AMD Soars on Blockbuster AI-Fueled Forecast

25:30Bloomberg's Brody Ford. The impact of AI, we appreciate it. Thank you. Sticking with AI costs, OpenAI expects to spend$50 billion on computing power just this year. That's according to the company's president, Greg Brockman, testifying in OpenAI's courtroom battle against Elon Musk. Brockman also said he and other co-founders were concerned that Musk lacked the patience and AI understanding to run the chat GPT maker. The trial continues today. Coming up, Disney's bottom line. Well, it gets a boost from some hit sequels. It's got some more to come as well. We're also talking about the streaming turnaround.

26:05Resilient spending in the parks. There's a new CEO. And it was pretty good news to him as the stock reacts up 7%, the best day for Disney in a year at least. Let's talk about Nasdaq 100 up 1.5%. The stocks, again, chip stocks are on fire. We see NVIDIA inking deals with Corning to ensure that there's AI infrastructure supply. and AMD really impresses on its earnings. This is Bloomberg Tech.

26:36Welcome back to Bloomberg Tech. We have got tech stocks in demand. There's geopolitics at play. There's hope that there is some de-escalation between US and Iran and that plays into the markets. But so too do earnings. I'm looking at the Nasdaq up 1.6%. We're at a record high again for the tech heavy benchmark. And we think about what's leading the pack in terms of points. It's a lot to do with earnings. I dig into one of them. Disney currently having its best day in a year. New CEO, Josh DeMuro, able to deliver strong results. In particular, look, we're up 6 % on the name. We're just rolling over from our previous peak.

27:09But this is all about a company that's getting more optimization, more monetization from streaming in particular. And look, Bloomberg Intelligence is pointing to the strengthening growth outlook and more consistent earnings trajectory more broadly. As the company brushes off park concerns with higher earnings per share guidance too. Keith Raganathan from Lumet Intelligence joins us now. And look, can you talk about perhaps the anxiety going into this about the consumer? And they show resilience. Is it the box office? Is it the parks? What's working? Everything seems to be working right now, Caroline.

27:39And of course, coming into this quarter, there was a lot of concerns about whether Disney would in fact lower their guidance for the full year. And they did exactly the opposite, which is why we're kind of seeing the shares really react with so much more confidence today. So, you know, on the theme parks, which is 60 percent of total company profit, we were expecting a very, very modest profit increase for the fiscal second quarter. They actually outperformed with five percent increase in profit. And, you know, they attribute that to pretty strong per capita spending, even though visitation was a little challenged.

28:14So international visitation to their domestic parks has been hurt by, you know, a stronger dollar and some of the geopolitical tensions. But despite that, they kind of delivered. And really, I think the upbeat commentary for the fiscal third quarter where they talked about, you know, a pickup in demand and some of those attendance headwinds kind of fading away really lends credence to their very optimistic outlook for fiscal 2026 and even fiscal 2027. It's all about what we're discussing at the top of the show, the flywheel effect of the IP and how attractive it is. That plays into the streaming, into the content.

28:49Just listen to Josh DiMaro on the call yesterday, what he had to say. We centralize television programming within Disney Entertainment DTC. So we're programming for Disney Plus and Hulu while being smart about windowing content to linear so that we can expand reach and maximize monetization. and we also integrated our games business into Disney Entertainment. And this creates new opportunities to cross-promote franchises and use games to extend storytelling and ultimately develop new IP. That, of course, was this morning, not last night. My days are all lost, Geetha, when we're in earnings. I'm interested as to what Josh did to convince about perhaps his big epic games bet, the Fortnite bet that people have been worried about to start of his reign.

29:33Yeah, so it's really, you know, as part of that whole content strategy, Yes, you're right to point out video games. And they're basically trying to create, you know, this one-stop shop, really using Disney Plus as kind of the hub for so many more products. Because, you know, at the end of the day, Disney has such a fantastic product portfolio with, of course, streaming. But then you have movies and you have theme parks and you have merchandise and you have video games. And it's really, you know, Josh DeMauro kind of setting the stage for achieving that whole next phase of growth by leaning more heavily into that Disney Plus experience, right?

30:08With video games, you have access to a whole new audience, a much younger audience, you know, whom you can sell into. And that's exactly what he's planning to do. But it's really about reinvigorating the content engine as a whole. And I think he did a pretty good job of convincing investors that he knows exactly what he's doing and he has a plan in place. We're all excited for Devil Wears Prada, too, if you haven't already seen it. But you took us to another place where content is coming. Warner Brothers Discovery got their earnings after the bell. Yeah. So for Warner Brothers, it's just such a completely different story.

