Chips Tariff Probe, Nvidia's Fast Pass
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Live from San Francisco, this is Bloomberg Technology. Coming up, more tariffs. President Trump initiates trade probes into semiconductors and pharmaceutical imports. Plus, Trump pledges expedited permits for Nvidia and other companies investing in the US. And Astranis has big satellite plans for Taiwan. How the nation could have full bandwidth...

as early as next year. Let's get straight to markets. Our focus today is the chip industry with the administration pressing forward with a plan to impose specific tariffs on semis. Actually, in the last 30 minutes or so, equity markets have pulled back, but there is some outperformance in the Philadelphia Semiconductor Index. The logic that I'm hearing from people is certainty. We kind of now know more about

about what's happening in terms of the specific movers Nvidia continues to be in the headlines right they pledge to produce 500 billion dollars worth of AI infrastructure in the United States within the next four years but there are questions about capital expenditures generally on the hyperscalers Amazon is one of the big movers to the downside particularly on the Nasdaq 100 as a points drag

HPE Enterprise reporting from Bloomberg, citing sources that Elliott's taken a $1.5 billion stake. Later in the program, we'll get full details of that. It's an important story this morning. Let's get back to our top story. The Trump administration has initiated trade probes into semiconductor imports. It's a precursor to broader levies on chips. Bloomberg's Tyler Kendall has the details from the White House. Good morning, Tyler.

Yeah, good morning, Ed. Well, the White House has formally announced its Section 232 investigation, which is widely seen as a precursor for the administration to implement tariffs on the basis of national security concerns. And we learned that the investigation actually started back on April 1st. That means that the Commerce Secretary, Howard Lutnick,

now has 270 days from then, so roughly nine months to release his finding report, which would then spur the tariffs into place. But we know that this White House is really looking at more of an expedited timeline here. Howard Lutnick himself has said that we could see these tariffs ultimately implemented in the next one to two months. We have to keep in mind this investigation really is wide ranging. It includes chips, but it also includes the equipment used to make the chips, as well as those downstream consumer electronics that

contain them. The Commerce Department says that they are looking at legacy chips as well as cutting edge chips that are used in artificial intelligence applications. Now, this White House really has taken more of a stick versus carrot approach when it comes to chip makers. President Trump long criticizing the Chips and Science Act with its subsidies and funding, instead saying that his tariff plan will spur production in the U.S. And actually yesterday from the Oval Office, President Trump saying that a recent NVIDIA manufacturing announcement was a result of his tariffs. But Ed, as you

well know and have mentioned and reported on. President Trump implied that Nvidia was investing $500 billion in the U.S., when rather the announcement was that they are pledging to produce $500 billion worth of goods in the U.S.

Bloomberg's Tyler Kendall at the White House, thank you very much. The president also pledged to make it easier for NVIDIA and other companies that are committed to the United States. Bloomberg's Brody Ford in New York has the details of that. But also, I think we need to recap some of the numbers from the NVIDIA announcement yesterday. Good morning, Brody. Good morning. $500 billion of goods. That is the amount that NVIDIA said that is the kind of upper limit of what it's targeting today.

as it invests more in building in the U.S. It said that it's going to be making chips out of Phoenix with TSMC, making servers out of Texas with Foxconn. And I mean, this is in line with the announcements we've been hearing from companies like Apple or OpenAI or Eli Lilly, that as tariffs are hitting, as Trump is putting on pressure, companies feel this urge, this kind of need to show that, look, we have an ability to produce in America.

and I imagine it helps them a lot with the administration as well. We saw that in Trump's tweet today that, look, if you are being part of what he calls the golden age of America and investing here, we're going to try to help you out. He said they were going to expedite permits

Those are done at the local level. But, of course, if someone at the top of the food chain is telling you as a local government official that, hey, let's get these on the road. I write a lot about data centers and, yes, waiting for utilities, waiting for permits. These things can slow down projects.

