Daybreak Weekend: Nvidia Earnings, UK Special Election, Modi Israel Visit

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1:10Bloomberg Audio Studios. Podcasts. Radio. News. This is Bloomberg Daybreak Weekend, our global look at the top stories in the coming week from our Daybreak anchors all around the world. Straight ahead on the program, we look ahead to the last of the MAG-7 earnings with chip giant NVIDIA reporting. I'm Nathan Hager in Washington. I'm Caroline Hepco in London, where we're delving into the special election that could redefine the UK's political future. I'm Doug Krizner, looking ahead to Indian Prime Minister Narendra Modi's visit to Israel in the coming week. That's all straight ahead on Bloomberg Daybreak Weekend.

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2:09Good day to you. I'm Nathan Hager. We begin today's program with earnings from AI chip giant NVIDIA. The last of the magnificent seven reports its end-of-year results after the close of trading on Wednesday. For more, we're joined by Kunjan Sabhani, Senior Semiconductor Analyst for Bloomberg Intelligence. Great to have you with us on the program, Kunjan. Of course, NVIDIA has been at the center of the AI spending story for so long. So where do you see the bar when it comes to NVIDIA's results this time around? As usual, the expectations will run high. You know, folks are expecting the usual or if not better than the mid-single-digit beat and raise that we have gotten used to with them, which I think is quite possible given multiple drivers that have gotten better since their last quarterly earnings.

3:01You know, we have heard from the largest customers of NVIDIA and most of them have increased their CapEx projections significantly. some of them 40 to 50 % in case of Google and Amazon for 2026. So that really helps. We have heard of deals being made since last quarter with these hyperscalers and other customers adopting millions of units of NVIDIA, which should drive further upside to that 500 billion number that Jensen had provided last is end of last year. regarding the Blackwell and Rubin backlog through 2026. So estimates are running higher than that and we expect them to give indications that it is going to run higher than that.

3:47And finally, the third key point will be visibility on resuming the H2, or I should say, starting the H200 shipments to China because that continues, will be a key upside driver if that happens soon. And we did see AMD start to ship some of its prior generation chipments to China in this quarter when there is a reported results. Let's take some of those points in turn, Kunjan. You mentioned the millions of units deployed. I think that was an allusion to the announcement we heard just a few days ago from Meta Platforms. Does that sort of raise the bar when it comes to the outlook that we're expecting to hear from Jensen in the call this week?

4:30It does raise the bar for the full year. I don't know if it raises the bar for the next quarter outlook. That deal with Meta, you know, it's a long term deal and the lead times will be longer than to get the revenue in this quarter. So it does raise the bar for the full year. And when it comes to the pipeline for future chips, we heard Jensen talk about the Rubin Semiconductor being on track for the second half of this year at the recent conference that NVIDIA held. Are we expecting any more clarity when it comes to some of those next generation chips from NVIDIA? I'm sure we will hear some commentary that evaluations are going well, etc.

5:15Remember, this was a very unique time. Usually at CES, NVIDIA in the past has not talked about their next generation products, which are released at the end of the year. Usually they save that for the GTC, which will be their marquee event happening in March. Them talking about this this early in the year gave investors confidence that there would be sort of no hiccups with the Rubin ramp as there were with Blackwell. So that's a good news. We'll definitely hear some update. But I think most of the big news will be saved for him to talk about at GTC next month. And when it comes to the reentry of the H200 chip that you mentioned in China, we've heard Jensit in the past talk about, you know, even keeping China revenue off the table.

6:01They're still going to put out pretty significant numbers. How important is it, though, for NVIDIA to get back into the Chinese market to keep its momentum going? I think it is definitely important. Look, most of the other areas, they are dominating. So investors are very aware. So this is a market which, if it does open up significantly for them, they can go and grab another significant share, a dominant share before the shipment sanctions had come in. NVIDIA was a dominant share of that market. So definitely very important, could easily, you know, if the gates get open, you can easily think about adding somewhere between seven to 12, 13 billion dollars back, which is a substantial amount.

6:43Yes, will not move. I mean, if the company is going to about to be making 150, 200 billion dollars, you can argue five to 12 billion is small, but still a significant upside. And of course, there's been so much discussion within the market about whether there's too much spending in AI, whether it's circular spending and even this AI disruption trade. How do you expect NVIDIA's results to color some of that debate on Wall Street? I don't think I mean, if anything, a better result from India could keep these arguments going forward. I don't think better results will help with diminishing these arguments.

7:25In fact, a weak result could slow down this argument, giving people the more validity that these consents are real. We don't think these concerns are real at this point. And as long as NVIDIA keeps doing better and better, I don't think these arguments will go away anywhere. Appreciate this, Kunjan, ahead of those earnings from NVIDIA. Much appreciated. That is Kunjan Sabhani, Bloomberg Intelligence Senior Semiconductor Analyst. Let's take a look now at some stocks making news in the week ahead. I'm Nathan Hager, joined by Bloomberg Markets Live Managing Editor Christine Aquino. Now, I thought we were almost done with earnings, Christine, but it looks like we got some pretty big names reporting this week, including Home Depot on Tuesday.