30:41I mean, I think, you know, fundamentals, their earnings, that's a little bit of a sideshow here. It's all about M &A. We do know that one of the numbers that we're going to be looking for, as the street will be, is TV advertising revenue and advertising revenue in general. We do expect a pretty dismal quarter, if you can call it that, for TV advertising, just because Warner Brothers Discovery lost its rights to the NBA. And so that is definitely going to have a huge impact. But other than that, any color that they can offer, just generally from an M &A perspective, although I doubt they will do that.

31:17It's a busy time of year for you too, Keith Ranganath, and we so appreciate you of Bloomberg Intelligence. Let's stick with those earnings. We're getting back to MD. Why? Because it's the biggest points contributor on the NASDAQ 100 that's at a record high. Its shares are a record high. We're up 17%. Bloomberg's Ryan Flostellica has been writing about, well, some of the competitive threats that are coming in Vidya's way. Let's go in on AMD because this isn't actually just a GPU story. This is CPU story. This is about a total addressable market that doubles. Yeah, good morning. Thanks for having me.

31:48So what I would start with is that AMD coming into this report was coming off its biggest one month gain since the dot-com era. So expectations were really elevated for this report. And even with that, it really just blew everyone away. Very strong results, very strong forecast, at least a couple of upgrades I saw, including from Goldman this morning. People were very impressed by their ability to draw like really impressive growth and really sort of establish themselves as a major player within AI. Some of the price target changes were actually eye-watering. I think some of them, Bernstein, were doubling their price target on AMD.

32:25So, big moves, Ryan. What about NVIDIA playing a bit of a catch-up today? Because you've been writing a lot about how maybe it's been beaten up when the rest of the market in the Sox, at least, have gone up and to the right. We've been worrying about competition. Yeah, what's really interesting is if you look at the Sox, it's up, I think, about 60 % since late March. However, NVIDIA, the biggest company really in the world, certainly the biggest a semiconductor company, really hasn't been participating in that rally to the same degree. And it does seem like there is a growing appreciation that a couple of years ago, it basically had a monopoly on AI chips.

32:58Now we are seeing more and more people come into this market, including some of NVIDIA's biggest customers. So Alphabet last week talked about how it's going to start selling its TPU chips to other clouds. Those are specifically designed for AI applications, so there's a lot of demand for them. People even view them as superior to NVIDIA products in certain use cases. Amazon has its own chip. Meta is developing its own chip. Microsoft is. These are all of NVIDIA's biggest customers. So while it is dealing with competition from the likes of AMD, Intel, Qualcomm, all these sort of traditional chip makers, it is also seeing more aggressive moves into the space from its biggest customers.

33:38Like I said, Alphabet probably being the most notable one, certainly people are starting to wonder, what does this mean for NVIDIA's growth, margins, pricing power, market share, all of that, if we start to see some of its biggest customers looking to reduce their reliance on NVIDIA? Bloomberg's round for Celica. We thank you very much for the roundup on chips. And let's stick with chips. The semiconductor market is on track to hit$1 trillion. But global tensions, rising demand are forcing the chip supply chain to adapt. That's the focus of this week's episode of Bloomberg Primer. Take a look.

34:10AI is booming. AI chips accounted for more than one quarter of all chips sold in 2025. That figure is expected to reach more than half by 2029. Chip demand is no longer dictated by which new iPhone or PC will have customers lining up. What has changed over the years in the semiconductor industry is since we're seeing such a surge in the need to build data centers for AI deployment and applications, We're seeing a more sustained growth period in semiconductors as opposed to the old-fashioned cyclical when we used to have Intel come out with chips that everybody had to upgrade their computer for.

34:49Spending on AI infrastructure, like data centers, is projected to soon cross the$1 trillion mark. So the demand for these chips is there. There's just one maybe not so nanoscopic problem. How concentrated is too concentrated for this supply chain? hear more from the team at bloomberg originals on today's episode of primer that's tonight bloomberg 6 p.m et or on bloomberg originals at 8 p.m new york time now sticking with chips let's take a look at today's big number 55 billion dollars that is how much spacex is estimating elon musk's terafab chip factory will cost to build along with tesla it's according to a public notice which shows the estimated total capital investment could actually rise to 119 billion if additional phases of the project are completed.