Brodie Ford's going to be back later in the hour with that HPE Elliott news as well. Brodie Ford, Bloomberg News. Thank you. What does the tariff news this morning mean for technology investors? And what's the outlook in particular for AI CapEx? JP Morgan Asset Management, global market strategist Stephanie Aliaga joins us now. And I think we start there, right, which is the news and certainty. I look at the Philadelphia Semiconductor Index. It's slightly higher than

versus other benchmarks this morning. Section 232 is an interesting strategy, but maybe the market knows more now than it did say 48 hours ago.

Thank you, Ed. It's been remarkable. At the beginning of this year, we saw a real re-rating of a lot of those leading tech companies and a lot of scrutiny around the AI CapEx cycle. A lot of that was due to concerns around DeepSeek and also the fact that those leading tech companies were over-owned and over-loved, perhaps. But now, in the last couple weeks, what we've seen is markets shift to really begin to appreciate

how these companies are the poster children of globalization. And they are highly exposed to the trade war that is going on right now, all of these different tariff headlines. And you can see these companies are quite actively trying to figure out ways to show that they can reshore some production or expedite some of that processes.

But at the end of the day, not only are the Mag7, let's take, highly globally exposed in their suppliers and their revenue, but they're also cyclically exposed. And you mentioned the CapEx cycle and what the outlook is there. A lot of those assumptions will become under greater scrutiny if we have a slower moving economy. Does the outlook for AI CapEx hold, get cut, or grow based on what's happening?

First, we need to consider just how significant the rates of growth that we saw in CapEx were over the last two years. The hyperscalers grew more than 50% in their CapEx expenditures from 2023 to 2024.

Is that rate of growth sustainable, particularly in an environment where we're looking at a likely cooler economy? A lot of uncertainty. So I think some of that froth comes down. Longer term, there's still a lot of CapEx that needs to be spent on AI, but in this environment of uncertainty, management teams are going to be really focused on defending margins and ways that they can help the bottom line. Indeed.

Okay, defending margin. There's some calculus that the sell side is doing, that the CEOs of all these companies are doing, which is, and bear with me on it, if you onshore your manufacturing or the assembling of your electronics component to America, it's probably more expensive. The cost of doing business is greater by, let's say, 25%.

But you face a choice because if your components come from a market where there is a levy of tariff or tariff of 25%, net-net, you've got a decision to make, right? What's the most cost effective and do you pass it on to the customer? How is that impacting your view of markets right now?

Absolutely. Tariffs do nothing to stimulate demand and immediately what they're going to do is increase costs and it's not as easy to just pass those costs along to your consumers because then that will tighten or shrink the amount of demand that you're facing that you're getting from those consumers as well. So I think that's the overall risk here. You know, supply chain's

They can adjust. They have been over the last many years, but it takes time, it costs a lot of money, and there was a reason why they were so global in nature to begin with. They were optimized that way, and it's a big reason why these tech companies have been able to defend and grow their profit margins on a secular basis over the last many years.

There's a lot of discussion in the media about how financial institutions like the one you work for put more emphasis on geopolitical analysis than fundamental analysis. Perhaps historically that balance has been different.

We had a headline from the European Union about 40 minutes ago that caused markets to pull back, which is the EU doesn't think there's going to be any movement on tariffs and talks are not going very well. Could you just explain to our audience, when you think about the technology sector from an equity markets perspective, how you factor in the politics of this, how one jurisdiction behaves with regards to another?

Absolutely. There's a lot of uncertainty and headline volatility right now in the midst of all of these negotiations. I think on the medium to longer term, the reality is the chip industry, for instance, but also a lot of these other highly sophisticated tech services are very globally integrated. And it is very difficult to immediately decouple

Now we're likely going to see greater efforts around that as we have been over the last few years. So that remains a risk, but I do think it's notable.

of all of the sectors that are at risk or exposed to these tariffs, and there are many of them, that the tech sector was the first one that was really granted these kind of sweeping or broad-based exemptions, at least temporarily. And I think there is an understanding that this is very mission critical for the U.S. in maintaining its tech leadership, and maybe at the end of all of this,

They're perhaps too big to be faced with massive tariffs from the administration's policies. Stephanie Aliaga of J.P. Morgan Asset Management, terrific to have you on the program. Thank you very much. Now, coming up, navigating the tech tariff uncertainty. We're going to go back and have more on the offs and ons of tariffs. Have we stepped back from the brink? Do we know more? That conversation next. This is Bloomberg Technology. Bloomberg.

