students who complete their education in the U.S. and may be deterred from starting a company without a simplified visa process (29m6s).
• There is a need for clarity on the ability of students to stay in the US if they find a job or build a business, with a focus on immigrant founders who are more likely to build successful businesses (29m32s).
• Immigrants are responsible for the majority of the value generated from new companies, with 55% of multibillion-dollar success stories started by immigrants (30m10s).
• The correlation between immigration and success is due to the perseverance and vision required to make the journey to a new country, learn a new language, and build a new network (30m51s).
• The experience of immigration is similar to starting a business, requiring a vision, perseverance, and the ability to overcome obstacles (31m1s).
• People who have made the journey of immigration are more likely to succeed in building a business because they have already demonstrated their ability to overcome challenges and adapt to new situations (31m55s).
• Many leaders of successful companies, including Elon Musk, are immigrants who have built successful businesses and have the ear of the next elected president (32m19s).
• There may be a pushback against immigration, but it is hard to predict, and personally, all immigrants should be welcomed, as they bring tremendous benefits to the country (32m38s).
• Immigrants tend to be able to build technology offshore, leveraging their connections to find engineers at lower salaries, and can make connections with people from their home country (33m17s).
• As a fund, they are immigrants who came to the US as kids and serve as a bridge between cultures, understanding the culture of building a business in America and identifying unusual qualities that make someone potentially able to build a big business (33m50s).
• They specialize in finding the missing pieces, such as storytelling or building a network, to help immigrant founders succeed (34m21s).

Perplexity's Valuation Soars Amidst Legal Issues

• Perplexity, an AI startup, has reached a valuation of $9 billion after its third funding round, which was led by Partners and computed earlier this month, with the company's valuation tripling since June, indicating strong investor demand in the AI market (35m5s).
• Perplexity has been well-used by consumers, but the company is currently dealing with some legal issues, and it has seen strong growth, with users querying a lot more and the company rolling out more customized search options for people who want financial or sports data in real-time (36m8s).

Salesforce CEO on AI, Time Magazine, and Government Efficiency

• Salesforce CEO Marc Benioff says the company's work in AI is the most exciting technology he has worked on, but he is not giving up his stake in legacy media, as he recently spoke about the future of Time Magazine and the decision to name Donald Trump as Person of the Year (37m10s).
• Benioff stated that he would not endorse any political candidate and stopped all funding of political candidates when he bought Time Magazine, but he is excited about the magazine's Person of the Year gala featuring President Trump (37m29s).
• Benioff believes that AI and agents are critical in achieving the next level of efficiency and capability inside governments and hopes to use these technologies to achieve a balanced budget, which he thinks is a bipartisan issue (38m13s).
• When asked if he would consider working alongside the government on a task force, Benioff stated that he is highly conflicted as a media owner, but his company will always say yes when governments ask for help in making their country more effective, especially in regards to artificial intelligence (38m46s).
• There are reports that Benioff may be looking at selling Time Magazine, but he did not comment on the truth of these reports, and when asked if he would consider offering his expertise in efficiency to the government task force if he sold the magazine, he did not provide a clear answer (39m23s).
• Marc Benioff stated that every American should do what they can to make America successful and support the President of the United States, emphasizing the importance of fair and balanced journalism, which is why he is proud to be an owner of Time Magazine (39m50s).

Snapchat Faces Lawsuit Over Counterfeit Drug Sales

• A lawsuit is arguing that Snapchat has helped dealers sell children deadly counterfeit drugs, and if successful, it could change the internet as we know it, with fentanyl becoming one of the leading causes of death among teenagers, killing over 1600 people (40m48s).
• All social media platforms are implicated in the issue, but Snapchat is being singled out due to its disappearing messages feature, which makes it difficult to track evidence of crimes (41m18s).
• Snapchat has removed 2.2 million pieces of drug-related content in 2023 and blocked many dealer accounts, and the company is committed to fighting against the fentanyl epidemic (42m5s).
• Snapchat is using AI technology to detect and remove drug-related content, and has strengthened its safeguards, including limiting the number of strangers that its recommendation engine connects teenagers to (42m35s).
• The lawsuit could have broad-reaching effects, and the company is still going to court despite its efforts to combat the issue (43m35s).

Micron's Stock Decline Due to Weakness in PC and Smartphone Chips

• Micron, the biggest maker of memory, is off by 6% after its forecast did not live up to expectations, with weakness in PC and smartphone chips being the main reason, marking its worst day since March 2020 (43m51s).