35:39Coming up, Apple is going to let users choose their own AI models across iOS 27. More on that next. This is Bloomberg Tech.

35:52So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs.

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37:17Do that. Do that. Do that with Acrobat. Learn more at adobe.com slash do that with Acrobat. and it's trying to turn its devices into a comprehensive AI platform. With the iOS 27 this fall, users will be able to choose from multiple outside AI models, like Google's Gemini or Anthropoc's Claude. Bloomberg Mark Gurman is here with us. And Mark, is it trying to be agnostic here in some way? In some way, it's trying to be agnostic. But what it's really trying to do is understand where it's at in artificial intelligence. And if you look at Siri, you look at the Apple intelligence capabilities, They're nowhere up to par, what you're seeing on Android, what you're seeing from competing devices, what you're seeing from ChatGPT, Claude, you name it.

38:03So they recognize that. So the name of the game is making the default offerings, right, Siri, Apple Intelligence, competent and good enough, right? In the same way that the built-in apps on an iPhone are competent and good enough. But then you have an app store where you can outfit your iPhone with a bunch of apps that many people consider superior. But you're still using an iPhone and you're still driving services revenue to Apple and obviously the hardware revenue because you're buying their products. And so in the same way, they want to make the AI stuff good enough, but also offer customers the ability to put their own choice of AI models on top of features or to power certain features.

38:41So you're still using an iPhone and maybe you're even making them more money by subscribing to different AI services like ChatGPT or Gemini on their platform, which they'll get a cut of through the App Store. So at the moment, Mark, you can interact with ChatGPT. That sort of got the first in with Apple across some of its functionality. But when it comes to Siri, we understand that it's Alphabet's technology that they're sort of turning towards. Where are we going to see and feel it differently? So there's a couple of things going on here, right? So Apple Intelligence, when it first launched in 2024, Siri, that was based on Apple models.

39:14But there was what's called an extension to be able to tap into ChatGPT. Now Apple's rebuilding Siri, so it's in-house Siri, using Google Gemini models. But that doesn't have Google Gemini functionality. It's basically like they hired the engineers from Google to fix Siri because, you know, obviously they're doing a better job building their models. But now, in addition to ChatGPT, you'll be able to tap into outside AI services, Gemini being one, Claude being another. And we'll see if they end up allowing Meta, Alexa, and you name it. In terms of when this is all coming, so they'll introduce these new features, as well as the revamped Siri, in June on the 8th at WWDC.

39:55And they'll roll it out in September. And I think if it rolls out any later than that, another disaster on their hands. But I think this is going to happen this time. Is this going to be enough? Is this Apple being, in the longer term, making the decision that they are just going to outsource this? Well, let's start with the short term. In the short term, if you're a customer, you really can't ask for more other than to have access and have optionality to have anything, right? As Gemini improves, as Cloud improves, ChatGPT improves, you're going to get the best stuff on an iPhone. So from a customer standpoint, that's great.

40:31From a long-term standpoint, I still think that Apple needs to get improved models. They need to be on the frontier of things when it comes to AI because they have all sorts of hardware plans in the future. And if you're a hardware company like Apple, you don't want to be reliant on third parties to power the underlying AI powering those products. So in the short term, they're going to be great. In the long term, they need to get things moving in a far better, more competitive direction. And we're likely, therefore, to see more of these announcements coming. And you, as always, set us up for what to anticipate with Apple.

41:06Bloomberg's Mark Gurman in San Francisco on all things Apple and integration of AI. I'm pleased to say now, though, we can get back out to the Milken Conference in California, where Bloomberg's Joe Matthew and Carol Massa are sitting down with Kathy Wood of ARK. Let's listen in. All right, Paul and Scarlett, thank you so much. We welcome everybody on Bloomberg Radio, Bloomberg TV, across Bloomberg platforms. Yes, indeed, Carol Massa, Joe Matthew here at the Milken Institute Global Conference. We have a special guest, and I feel like reading in this morning, the headlines were made. It's like they knew Kathy was going to join us.

41:35Kathy Wood, CEO, CIO, and, of course, the founder of ARK Invest. It's so nice to talk with you again. Thanks a lot. Delighted to be here. You gave me my big break in 2015. I'll never forget that. Well, it's so funny because I want to talk Elon because you kind of put him for me on the radar. And I just feel like it was a time when so many people questioned what he was up to. Now everybody is so excited about the SpaceX IPO. We see increasingly how he's kind of melding his universe together. Tell us about kind of that bet. And even today we have that he's building a chip factory, at least$55 billion in investment, maybe as much as almost$120.