Possibility surrounds us in digital innovation, evolving markets and disruptive ideas. And while promises can inspire dreams, proof is the catalyst for transformation.

and EY Consulting. Technology unlocks value. It's data that sharpens your competitive edge, and it's our deep sector insights that can navigate a pathway to real outcomes. This is high-value transformation that drives real change and challenges competitors to keep up. With EY Consulting, it's about proof, not promises. The world is built on code. From the apps we use every day to the systems powering industries, developers like you are the architects of tomorrow. But

But let's be real. The road to innovation can get a little tricky. You need the right tools to move fast, but you also need a community to help you go further. That's where Microsoft comes in. Microsoft has the tools to help you move at lightning speed, like GitHub Copilot, VS Code, and a ton of AI resources to keep you on the cutting edge. But here's the best part. You

You can build with confidence, knowing that Microsoft's security and compliance are already taken care of. No more worrying about vulnerabilities or threats while you focus on your craft. And with Azure AI Foundry, you can build your way. The future is yours to build, no strings attached. From ready-to-code tools to full flexibility, it's all in one place. The future's in your hands. So learn more at developer.microsoft.com.ai. ♪

Back to our top story, tariffs coming for the chip sector. With new tariffs reshaping global trade, technology faces rising costs and fresh uncertainty. To help us understand the broader policy implications, joining us now, Karen Kornbluh, Milken Institute Senior Advisor for Emerging Technology, a former principal deputy White House Chief Technology Officer, also ambassador to the OECD under Barack Obama. Let's start with the certainty or uncertainty piece.

Today, as it stands, with the Section 232 probe launched into the semiconductor industry, do we understand what this administration's tariff policy is?

That is the question of the hour. I mean, I think it's quite remarkable, and we should start there, that this sector, which is arguably the critical sector for our economy, for national security, we seem to be making policy on the fly. So what happened? On Friday, Customs put out a list of

and it became clear that electronics, not just semiconductors, were going to be exempt from the reciprocal tariffs. Then over the weekend, the Commerce Secretary, Lutnick, said, well, that's only going to be, that's reprieve is only temporary. Then Stephen Miller, the President's Deputy Chief of Staff, said that they'd be subject to this national security act,

review and the president reiterated that saying that the tariffs were going to be 25 percent plus. So making policy for this incredible sector over the weekend.

And what's so incredible is that this is the sector that is, you know, especially the Mag7, right? They're 10% of GDP. They're a huge proportion of the S&P. And here we are making policy like this. Let me ask you this. It's about communication. You know, you've held office in the White House in the field of technology. You've been an ambassador to the OECD and understand global trade.

The communication from this administration, how is it received, interpreted, understood and acted on by other jurisdictions like the European Union or China, for example?

I mean, you know, to make policy and change it like this is so difficult for other countries to adjust to. You know, they, I mean, we just saw this with Europe today. But I think they've been prepared. That's what's interesting here, is that I think you see

not only some companies like Apple seems to have been planning for a long time for this kind of disrupt, not this level of disruption, but some disruption. China seems to be prepared and not being caught flat-footed. But still, as you know, the global supply chains

involves so much investment, involves so much time, and this kind of disruption is incredibly difficult for them. But then as you're asking about the countries, governments are not that familiar with the inner workings of these sectors. And so they're learning on the fly as well what's important, what's not important, and what the implications of all this are. And for them to do that kind of homework and then respond is incredibly difficult.

