Tesla Stock Surge, Bitcoin Stalls, China Tech Slowdown | Bloomberg Technology

welcome (0s)

• "Bloomberg Technology" is a program that explores the intersection of innovation, money, and power in Silicon Valley and beyond, hosted by Caroline Hyde and Ed Ludlow (10s).
• The program is broadcast live from New York (27s).
• The show will discuss Tim Cook's visit to China and its significance to the tech company (34s).
• The program will examine the reasons behind Tesla's post-election stock surge, whether it is due to fundamentals or hype (45s).
• Bitcoin's rally has stalled after reaching nearly $100,000, and the show will feature an interview with Kristin Smith from Blockchain Association to discuss this development (46s).
• The market is currently in "indigestion mode" (55s).

tech check (1m0s)

• The NASDAQ is up by a quarter percent, with Supermicro leading the gains at 13% due to confirmation that BDO USA will focus on its financials and the company's efforts to remain in the NASDAQ (1m22s).
• NVIDIA's stock is down by 3%, continuing to see profit-taking and concerns that competitors are building their own ships (1m42s).
• Chinese tech companies have had poor earnings, with the five biggest tech companies erasing $41 billion in value over the past week, and executives are asking investors for patience due to economic uncertainties (2m39s).
• PDD and Baidu, a front runner in AI development, have reported disappointing earnings, and Morgan Stanley has cut Chinese equities to slightly underweight, while Goldman Sachs has lowered its MSCI rating (3m2s).
• Executives from global firms, including Tim Cook, are traveling to China to discuss concerns with the country's premier, with Cook expressing his high valuation of partners in China (3m42s).
• The geopolitical contentions between the US and China, as well as earnings from tech giants, are being closely watched, and the market is entering a bear market for Chinese tech companies (2m7s).
• The Beijing stimulus is seen as crucial in determining whether Chinese companies can win back investors (2m32s).

china tech slowdown (4m0s)

• China is crucial to Apple's supply chain and is the company's second-largest market behind the US, where Apple is currently struggling against Chinese domestic smartphone makers (4m11s).
• Apple has to invest more in certain countries to earn the right to sell their products, and in China, they have to continue to build and invest (4m45s).
• Indonesia is pushing back on lifting its iPhone 16 sales ban, demanding more investment from Apple, citing the company's significant investment in manufacturing in Vietnam, a smaller market for iPhone sales (4m52s).
• NVIDIA has big exposure to China in terms of selling into that market, and the company's CEO emphasized ties to the region and weighed in on the incoming administration during a recent visit to Hong Kong (5m34s).
• NVIDIA's CEO stated that the company will balance compliance with laws and policies, advance technology, support customers, and serve customers worldwide, regardless of the new administration (5m55s).
• From an investor perspective, understanding Chinese-US relations and their impact on tech investments is crucial, and investors need to consider the potential retaliation from China and the US's stronger position compared to 2018 (6m31s).
• China's current economic situation, being in the throes of a balancing recession, limits its maneuverability on the stimulus side, which affects its interaction with the US (6m49s).

trump vs china (7m0s)

• The Chinese technology giants may be accretive in the future, but it's tough to predict with the Chinese Communist Party's actions, and without fiscal stimulus, it's challenging to get out of the balancing recession where demand is lacking (7m16s).
• If China announces large-scale fiscal stimulus, it would be a good time to invest in Chinese tech stocks, as the consumer can come back alive, and the economy can start growing (7m36s).
• US companies with significant exposure to China, such as those in the tech industry, may be hurt by a potential Trump win, but this is not new news, and these companies have been planning for this possibility (8m12s).
• NVIDIA's recent decline is likely due to a combination of factors, including exposure to China, limited clients, and potential competition from large tech companies like Amazon, which is ramping up its efforts in the lucrative space of AI technology (8m48s).
• It's not advisable to bet against big tech, as we are in the mid-to-late 1990s cycle, and big tech is driving innovation, particularly in AI, which is not just a 2023 trade, but a long-term theme (9m37s).
• To play the AI theme, one needs to understand how companies will use AI in the future and identify potential suppliers that may come online, such as Amazon, and focus on the applications and users of AI technology (9m52s).
• The rich pickings in the AI theme have been in applications and healthcare, and there is potential for outsize gains in biotech companies that can figure out advanced drug development using AI, and industrial companies that can improve logistics using AI (10m30s).
• Intel's stock is up 0.5% due to reports that the CHIPS Act grant will go towards factory building efforts of nearly $8 billion, which was already discussed with the Commerce Department (11m44s).
• Tesla's stock surge, up 31% over the last month, is likely due to market exuberance surrounding the new administration that is likely to come in at 2025, according to UBS analysts (12m33s).

