Apple & Amazon Ease Megatech Nerves; Trump Says GOP Should Ditch Filibuster

0:00Hello, I'm Stephen Carroll. I'm in Brussels where many of Europe's biggest decisions get made. And I'm Caroline Hepker in London with the hosts of the Bloomberg Daybreak Europe podcast. We're up early every weekday keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break.

0:37So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens. It's smart, calm and to the point. And it fits into your morning. You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. On Apple, Spotify, YouTube or wherever you get your podcasts.

1:02Bloomberg Audio Studios. Podcasts. Radio. News. Good morning. I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Well, Karen, the jump in Nasdaq futures follows earnings from Apple and Amazon. Let's begin with the iPhone maker. Those shares are up 2 % in early trading. Apple did blame a surprise decline in China revenue on supply disruptions, but it's predicting it will return to growth in the world's biggest smartphone arena as the iPhone 17 gains momentum. Mark Gurman is managing tech editor for Bloomberg News. What stands out here is iPhone obviously grew tremendously, 6 % year over year.

1:45They beat in nearly every product category, except the iPad had an extremely slight miss on Wall Street forecasts. And again, those are just forecast numbers that get made up anyways. So I don't think too big of a deal there. The big one, though, is a big decline and miss in greater China. I think some of that can be attributed to the iPhone Air delay, which was not expected when they originally announced the iPhone Air. Bloomberg's Mark Gurman says Apple's iPhone 17 and 17 Pro got off to a fast start in September with 29 percent year on year China sales growth in the first two weeks of October.

2:19Well, the big tech winner this morning, Nathan, is Amazon. Those shares are up more than 12 and a half percent. Amazon's cloud unit posted the strongest growth rate in almost three years. Amazon Web Services reported third quarter revenue of$33 billion. That's an increase of 20 % from the prior year and the biggest year-over-year rise since the end of 2022. Poonam Goyal is senior retail analyst at Bloomberg Intelligence. They hit it out of the park. Sales were very good across the board, across all business segments, AWS, online, advertising, even physical stores. So from a top line perspective, very, very encouraging results.

2:57In fact, AWS was probably the bright spot here. 20 % gains. We haven't seen that in a while. And Bloomberg Intelligence senior retail analyst Poonam Goyal says Amazon's total sales rose 13 % to more than$180 billion. I hear Netflix shares are moving higher this morning as well. The streaming giant has announced a stock split. Let's get more from Bloomberg's John Tucker. John. And Nathan, this is the second split in the last 10 years for the streaming industry leader, Netflix approving a 10-for-1 stock split. The company wants to make its share price more accessible for employees who take part in the company's stock option program.

3:34Netflix is one of only 10 in the S &P 500 with a share price above$1 ,000. Stockholders of record at the close of trading November 10th are going to receive nine additional shares for every share held. At the same time, Netflix is kicking the tires over at Warner Brothers Discovery. Reuters is the latest news service to report Netflix is exploring a bid for their studio and streaming businesses. Bloomberg News reported earlier that Netflix and Comcast are weighing bids for parts of that company. Netflix shares up over 3 % pre-market this morning. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you.

4:12Well, Bloomberg News has learned Intel is in preliminary talks to buy artificial intelligence chip startup SambaNova systems. Sources say any deal would likely value SambaNova at below the$5 billion it garnered in a 2021 funding round. SambaNova designs custom AI chips that aim to rival those offered by NVIDIA. Well, speaking of NVIDIA, Karen, Bloomberg News has learned the AI chip giant plans to back another AI startup. Sources say it plans to invest as much as a billion dollars in Poolside. In another development, NVIDIA CEO Jensen Wang told reporters he still hopes to sell chips from the company's Blackwell lineup to customers in China, though he has no current plans to do so.