What is the end goal of using tariffs as a tool policy for this administration, Karen? Well, at the risk of "sane washing," which is the term that's been used here when people try to interpret some of the Trump administration's policies, it seems like the tariffs are gradually falling into three main buckets. One is about raising revenue, the 10% across-the-board tariffs, which could raise $200 billion or more.

A second one, which is where we see the semiconductors, the semiconductor machinery and the electronics, as well as steel, autos, aluminum falling, maybe timber, is national security. And then there's a third one, which is the overall competitiveness and...

and job creation where we see these reciprocal tariffs that look like they're for negotiating down tariffs overseas. Could I ask you about that third bucket? Because the big headline of the last 24 hours is this commitment from Nvidia

to build $500 billion worth of AI infrastructure. We're talking goods and sales, not a capex commitment in America. And the criticism of the past administration, which you participated in and served in, was that the CHIPS Act on paper was one thing, but unlocking the funding from it and actually getting people moving to onshore didn't really happen. Is Trump now achieving that with a different tool?

Well, I mean, it remains to be seen. You know, there are a bunch of there were announcements made under Trump one. There were announcements of a huge amount of investment. And there was actually quite a lot of investment that was made under under Biden as well. So far, these are these are announcements, the Apple announcement, the NVIDIA announcement, the TSMC announcement. TSMC in the past has made announcements of investments, but then they haven't been able to find

the workers that they need. And what you're going to see now for all of these companies, they may make announcements, but when it comes down to it, their prices are going to go up, there's going to be a delay in their being able to get the equipment, and then there's a worker shortage. So if we want to see any of this come, I think we're going to have to lock down the certainty. We can't be driving prices up, and there needs to be serious workforce training.

Karen, to end, are we stepping back from the brink here or is this just a pause while the administration kind of works out the most effective method?

So the Section 232 investigation, this is the national security investigation that's going to happen for the electronics, they put a deadline on comments for a month from now, and they're going to move really quickly. I think the president has really stuck his neck out. He personally has said that the tariffs are going to be 25% plus, so I think we can expect

to see those. And when you think about that, plus perhaps the fentanyl tariff, or certainly the fentanyl tariffs of 20% from China, I think you're going to still see very high tariffs. I think you're going to see uncertainty. I think you're going to see raising costs. So I hope...

You know, as they're making policy on the fly, they're going to realize how critical this sector is, and they're going to address a bunch of those vulnerabilities in this policy where they can't reach the results they want to reach. Karen Kornbluh, former U.S. ambassador to the OECD, grateful to have you on the program. Thank you. Thank you.

Meta's Mark Zuckerberg took to the witness stand yesterday in an historic antitrust trial in which the FTC alleges Meta's purchase of Instagram and WhatsApp destroyed competition. Joining us now is Shweta Kajuria of Wolf Research, who currently has an outperform rating on Meta with a $640 target price. I'm looking at the stock. We're basically flat in the session. We'll get to the details of this trial later.

But simply, is there or is there not antitrust risk in this name?

I think there is, yes. It would be difficult to say no given that there is an ongoing case which I think that will be stretched for several weeks now. And the bigger question also is if there is a likelihood of a settlement. If the probability of settlement increases, then maybe the overhang is gone. But otherwise, yes, I think there is a real risk. Well, let me ask you this. This isn't data.

But when Mark Zuckerberg appears on day one of the trial, what does that tell you? That it is very, very important for the company and for him personally. And the fact that he has spoken with President Trump multiple times since his inauguration, it tells us a little bit about how important this is for him.

The argument the FTC makes was largely based on email documentary evidence that showed Zuckerberg having concerns prior to the acquisition of Instagram that they would be a threat to Facebook in the domain of photo images.

That's a very interesting argument. Is it a strong one? I don't think so. I think FTC has a weak case on hand for a variety of reasons. First of all, they are saying that Meta is a monopoly. This is a backward-looking case from 2020, and...

Instagram was not that big of a platform with 1 million users at the time. Success was not guaranteed, and they didn't even make revenue. Second, they approved this case over a decade ago already, and they're revisiting the same case. And the third thing is that they are only looking at Snapchat and MeWe. They are not in...