tesla stock surge (13m0s)

• Tesla's stock surge has been analyzed by UBS, which suggests that the run-up in the stock price may be due to Elon Musk's close relationship with Donald Trump, but also points out that taking away EV tax credits in the US may not be a positive for EV demand as a whole (13m18s).
• UBS is also bearish on Tesla's autonomous vehicle policy, noting that the company does not have an actual robotaxi, whereas Waymo, a competitor, has a robotaxi and was valued at $45 billion (13m49s).
• The price target from analysts who rate Tesla is well below the current price, and the Relative Strength Index shows that the stock is in overbought territory, but it's difficult to bet against the stock (14m16s).
• Tesla's stock is known for its momentum, with large price movements when it rises or falls, and options activity contributes to these outsized moves (14m57s).
• Rocket Lab's shares are surging after the company successfully launched its 56th Electron missile, with a 3% increase in stock price, and the company has also received funding from the US Commerce Department to promote and build more solar cells (15m39s).
• Rocket Lab has had 14 launches this year, beating its record of 10 last year, but this is still less than SpaceX's over 100 launches this year (16m20s).
• The company is also getting money from the US government for chip manufacturing, with a $23.9 million contract from the Department of Commerce related to the CHIPS Act (16m59s).
• Rocket Lab's subsidiary in New Mexico makes solar cells, one of the only companies in the US to do so, and the funding will help promote and build more of these components (17m14s).
• The French government is offering to buy the advanced computing assets from Atos for as much as $650 million, including the AI business and IT supercomputers, in an effort to keep these strategic assets within French control (18m49s).
• The deal is crucial for Atos, which is under a lot of distress from a debt perspective, and the French state wants to ensure these assets remain safe and within local hands (19m17s).
• The supercomputers in question are important for simulations of nuclear activities, which are key to France and the French government (19m39s).
• Other assets, including cybersecurity and mission-critical systems, will be up for auction, with other French companies likely to make bids for these activities (20m10s).
• The goal is to find the right price point, as creditors want a good price for the assets, and French defense companies bidding for these assets will also want a good price (20m34s).
• A significant French defense company is interested in the mission-critical assets, but has not made a bid yet (20m47s).
• The deal is complicated, but the French state has done a deal with the supercomputers, and another deal could be done (21m0s).
• The strategic assets and sovereignty of French technology are at stake, which is critical for the civilian industry and military deals (21m16s).
• Online verification company ID.me is valued at $1.8 billion (21m49s).
• Insta 360, a Chinese rival to GoPro, is considering an IPO in Hong Kong after plans for listing in mainland China stalled, and could seek a valuation of $2.1 billion (22m1s).
• Sony is developing a portable console that could play PlayStation 5 games on the move, aiming to expand its reach and compete with Nintendo in the portable gaming market (22m15s).
• Bitcoin has been on a run, but its practical implications for legislation and the appointment of a new crypto czar at the White House are still unclear (22m41s).
• Bitcoin pulled back after flirting with a valuation of $100,000 at the end of last week (23m21s).
• Gary Gensler announced he's stepping down from his seat in January, which wasn't a surprise to the industry as they felt boxed in by his regulation by enforcement approach, and now they're excited to see him leave and work with the newly elected Congress to get a regulatory framework in place (24m12s).
• The industry is looking forward to getting new people into key positions and resetting their relationship with the government, with a great opportunity to get a lasting regulatory framework in place that will be appropriate for the industry for decades to come (24m43s).
• The SEC is currently pondering names for the new chair, with the industry looking for someone with exterior experience and a deep understanding of crypto, who can navigate the people and personalities of the industry and government (25m16s).