4:52Speaking this morning at the APEC CEO Summit in South Korea, Wang talked about the AI revolution. This year, AI became profitable. And when something becomes profitable, you want to manufacture more of it. Just like when you're manufacturing chips and wafers and DRAM, if the manufacturing of those chips were profitable, you want to build more factories to create more chips. And earlier this week, Jensen Wang's NVIDIA became the first company to reach a$5 trillion market cap. And checking the shares right now, they're up nearly 2%. Well, Nathan, let's get to the latest now on the U.S.-China trade truce.

5:32Chinese President Xi Jinping is warning the world not to break supply chains. Xi's remarks at the APEC summit in South Korea came after he sealed a deal with President Trump to put rare earth restrictions on hold for a year, while the U.S. will roll back some tariffs and export controls also for a year. Treasury Secretary Scott Besson says this keeps the relationship on hold for now. My guess is a year from now we'll be back at the table and we'll get another delay, another roll, because what everyone misses is the Chinese have rare earths, but we have President Trump's threat on tariffs. He gave the team maximum negotiating leverage.

6:14Treasury Secretary Scott Besson spoke on Fox News. We get more on President Xi's remarks from Bloomberg's Jill Deesis in Hong Kong. You're seeing something that's really kind of like outwardly focused on that idea of building unity within the region in particular. I think, you know, obviously that Frederick aside from Xi Jinping, you know, we've certainly seen some concerns elsewhere in the region, particularly from Western companies who are concerned about being left out of the domestic market. We know that China itself has very many challenges within its domestic economy that it's really sort of focused on and has actually made several efforts this year to try to build up those domestic industries.

6:50And Bloomberg still dies his report. She used his speech to tell some seven hundred billion dollars in foreign investment that China's brought in over the last five years. And Washington, Karen, the government shutdown has now lasted a full month. On this 31st day of the funding fight, President Trump is calling on Senate Republicans to end it by taking Democrats out of the picture. In a social media post late last night, the president wrote in all caps, initiate the nuclear option, get rid of the filibuster and make America great again. Senate Majority Leader John Thune says he has not had those discussions with the White House.

7:22He says Democrats want to prolong the shutdown. It's all about leverage. That's what they're making it all about. leverage. Majority leader John Thune spoke on the Senate floor as the CEOs of four major airlines met with Vice President J.D. Vance at the White House with air traffic delays piling up during the shutdown. I worry about the pilots who haven't gotten paid in a long time. I worry about the air traffic controllers who, of course, make this entire system extra safe. Vice President Vance met with the CEOs of United, American, Delta and Southwest Airlines. They called on Democrats to back the Republicans' clean stopgap spending bill.

8:00It's time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. Buckingham Palace says that King Charles is stripping his brother, Prince Andrew, of his remaining titles and evicting him from his royal residence. The move follows revelations about Andrew's relationship with convicted sex offender Jeffrey Epstein. Greg Gross is a UK Royals expert at King's College in London. He's taken the maximum steps that I think are available to him. And this is about getting the house in order.

8:39The palace says Prince Andrew will now be known as Andrew Mountbatten, Windsor. Two people were found dead in flooded basements after heavy rains in New York City yesterday. In one case, a Brooklyn victim was a 39-year-old man. In Upper Manhattan, another man also drowned from flooding in a basement. Late last night, the FAA issued a temporary ground stop for Newark Airport in New Jersey due to staffing issues. It comes as a JetBlue flight from Cancun to Newark was diverted to Tampa, Florida Thursday after a sudden altitude drop led to multiple passengers being hospitalized. It may not be the Louvre, but the theft is no less devastating to the operators of the Oakland Museum of California.

9:23Police say suspects stole more than 1 ,000 items from the museum's collection, including metalwork jewelry and Native American baskets. Museum director and CEO, Lori Fogarty. We imagine a lot of this kind of material might end up in a pawn shop or an antique store or even a flea market or swap meet, which is why it's so important to get the word out to the public because people may see something that looks kind of not like it should be there. Museum Director Lori Fogarty says the theft happened on October 15th at an off-site storage facility. Global News 24 hours a day and whenever you want it with Bloomberg News Now.