42:14And he's doing this chip factory, SpaceX with Tesla. How are you looking at Elon right now and what his next era is? So this is why I founded ARK Invest. We knew that the seeds that were planted in the 20 years that ended in the bubble, they'd been germinating for 20, 25 years. And now they're flourishing. And what we're seeing is 15 different technologies evolving, and they're all converging. And Elon, about six months ago, and we've been using the word convergence for a long time, he said, you know what? I think my companies are converging more than even I understood. And so we're seeing, of course, SpaceX, XAI, rumors about Tesla.

42:58And really, he believes that in the new world or to create the new world, a company has to be vertically integrated. And so that's what's happening here. He is moving into incredible vertical integration as he as he moves data centers into space. Is it all about our Bloomberg intelligence? George Ferguson covers space, covers defense. But he said it's all about Elon controlling the supply chain, Kathy. But I do feel like globally we're seeing countries, companies really thinking about their supply chain. Is that part of his strategy? Absolutely. Absolutely. And also when a company is breaking new ground, literally in this case, and really inventing something, the supply chain doesn't exist very often or not all parts of it exist.

43:51And I think also, as he's discussing where he's going and how he's going to do it, he is getting the supply chain ready. He always sets the time frame much sooner than most people expect. But it's to get his employees and the supply chain focused. Because when he moves, he moves fast. You've really helped to define people's perception of Elon Musk and the company Tesla largely as one that is not about making cars, but one that's about autonomy and robotics. When you walk out the Hilton here, different than where I live in Washington, D.C., driverless Waymos are picking people up and driving away with them all day long.

44:36The mainstreaming of autonomous vehicles is just about here. I'd like to know if you see that actually fulfilling itself in the next year and if this is a zero-sum game or you're going to have Uber, Waymo, Tesla all involved. Okay, this is where vertical integration comes back into the conversation. In the robo-taxi world, Tesla is vertically integrated and has created the platform upon which others will build their companies. So I credit our team. So Tasha, Daniel, Brett Winton, we have been focused on this from day one, 2014, when I founded ARK. And yes, slowly, slowly, then all at once. So vertical integration for Tesla means it will have the lowest cost structure by far.

45:30Now, it's going to use Uber's umbrella here,$3 plus per mile. But if our analysis is correct, those costs as robotaxis scale are going to drop to$0.25 per mile. Think about it. The cost of transportation is going to collapse here. And no one, Waymo's cost structure, according to our estimates, in 2030 will be 50 % higher than Tesla's because they're dependent on other auto manufacturers and others in the supply chain that Tesla is not. How are you thinking about the SpaceX IPO, Kathy? Do you anticipate there's so much enthusiasm going into it? Massive size, massive interest. But do you think there'll be a drop off initially after, you know, once it makes its public debut and then ultimately kind of play out like Tesla did that eventually it goes up again?

46:27Like, how do you see the trajectory? Right. So this is only at least what we know so far,$75 billion. There is so much demand out there. We have in our venture fund, so ARKVX, SpaceX is the largest position. And because we're direct to consumer when it comes to venture, although the fund has scaled north of$850 million, investors had to look for us. And how did they find us? They were looking for SpaceX. So the demand is voracious out there. Only$75 billion. Yes, it's a big IPO. But just think about how SpaceX has reawakened the dream of space exploration. This has captured the imagination not just of investors, but really everyone.

47:20So does that mean you don't think it'll fly? You think the enthusiasm will continue? Or do you think there will be some settling in afterwards? I think there'll be supply-demand imbalance in the beginning. You'll see that pop. It will be volatile, I would imagine. But we hope to serve in terms of providing our research. We've already got a SpaceX model out there on our site, arc-invest.com. We have not added data centers, orbital data centers in. However, our preliminary work suggests that that part of the business could take, relative to our existing model, could take Tesla from a revenue generation point of view, orders of magnitude higher, 10, 20 times higher.

48:05I'm so glad you went there. Data centers in space, and I mentioned before we got going, it came up on a real estate panel where so many of the real estate investors, even like related companies, have switched their focus to data centers. But we brought up data centers in space. What does that mean, though, then, for all of the data center build-out and money that is happening here on Earth? Does that mean a lot of that goes away? There's a little bit of a bubble. How do we reconcile that? We think, and this is the important judgment call, is this hype? Is this 1999? I can tell you unequivocally, it is not.