• The industry doesn't care who the new chair is, as long as it's someone who has a deep understanding of having an open dialogue and can figure out the regulatory environment (25m29s).
• A crypto czar position at the White House would help facilitate conversations and ensure all the pieces are done, but it's not mutually exclusive with having a strong SEC and CFTC chair (26m24s).
• The ideal candidate for the crypto czar position would be someone who understands the crypto industry and can navigate government, with a nuanced understanding of the relationships and personalities involved (27m6s).
• The industry is willing to step in and do the kind of role required, but it's a tough position to find, and the new chair needs to be able to walk and chew gum at the same time, overseeing trillions in passive investment and the implications of AI on ETF investment (27m28s).
• The industry wants to get the regulatory framework correct now, as it will be the foundation of financial services and the internet going forward, and it's essential to get the rules right so that consumers feel protected and institutions feel comfortable coming in (28m23s).
• The US government is working on regulating blockchain and its applications, with the goal of making the US a leader in this field, and understanding the rules of the road for developers to build on top of blockchains (28m41s).
• Kristin Smith has spoken to people about the qualifications needed for a potential blockchain czar and has offered ideas on the topic (29m6s).
• The US government is facing off against Google in federal court over allegations of monopoly in online advertising, with the co-CEO of Ad Market advising the DOJ on remedies (29m29s).
• The case against Google is sprawling, with some arguing it's about dominance in search, while others worry about dominance in advertising (29m49s).
• The co-CEO of Ad Market has played a role in the case, writing a memo on behavioral remedies to fix the search and search advertising markets, and speaking with the DOJ about his ideas (30m1s).
• The proposed final judgment in the case includes ideas for making sure Google complies with behavioral remedies, which could help create a more competitive market (30m19s).
• The co-CEO of Ad Market believes that some of the remedies being discussed could benefit his business, which is focused on placing advertising without depending on dominant forces (30m54s).
• He thinks that breaking up Google's dominance could create new opportunities for investment and innovation in the search and advertising markets (31m0s).
• The co-CEO of Ad Market believes that selling off Chrome could lead to new entrants in the browser market, including those built around generative AI (32m18s).
• He thinks that having multiple browsers and search engines could create a more innovative experience for users and searchers (32m27s).
• However, building infrastructure around search or Chrome is very expensive, which could make it difficult for new entrants to compete with Google (32m53s).
• The co-CEO of Ad Market notes that half of the clicks that Google sells start on third-party sites, and questions whether new entrants could get access to those results and curate their own experiences (33m7s).
• The discussion revolves around the growth of ransomware and a company called Halcion, which is focused on mitigating the risk of ransomware attacks, with a valuation of $1 billion (34m45s).
• Ransomware has seen explosive growth over the last five years, with corporations experiencing losses in the tens to hundreds of billions of dollars per year (35m2s).
• Halcion is the first anti-ransomware company, and its mission is to figure out how to mitigate as much risk for customers as possible (35m20s).
• The company's technology is different in that it breaks the leverage that ransomware attackers get to demand payment, by stopping them from encrypting systems and stealing data (35m44s).
• Halcion's approach is like a new type of focused antivirus, specifically designed to combat ransomware, rather than general malware and spyware (36m45s).
• The company's theory is that by focusing on ransomware alone, it can achieve higher efficacy and mitigate more risk than generalized security solutions (37m14s).
• Halcion integrates with other cyber players, such as Palo Alto, Cisco, and Dell, but is building its own platform specifically around mitigating the risk of ransomware threats (37m55s).
• The company's end goal is to use its raised funds to continue developing its platform and combat the growing threat of ransomware attacks (38m30s).