10:01I'm Michael Barr and this is Bloomberg, Karen. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. Week 9 of the NFL underway in Miami. Baltimore got its start. Quarterback Lamar Jackson back after missing the last three games. He threw four touchdown passes. The Ravens beat the Dolphins 28-6. They'll play game sticks in the World Series tonight in Toronto, and the Blue Jays lead the Dodgers three games to two. They can win their first championship in 32 years. New manager of the Washington Nationals is Blake Putera. He's only 33 years old.

10:33He'll be the youngest in the majors in 50 years. He started his minor league managing at age 25. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. I'm Carol Masser. And I'm Tim Stenevec, inviting you to join us for the Bloomberg Business Week Daily Podcast. Now, every day, we are bringing you reporting from the magazine that helps global leaders stay ahead. We've got insight on the people, the companies, and trends that are shaping today's complex economy. That's right, Tim. We're all over global business, finance, tech news, all as it is happening in real time.

11:07And we've got complete coverage of the U.S. market close. Got to say, basically, if it impacts financial markets, if it impacts companies, If it's impacting trends and narratives that are out there, we are on it. We also have a lot of fun doing it. Bloomberg Business Week also brings you the analysis behind the headlines through conversations with our expert guests. And we are doing this all live each weekday. And then we bring you the best analysis in our daily podcast. Search for Bloomberg Business Week on YouTube, Apple, Spotify, or anywhere else you listen. Check it out on your way home from work to catch up on the conversations that you miss during the business day.

11:39And on the weekend, check it out for a complete wrap-up of your business week. That's the Bloomberg Business Week Daily Podcast. I'm Carol Masser. And I'm Tim Stenevec. Subscribe today wherever you get your podcasts.

12:13And Amazon is leading the charge after posting its fastest growth in the cloud in about three years, while Apple's forecast for the holidays may be overshadowing some disappointment in China. Joining us now is Dan Ives, Global Head of Tech Research at Wedbush Securities. Dan, good morning. Let's start off with Amazon. We are seeing a big surge in those shares after Amazon Web Services posted a 20 % year-over-year growth number. Is that going to be enough to keep up after what we saw from Azure and Google Cloud this week? Yeah, Nathan, this is a breakout quarter for Amazon. You know, they've been on the outside looking in of the AI revolution.

12:54And these numbers show they're now starting to see massive demand. And look, the New York City cab driver is embarrassing Amazon, right? So I think this is a huge moment for Amazon. And I think you're going to see the Amazon bulls. they'll be enjoying their candy on Halloween. Okay. Well, of course, coming into these earnings, we had the outage at AWS. Does that still pose a concern for Amazon investors? Well, gold standard. The reality is, was that a little black eye moment? Yeah, but it's not moving the need relative to Amazon. Look, I think the key here is that the advertising business looks strong.

13:36The AWS business looks like it's accelerated. And for a company that's really been back against the wall, it's a huge breakout quarter. Now, you know, I mean, 330 is our new price target. But I mean, this is a stock that could really have legs over the next six to nine months. And of course, the shares are trading around 250 pre-market this morning. Is Amazon justifying the spend on AI? It hit a record in the quarter $34.2 billion. Of course, we saw all the blockbuster numbers from some of these other AI players as well. In terms of what Amazon is reporting on its AI spend, is that justified? It's an AI arms race.

14:18They have to spend. I mean, look at Microsoft, look at Google, look at Meta. The reality is this is an AI party. Okay, it started at 9 p.m. It's now 10.30 p.m. Party goes to 4 a.m. No tech company wants to be on the outside looking in. And for Amazon, investors want to see them spend to make sure they monetize this fourth industrial revolution. Is Apple still on the outside looking in for you? There's been a lot of talk heading into their earnings and over the last several quarters about how much catch up Apple needs to do in the AI race. Look, from the AI party, they're looking through the window from the outside, right?