As in the FTC is looking at it. The FTC is. And the competition has evolved meaningfully. So the counter-argument that Meta is giving is that they focus on TikTok and YouTube. Now, forget the context of a trial. If you were analyzing this stock in this marketplace, how do you...

assess the competition from TikTok and YouTube that comes Meta's way? Absolutely. TikTok and YouTube are competitive, and it's more than TikTok and YouTube. It's TikTok, YouTube, Snapchat, Reddit, anywhere that a user is spending their time. And what I think is missed in this case is that the Meta's platform has evolved from connecting friends and family to how people actually spend time for broader entertainment. And

over 50% of the time spent of users today is video, which is competing with all these other platforms. Shweta, many people were confused. Meta is an AI company, isn't it? Yeah, it is. So why is that not taken into account in this case? Absolutely. It's just that the monetization of the platform today is huge.

predominantly ad-based monetization and that's their bread and butter that they're competing on. So we just have 30 seconds but with earnings season around the corner what do you expect Meta to tell us? That they are cautious around the macro, that they are reiterating their capex for full year and they'll probably give a conservative guide for the second quarter without much visibility into what's coming in the back half. Our thanks to Shweta Kajuria of Wolf Research joining us here in the San Francisco studio.

Welcome back to Bloomberg Technology. I'm Ed Ludlow in San Francisco. This is what financial markets look like right now. Earlier in the session, the story was outperformance from semiconductors. The SOX, or Philadelphia Semiconductor Index, it's still there, but it's much more muted. One of the big factors

of the last hour was a headline from the European Union explaining that the EU expects tariffs to remain in place, but the talks between the EU and the United States have made very little progress. Then we think about the individual movers. Still in the headlines is Nvidia, for example,

because of that commitment to build more AI infrastructure 100% in America. Amazon is big moving to the downside in the broad context of things. We have questions about capex around AI. Google also lower as well. I want to get to the big picture here on tech stocks and what's driving this morning session. Let's bring in Ryan Vestelica of Bloomberg News. So what do you see out there? I think, you know, the Mag7 is a bit bifurcated at the moment, but what are the main drivers of this market?

Well, again, as always, the focus is almost entirely on trade policy, on tariffs. You mentioned the headline out of the European Union. There is still so much uncertainty, so much back and forth. People are really having a hard time gaming out what the ultimate tariff rates are going to be, what everything is going to look like, how companies are going to react. There's still so much uncertainty, and that's driving volatility in both directions. We're seeing the same today.

One of the big outperformers is Netflix, up more than 5%. There was a report in the journal, I think, about some of their financial targets long term, some of them eye-watering on market cap target, on what they want to do with the top line. What's the story there?

Yeah, so like you said, Wall Street Journal reported there are 2030 targets expecting to double revenue, triple operating income, have a lot more subscribers, and reach $1 trillion in market cap joining that very elite club. This is a stock that's been performing pretty well this year. They had very strong results in January. They report again on Thursday afternoon ahead of the holiday.

There's a lot of optimism because this is not really a stock that is at risk from tariffs. It's also a stock that is seen as being pretty resilient in the face of an economic contraction or recession. If you're going to cut back on your spending, I think your Netflix subscription is going to be one of the last things you cut because the argument goes that you get a lot of bang for your buck as far as the breadth of their library versus the monthly fee.

Bloomberg's Ryan Blastellica with his finger on the pulse of tech stocks this morning. Thank you very much. OK, time to diversify. That's the words of recent reflections from Gerber Kawasaki. Quote, one of the key themes of this year has been the value of diversification. While U.S. stocks have recently pulled back, many of the diversified strategies we've implemented are proving effective.

providing balance and that's all in the context of course of trade tariffs and technology for more let's bring in ross gerber gerber kawasaki ceo and i find that point interesting because you are someone that i've enjoyed having on the program with a very sort of high conviction thesis on specific technology names in this environment what does diversifying mean for you good morning russ

Well, for us, it's, you know, firstly, just, you know, I'm traditionally just a U.S.-based investor and we get our international exposure through like big cap tech and other consumer companies that are global like Apple. So we've always done substantially better for our clients investing in U.S. companies than foreign companies. But for the first time in like at least five years,

No, it's maybe eight, 10 years I'm investing in Europe and in Asia. And I think there's a lot of opportunities globally. And if you actually look at the global markets, they're all pretty much up except for the United States. So this has been a good way to diversify assets if you want to own stocks. But in general, stocks as an asset, I think, have a much higher risk level for the return that you can earn than it's had in the last five years.