8:05Was the holiday quarter a time people were thinking about home improvement? Oh, well, Nathan, I think from what we've heard from Home Depot, things are not looking great. They have implemented a lot of cost-causing, cutting measures over the last couple of months. So this month, for example, the company said it's making the requirements for bonus payouts to managers more strict. They're telling eligible employees that they now have a higher threshold for sales performance metrics to be able to receive this bonus. And then in January, they also said that they're going to be cutting jobs across several teams and also requiring corporate staff to return to the office.

8:42And so it really seems like Home Depot is really bracing for a challenging quarter. That's probably going to be reflected in the earnings results that we're going to be seeing. And so it's just a question of whether, you know, once investors see them, are they going to see enough of a silver lining in those results? You know, whether it's the cost-cutting measures that Home Depot implemented or anything else that they're doing that would give them a steadier footing moving forward. That's probably going to be what's in focus for investors next week. It is interesting, though. I mean, we're still off the high from September for Home Depot, but the stock's been kind of on a bit of a bounce here over the last couple of months.

9:19So does that mean the bar is kind of higher for Home Depot when it comes to the earnings? Yeah, I suppose you could say that just because, you know, it has weathered a lot of storms over the last few months. They have been warning for quite some time now about a slowdown in housing, which is very much affecting their bottom line. But at the same time, we have seen, as you mentioned, a resilience in the shares. And so perhaps there is some of that optimism baked in already that the company will be able to keep afloat. It's earnings outlook. It's revenue outlook. And so, you know, if there is some disappointment there, we'll probably see that in the aftermath of the reaction to the earnings coming.

10:03Moving from Home Depot, another stock that starts with H reports on Tuesday. HP, where are they when it comes to the AI tech story? Yeah, I mean, very interesting when it comes to HP. Of course, it did get a bit of a boost when it comes to the AI story, right? It was very much involved in that trade back in the latter part of 2025, when it was all about the expansion of the AI trade to the various companies involved in implementing the data center build out. And HP is a part of that supply chain. But, you know, our analysts at Bloomberg Intelligence really focusing in on margins for HP here. They are big in the PC space, a lot of pressure there when it comes to margins.

10:50And so that's a big question, whether they're going to be able to keep that up. Also a question about, you know, their memory supply. Is that supply chain, again, going to be resilient and moving forward? And, you know, it's a big question whether they're going to be able to maintain pricing power, given that the environment at the moment for anything AR related is a little bit more challenging as we've seen in recent price action. Is that what we're seeing reflected in terms of the kind of steady decline that we've been seeing in HP's chart over the last few months? Yeah, absolutely, Nathan. I mean, I think it is one of these stocks.

11:30Very interesting. It's just kind of right in the middle of kind of institutional air demand, right, given that it is part of the build-out story. But then at the same time, a lot of fluctuations due to its spot when it comes to the consumer space, right? Like its PC offerings still very much subject to the whims of the consumer. And as we've been hearing from a lot of other companies, that is quite a challenging environment. It's not that consumers are fully scaling back on their purchases. They're just being more strategic about it. And that may be where HP's vulnerabilities really may be exposed.

12:08And on Thursday, we hear from one of HP's competitors. Is it going to be a similar story when it comes to Dell, Computer? Yeah, I mean, for Dell, it really has been a rough start to 2026, right? We've seen their shares down more than 7%. And they very much did get wrapped up in the early 2026 declines for U.S. equities in general, given all these fears about AI disruption. And, you know, for Blooming Intelligence, their outlook really focusing in on the AI server demand that Dell is enjoying. And so that is a positive for them. And that's allowed them to have a more broad consumer base. and our analysts are very much optimistic in terms of their ability to sustain that momentum through 2030.

12:55So high expectations potentially for this earnings result, possibly a high potential for disappointment as well. Okay, well, another busy earnings week on tap. Thanks for this, Christine. Good having you with us. That's Christine Aquino, Managing Editor for Bloomberg Markets Live. Coming up on Bloomberg Daybreak Weekend, we'll look at the special election that could redefine the UK's political future. I'm Nathan Hager, and this is Bloomberg.

13:31Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made. And I'm Caroline Hepker in London. We're 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.

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14:32This is Bloomberg Daybreak Weekend, our global look ahead at the top stories for investors in the coming week. I'm Nathan Hager in Washington. Up later in our program, we'll look ahead to Indian Prime Minister Narendra Modi's visit to Israel. But first, in the coming days, a special election in the UK could highlight the fractured state of British politics. Bookmakers are predicting a three-horse race between Labour and the insurgents on the right and left. Gambling odds compiled by OddsChecker suggest the Green Party will edge out reform, with the incumbent Labour Party third. For more, let's go to London and bring in Bloomberg Daybreak Europe anchor Caroline Hepger.