15:02Where everyone else on the dance floor. But for Apple, the reality is iPhone 17 looks strong. That's a huge positive. And I believe this is a drum roll. They're going to partner with Google for a major AI partnership. And from a consumer perspective, that's going to be a huge wrap. I know it could be$75 to$100 per share. that's why for Apple, 2026, I think, is going to be their year. In terms of what we saw in the quarter from Apple, a lot of focus for investors on the outlook after the kind of a slowdown in China. Is China still a concern? China actually looks like it's showing major growth into next quarter because iPhone 17, the air looks very strong.

15:50I mean, I'd call those almost like Otani-like guidance for the December quarter, which is why the stock's going to be up. And I think now you're starting to look at a company's finally getting back its mojo. You have a lot of good news in the horizon. And that's why, look, I think from a large cap perspective, Apple and Amazon are basically saying, don't forget about us. And that was a huge validation of what we saw last night. It was interesting, though, to hear on the call Apple saying that they're facing supply constraints that have kept the iPhone revenue slightly below expectations. What about the possibility of further supply constraints in quarters to come?

16:32Look, they're trying to do a dance around with tariffs, right? I mean, Cook, 10 percent politician, 90 percent CEO. So we start to navigate that in terms of Trump administration. We've seen that, but there are some supply issues. I think a lot of those get rectified going into next quarter and the quarter after. This is a company that's had a lot of growth issues, nowhere in AI, but it feels like now they're starting to really turn around, which I think that's why$4 trillion, I think we're going to be looking at a$5 trillion market cap in the next year. Of course, NVIDIA just hit a$5 trillion market cap just this week.

17:11And Jensen Wong, the CEO, is trying to make a lot of deals at the APEC Summit in South Korea. What do you make of some of the latest announcements, this, for example, billion-dollar investment in Poolside? Look, I love everything the godfather of AI Jensen's doing because they're planting flags around the world. This is – we're still in the second inning of where this is all heading. And it all starts with NVIDIA. They're a foundation to where everything is heading, and they're making the smart moves. That's exactly what they need to do at the right time. And there's one chip in the world fueling the AI revolution, and it's NVIDIA.

17:53And there's still talk, including from Jensen Wang himself, that he'd like to be able to sell Blackwell chips into China. Do you see that as a possibility that that could be coming? Oh, yeah. I think that's going to be the biggest chip in the poker table when it comes to Trump. Making sure NVIDIA could sell back into China, that's significant. Look, they're not going to go from 95 % market share to zero. And China big tech wants NVIDIA chips. That continues to be the gold standard in terms of where it's all heading. Our last 30 seconds, Dan. And overall, from what we've seen from the MAG7 so far, we've got Apple and Amazon on the rise this morning.

18:36Of course, Microsoft and Meta fell after their earnings. How do you see how these companies have shaken out so far? They met the hype. And even with Meta selling off, they're selling off because they're spending more on CapEx, which is ultimately bullish for the AI revolution. Look, the reality is that this is a tech bull market. And the bears in hibernation mode can't see AI in the spreadsheets. But the reality is this is a market going much higher, led by big tech. And I think that's really the headline that we see from earnings. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

19:16Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York. Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast-to-coast on the Bloomberg Business app, now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long.

19:54I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

20:12I'm Barry Ritholtz, inviting you to join me for the Masters in Business podcast. Every week, we bring you fascinating conversations with the people who shape markets, investing and business. CEOs, fund managers, billionaires, Nobel laureates, traders, analysts, economists, everybody that affects what's going on in the market, whether you own stocks, bonds, real estate, commodities, crypto, you really need to hear these conversations. Sometimes it's behaviorists like Dick Thaler or Bob Schiller. Sometimes it's fund managers like Peter Lynch, Bill Miller, Ray Dalio. Sometimes it's authors, Michael Lewis, author of The Big Short, and Moneyball.

20:57Regardless of the conversation, these are the folks that move markets each week. That's the Masters in Business podcast with me, Barry Ritholtz. Listen on Apple, Spotify, or wherever you get your podcasts.