And so investors need to look at diversifying in other areas like gold and Bitcoin from the sense of having alternative assets. Real estate and REITs look interesting to me here, as well as private investments.

Let's talk about Europe and the equity market, if we can. Because I think ASML is a really interesting example, right? It is the sort of darling of Europe, but it is right at the center of what is happening with tariffs and the adjustment of global supply chains. I also asked the team to show SAP because there isn't much big tech out there in Europe. And I kind of have a right to say that having spent most of my life and career in Europe.

And you have Siemens, too. So we looked at SAP and Siemens recently, which are excellent companies. And, you know, the way we're playing it right now, because I'm not really an expert in European securities like U.S. securities, is really just through the indexes, which I think give you exposure because SAP and Siemens, Novo, which is really cheap as well, are really good.

you know, all big components of the European indexes. So that's one way to play it. I own ASML in my fund GK and for clients, and we just trimmed it a little bit because I, I kind of feel like they're just in this crossroads of the trade war because they make the most important machines for chips. But it's also like, we don't want this person to get it. We don't want that,

person to get it. So, you know, ASML has some challenges that are political, but their product is crucial to the development of advanced chips. You know, Bitcoin, you mentioned a moment ago. Is there a kind of Gerber Kawasaki thesis and strategy around Bitcoin, Ross? Well, I've been investing in Bitcoin for over a decade. So for me, Bitcoin is a long term, highly volatile asset that's related to risk.

And so when risk on Bitcoin goes up, when risk off Bitcoin goes down. But we look at it very similar to gold. But gold acts opposite of Bitcoin, you know, with inflation and it's a risk off asset. So we like them kind of paired. In my fund, I own, you know, a much higher percentage of gold now than Bitcoin because I think gold is a better bet today than Bitcoin.

But I think having alternative assets like this in your portfolio makes a lot of sense. And we have it in my ETF GK. And we're the only ETF that actually owns gold and Bitcoin. Ross, I'm going to ask you about Tesla. But first, I just observed that historically, when you've come on the program, we've talked about Tesla because you have been a vocal Tesla shareholder. And when I posted on social media you were coming on, there are many that point out, well, why are you getting him on?

he is too emotional. I'm quoting others, just hear me out. He's too emotional about Tesla. He is anti Elon. There are those that sort of think you're too combative with the sort of retail Tesla shareholder and audience. That's the context. But actually there are some specific questions in that, which is how focused are you on Elon's involvement at Doge and the assumption that you probably want him to stop doing that and focus back on Tesla?

Well, there's a couple of things to unpack there. First of all, I understand why retail investors at Tesla are frustrated with me for voicing my views as a retail Tesla investor and a Cybertruck driver. I find it horrible the fact that people are worried about having their vehicles vandalized, including me, because of Elon.

So I don't know why I'm getting attacked when I'm the one, I'm actually really getting attacked because of Elon's behavior. So I think you'd have to be a blind person not to see that Elon's behavior is highly political and highly damaging to the brand. And all the numbers are showing that. So I'm a shareholder. And if you go back to 2021, that was a year ago.

That was the high of Tesla, around $400 until that brief rally during the election. So nobody's made any money in Tesla for a long time. Tesla stock is down 40% this year. The performance is, I think, directly related to the CEO, A, not working at the company, and B, his outside activities, I guess you could call it.