15:07Nathan, in an unassuming and often neglected Manchester suburb, a three-way fight is hotting up between Challenger Party's Reform UK and the Green Party, who are vying to pry the area's parliamentary seat away from the incumbent governing Labour Party. With a special by-election looming in Gorton and Denton on the 26th of February, the battle is highlighting the sinking popularity of Prime Minister Keir Starmer's Labour administration and the rising fortunes of populist competitors on both the right and the left. It's an uncertain situation that could have implications for the UK's politics and economic prospects.

15:49Sri Gocukovindan is senior research economist at UK asset manager Aberdeen. She says the instability could prove costly. What we're seeing, I mean, it's been a good week for bond markets in the UK and elsewhere. But there is a lot of premium already in the gilt market. But I have to say a lot of rates investors are cautious. And I think these key events like the by-election in 10 days time, the local elections in May, there is the acceptance that there is likely to be a leadership change later this year. So obviously we had a bit of a flashpoint two weeks ago and guilt's really sold off quite aggressively.

16:29And that is an issue for the government. High interest rates are an issue for the government. So whoever leads the UK later this year will have to keep that in mind. So perhaps a challenge to the Prime Minister Keir Starmer, Sri Kuchugovindan, Senior Research Economist at UK Asset Manager Aberdeen speak to me and Stephen Carroll on Bloomberg Radio. So will the coming local contest between the government and all its challenges leave Starmer vulnerable or vindicated? Joining me now to discuss is our Bloomberg UK economy reporter Irina Angel and our UK politics reporter Lucy White. Welcome to both of you.

17:08Thank you for being with us. Lucy, should we start with a bit of the politics? Set the scene. Why is this by-election so crucial for Keir Starmer? So there's not very often in between general elections that we get a sort of national vote like this because this isn't your kind of usual local politics kind of election. This is a by-election for a seat in Westminster. So it's the first real test that we're going to have for an area where they are electing a new person to Westminster. and this is all because Andrew Gwynn has resigned on health grounds but he was also caught up in a bit of a scandal he's the Labour incumbent at the moment around leaked whatsapp messages and this is going to be the first real test we have of who these people in Gorton and Denton want as their representative and as you were saying just then you know this there's a real flashpoint at the moment as to obviously there's some kind of idiosyncratic reasons why people are are not a fan of Labour in that area.

18:08But there's also this kind of real challenge, real tussle going on between reform and the Greens at the moment. And if this goes badly for Labour in Manchester, or in this particular suburb of Manchester, where Labour have really had a sort of stronghold for several years, the implications for this nationally are pretty stark. We only have polling at the moment, but how much ground might Labour have lost in this region? Who are the frontrunners? So it's really a three-way tie at the moment. We've got Labour as the incumbents and then we've got the Green Party who are really hoping to make gains on the sort of populist left of politics and Reform who are at the polar opposite end of that sort of making looking to make headway on the populist right and they're you know kind of involved in this three-way battle.

18:58It's hard to tell who is doing particularly well at the moment because there's no sort of you know kind of um there is there is polling at a local level but none of it's you know kind of particularly reliable the sample sizes just aren't as big um from myself and arena when we were on the ground last week in in the area there's a huge amount of visibility for the green party there's posters everywhere there's a lot of campaigners on the ground uh for reform there's very little visibility but and you know kind of local polling does seem to see that see them doing quite well. As for Labour, you know, there's a lot of people who are kind of, well, I've voted Labour all my life, so I probably will.

19:37But there's an equal number, I'd say, that we spoke to, of people that we spoke to there, who say, whether it's due to the Andrew Green WhatsApp scandal, or whether it's due to Keir Starmer, just saying, I will never vote Labour again in my life. Irina, take us through the economics then. We know that for a long time, UK wages and incomes really haven't risen very much. The economy isn't growing very quickly. How has that manifested in Manchester and how do residents there feel about it? When Lucy and I went up there, I would say that the top issue that came up in Gorton and Denton was the rising cost of living.

20:17And, you know, you have that. You also have the rise in the cost of doing business. There's also, you know, other issues related to flight tipping, decaying estates, drug dealing. And, you know, underneath this, you could sense that there is one big issue. And that issue is that the community is decaying, but things didn't used to be like this, you know. So the people of Gorton and Denton, they seem to be people who take pride in where they come from and pride in who they are. And there's a sense that that's now been taken away from them. And who do they blame for this? They blame the government.