48:40As I mentioned, the seeds were planted then. Now we're ready. And we think this technology revolution is going to dwarf the industrial revolution by far. So I think that we'll need the orbital data centers. And of course, Elon is informed by his experience in Memphis, Tennessee, and now Mississippi. Memphis became not in my backyard. You're increasing my electricity prices and you're ruining our land. So he's basically saying, I'm not going to have to worry about not in my backyard in space. But does it make a bubble of the stuff on there? I don't think so. I don't think so. We think we're going, we need all of this.

49:26Yep. Sorry, I know I'm dominating. I didn't mean to. I mean, you guys should walk away with this. Go, go, go. I wanted to ask you about something that took place today. You woke up and saw your third largest holding just go through the roof in AMD, another blow-the-doors-off quarter. And it's really creating this question now about whether we should be paying a lot more attention. The market is to CPUs after GPUs went crazy. We're looking at people take money out of NVIDIA now and chase stocks like AMD. Do we need both or is that where you're looking? We think we need both. I do think there is more competition.

50:01We want it. We need it. But it was interesting. Sarah Fryer at OpenAI, I'm going to give her a shout out because I heard her speak and she was saying, you know, people are chasing GPUs. They're going to be really shocked at how agentic AI activates CPUs and inference generally activates CPUs. Yesterday, Lisa Su provided a stat we had never heard before. Right now, for every CPU, there are four to five GPUs when it comes to enabling AI. Lisa thinks it's going to go one-to-one in the future. I think that has been the sleeper. And you see, Intel has taken off. In fact, we're seeing a lot of stocks that were, you know, they were very big in the bubble.

50:54And I just said to our team today, I said, what's going on? We're going back to the future. You know, Intel resurrecting. Isn't that right? Yes, and Flextronics. It's now called Flex. Boom. So I think we need it all. Not to mention data storage, which has been one of the most remarkable examples of a shortage creating a monster rally. So you need these old-fashioned chips to get to this new fashion AI. All hands on deck. We want to ask you about a story that came out. Google, Microsoft to give U.S. agency early access to AI models. So basically the White House vetting AI models, is this good or bad?

51:31And knowing this administration and David Sachs, our AIs are, I don't think we're talking about heavy regulation here. We might be talking more about national security. National security, we heard this with Mythos, you know, software that, you know, has been in place for 60 years and never been penetrated. AI can find these vulnerabilities. So they're probably trying to tighten up a lot of what we do out there and make sure that our industries are safe. Doesn't that bring a political implication though to what may or may not be available to people if the White House is choosing which platform we ought to use?

52:14No, you know what's interesting? And this is taking a leaf from OpenAI in its early days. ChatGPT are saying, we don't think we can release this. This is too powerful. It's great marketing. It's true that it's very powerful, but it's also great marketing. A lot of the people at Anthropic came from open AI. So while they're blazing trails, no question about it, and they're leapfrogging one another, which is great. Competition is great for us here, including competition from China. I think that we're on our way. I want to ask you about stablecoins, Tether, and their potential. Do you think it has a chance to become big in the U.S.

53:00under the Genius Act? And you've also invested in Circle. Are you looking at other stablecoin-related players beyond that? CryptoBuild, tell me. There's a lot going on right now. There is a lot going on. There's a big meeting at Mar-a-Lago. Like, I know a lot of crypto folks. Like, tell us. Well, and, you know, in the last election, I do think the crypto community was part of the swing factor because they knew deregulation would take place under this administration. That's absolutely true. So, yes, we're seeing the deregulation. You know, this is creating a new financial world order. Many people think the dollar should be going down because of our deficit and debt and all of that.

53:45And what we're seeing here in the United States is deregulation, tax cuts, and a very business-friendly, very business-friendly administration. We think the return on invested capital is going to go up in the U.S. generally. And we think that the crypto revolution, we were at risk of losing it. Yeah. And yes, we do think USAT has a shot. You do? Yes. All right. I'm not going to have a million more questions. I'm going to always do an hour. Kathy, thank you so much. Really appreciate it. Great to see you. Thank you. Thank you so much. Really appreciate it. Kathy Wood, of course, she's the CEO, CIO, and of course, founder of ARK Invest.

54:26Someone like us, it was 10 years ago that we first started talking about Elon Musk. So really tremendous to catch up with her again. And I feel like we didn't even talk about Alphabet, which I know was a great call for you before earnings. Before earnings? Yeah. If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions.

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