I don't like Elon's personal, the way he does things. That's true. And I don't align with him morally. But that is irrelevant.

of my investment in Tesla, which I have a substantial amount of money in for my clients that deserve correct representation by their CEO and the board of directors responsibility to running the company as every other company in America is run. So we all know that this is a reality and I'm just the one willing to say it. So people can attack me all they want, but what I really care about is what's best for Tesla and Tesla shareholders. And if these people don't get it, they don't get it. What am I going to do?

Another question is, well, what happens if Tesla outperforms? One user on X gave the example of what if it 10Xs? I think a more modest model, but your open-mindedness to add to the position and continue to see the long-term story around AI and energy.

I still own Tesla. We own a lot of Tesla at my firm, a lot less in my fund because I think the short term and the medium took a pretty bad for Tesla right now. But we still even own it in my fund and I can't really even justify owning it.

But for clients, we own Tesla because I do think something fixes itself at some point and they have the best products. I was just in the new Model Y. It's a great upgrade. It's way better than the old Model Y. And why they're not advertising to consumers that they have a new product is mind-blowing to me. So I've had enough of the BS that Elon knows what he's doing at Tesla. It's clear that he just doesn't care. And his next move is XAI. And by the way, I'm invested in that too. So, you know...

I own XAI stock. And the truth of the matter is Elon's going back to XAI. So if you have any confusion that he's coming back to Tesla, he's not. That's not what his passion or focus is. And there's a great article from, I think, the information that came out today about basically he just doesn't care. And I believe that. So I'm sorry I'm going to stand up for Tesla because I care about climate. I just survived a horrible fire that was created by climate. And I can tell you firsthand that

after seeing it and fighting it myself, that if you're not concerned about what climate change is going to do to you, you're just being foolish here. And Tesla is one of the most important companies to solving climate. So I want to see Tesla succeed. And that is the whole purpose of why I say these things and get criticized. I don't mean to cut you off. We're just short on time. I want to get to Netflix and I want to get to Disney. But I am emotional about it because I love Tesla.

Noted. You've been a holder of Disney. We talked about it a lot, but that Netflix news on their 2030 targets, how do you see both names?

You know, it's funny because I fight about Disney all the time with my coworkers because I still think Disney is wildly undervalued. And after the Netflix announcement, you know, we own Netflix as a top holding in my fund and at my firm, and we've owned it for a long time, and it's been a great investment. And the team there is incredible, and their goals are, I think, great and accurate, and it's a great stock to own. But then you look at Disney trading at this, like, discount with Hulu really doing well.

You know, Hulu has great content. ESPN is about to become a free agent from the cable companies this year where it can be a standalone service. They have these sports services coming out. They've done very well.

I think with movies, not as good as I'd wish, but much better than before. And then theme parks and I think there's this global uncertainty with travel, which is why we've lowered our position a little bit. And I'm not sure how this shakes out with China because Disney and China have a very close relationship. So there are some headwinds with Disney that Netflix doesn't have because they don't have physical locations. But with Disney and the cruise ships, I see this as a cash cow.

So I'm really bullish on Disney. I think the valuation is way cheap, way cheap. But I'm also very bullish on Netflix. Ross Gerber of Gerber Kawasaki, thank you very much. Now coming up on the show is Taiwan braces for digital threats. One U.S. space startup has a bold plan that starts in orbit. Astronis CEO John Gedmark joins us next. This is Bloomberg Technology. ♪

Possibility surrounds us in digital innovation, evolving markets and disruptive ideas. And while promises can inspire dreams, proof is the catalyst for transformation.

At EY Consulting, technology unlocks value. It's data that sharpens your competitive edge, and it's our deep sector insights that can navigate a pathway to real outcomes. This is high-value transformation that drives real change and challenges competitors to keep up. With EY Consulting, it's about proof, not promises. The world is built on code. From the apps we use every day to the systems powering industries, developers like you are the architects of tomorrow. But

But let's be real. The road to innovation can get a little tricky. You need the right tools to move fast, but you also need a community to help you go further. That's where Microsoft comes in. Microsoft has the tools to help you move at lightning speed, like GitHub Copilot, VS Code, and a ton of AI resources to keep you on the cutting edge. But here's the best part.