20:47You know, Labour came in with big promises. There was real hope that things will change quickly. But they haven't for, you know, many reasons. you know perhaps some of our default of policy others are you know are just the result of like structural factors which you know could never be turned around very quickly and you know MP and local people also blame their previous MP Andrew Gwynn you know some told us they wrote to him to complain but they never heard back so they feel like things are not getting better and also that they're getting neglected. I think that's really interesting so then what do we know about the economic profile of those who perhaps are likely to support the challenger parties, parties like Reform and the Greens.

21:29If you say that underneath it, there's what sounds like quite a lot of anger, maybe some hopelessness. Exactly. And Reform and Green voters are actually very similar in a key way. They feel, and this is at the national level, not just in Gorton and Denton, but it was really interesting to see it sort of play out there. But these people feel somehow cheated on by the sort of by the political economy of the country. So Luke Trill from More in Common put this very well. You know, he told me that, you know, you ask people, is the system working? And the answer tends to be no. Then you ask them, OK, can we change the system from within to make it work or do we just burn it all down?

22:11And the burn it all downers, these are the people who either go to reform or the Greens. You know, which one? It depends on who they blame. For the Greens, it tends to be capitalism and big corporates capturing the economic gains from themselves and leaving everyone else worse off. So you have, you know, young university educated people who are a big demographic for them. And for reform, it's really blaming immigration and migrants putting a strain on public services. I'm sure that Labour are putting up a good fight and trying to make their case for why perhaps they need more time or the progress that they've made so far.

22:48Lucy, in terms of Keir Starmer, how much damage could it do potentially if Labour were to fail to retain this parliamentary seat? I think it will be embarrassing for them. But at the same time, I'm not sure that people within Labour have a huge amount of hope for it going particularly well at the moment. I think, you know, it's important to realise that this is just one area and that, you know, I dare say, if I were to be devil's advocate for Labour, they would say that there are, you know, some very idiosyncratic issues in this area. For example, the WhatsApp scandal that Andrew Grimm was involved in.

23:24But at the same time, you know, it is going to be hugely embarrassing for them if they lose in a seat where as recently as 2024, they won 50.8 % of the vote. And even more, it's kind of hard to compare because the boundaries were slightly different in the general election before that in 2019. But it would have been even higher back then. so I think if Labour are to you know go from that level to totally losing the seat it is a kind of really worrying sign for them because you know if we're to have you know this pattern repeated across the country in areas where Labour isn't was never this this good then you know they're really looking at a kind of potential wipeout at the next election which is due to be held by the next general election which is due to be held by 2029.

24:12So in terms of what's going on with the demographics in the constituency I think that's also quite interesting and there's been quite a lot of focus on that in terms of the economic challenges, worries, complaints or hopes that people have for that. Tell us about the demographics, Irina. So Gorton and Denton has been called the Frankenstein constituency because it's made up of very different parts. You know you have Gorton and crucially this is where two-thirds of the population lives. And Gorton is very ethnically diverse. 40 % of residents identify as Muslim. You know, one of the main places we visited there is the Longside Market, this big open-air market reminiscent of Istanbul bazaars.

24:53And it also has a, Gorton has a large share of students and university graduates and a larger share of these people than Denton. So Gorton is fertile ground, you know, for labor and the Greens. both have their headquarters there. And as Lucy said, you know, we saw lots of green posters, but not that many Labour, I would say, when we visited last week. And then, you know, then there's Denton. And as soon as you cross into Denton, you can almost tell the difference because the houses are bigger somehow. And, you know, Reform has set up its HQ there, and it's in a large sort of sleek warehouse. And, you know, regardless whether you're from Gorton or Denton, I think all voters seem to agree on one thing.

25:34they won't vote Labour again. But not many people have made up their mind about whether they go to the Greens or Reform. So Reform seems to be alienating voters in the ethnically diverse court with its anti-immigration message. And some residents said they won't vote for them because they're racist. However, the Greens similarly are putting off other voters. For example, there was this resident we spoke to who said, you know, I don't like Labour, I will vote for reform, even though I don't agree with their stance on immigration, but I won't vote for the Greens because I don't like their stance on priberty blockers.

26:13So it's really, really up in the air sort of who will win. OK, thank you to both of you for your reporting on the ground and for being with me here today. My thanks to Bloomberg's economics reporter Irina Angel and to our politics reporter Lucy White. Thank you. Now, I want to read out a full list of the candidates, of course, who are running for this by-election in Gorton and Denton.

27:00Sir Oinkalot, the official monster-raving loony party. Hugo Will's Communist League. I'm Caroline Hepke here in London. You can catch us every weekday morning here for Bloomberg Daybreak. You're beginning at 6am in London. That's at 1am on Wall Street. Nathan. Thanks, Caroline. And coming up on Bloomberg Daybreak weekend, India's Prime Minister Narendra Modi is set for a two-day visit to Israel. We'll look at what to expect next. I'm Nathan Hager, and this is Bloomberg.