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Taiwan is teaming up with US startup, Astranis, to launch a satellite that could keep its internet online no matter what. For example, a satellite link would likely be crucial for Taiwan to maintain its communications if a possible Chinese attack were to disrupt its networks. Joining us now is John Gebmark, Astranis CEO here in the San Francisco studio. Let's start with the basics of the technology. What is a micro-geo satellite? What does it do and how is it going to get up there?

Yeah, absolutely. So this is the first time that Taiwan has had a satellite dedicated just to them and for broadband connectivity. And we're able to do that because we're in this special orbit called geostationary orbit. So this is a very high orbit, much higher than low Earth orbit satellite networks you might have heard about.

And this special orbit allows us to park a single satellite over a country or multiple satellites and provide nonstop service with just that one asset. And the launch provider? We'll be launching this satellite along with a number of other of our satellites on a SpaceX rocket later this year. One of the questions I got from the audience was about the orbit. And the question was about the vulnerability. So you kind of went through the benefits of geosynchronous orbit, but what...

the risks involved in that level.

Well, I'm not going to go into details on techniques to counter the kinds of things I think you're talking about. I think that is at the root of that question, yes. What I would say is that resiliency comes from strength in numbers. So this satellite is actually just the beginning. We're going to be launching many satellites. This is why we're spooling up production out of our factory here in San Francisco to launch many dozens of these satellites in the years to come.

And then you can relocate those satellites, you can move them around, you can bring more to bear on a particular issue, regardless of what happens. I think the other thing I'd add is space is actually a much better regime to be in than on the ground or under the sea. If you think about how difficult it is to replace, say, an undersea cable that might get cut,

Space is a very different question, actually. Much easier for us to bring in one or more additional satellites if needed. This seems like a really big commercial development for you. The contract value with Taiwan is worth in excess of $100 million. How do you execute on it? Yeah, so this is a contract with Chung Hua Telecom, the largest telco in Taiwan. They have about a $30 billion market cap.

This is a total value over the service life of the satellite. So what we're finding is that a certain type of customer, they really want this dedicated satellite and really it's a dedicated network. So they get the security, they get this enterprise grade connectivity.

and they get insight and transparency into exactly what's happening in their network. And this is something that we found customers really are looking for now in sort of this age of heightened geopolitical tensions, if you will.

and they're willing to pay a premium for that. Well, that's where we started the conversation, right? Like the communication satellite, but what happens if Taiwan is subject to aggression from China in a possible event, right? Is Astranis a communications satellite company or is it a defense technology company? Well, certainly I would say we're a little bit of both. We are definitely a communications service provider company.

And we now have a number of contracts, actually, with the U.S. military as they become interested in our technology as well. So it is a true dual-use technology, and that's, I think, to the benefit of both our commercial customers and to the U.S. military, we get to benefit from that.

that shared investment and shared infrastructure. I think there is a lot of interest in America's commercial space industry. Could you just explain the basics of your supply chain and your footprint, where all of your center activity is here?

Yeah, we are an American company with the vast, vast majority of our supply chain in the United States. We have very little international footprint on that, actually, and none out of China, if I suspect that's where you're going with that. So, yeah, this is something we've been thinking about for many years now. John Gedmark, Astranis CEO on a big deal with one of Taiwan's leading telecommunications companies. Thank you.

We're about to find out how tariffs and doubts about AI demand are hitting the chip industry. TSMC, the world's biggest contract manufacturer of chips, and ASML, the leading chip-making equipment maker, both report earnings in the next 36 hours. Both have borne the brunt of the broader market sell-off that's focused on trade wars and AI.

Wall Street expects sales and income to rise sharply at both companies. However, it's the outlook and guidance you want to focus on as investors assess how hard trade tensions and macroeconomic concerns put off key customers. The main metric to watch

Analysts see TSMC actually withdrawing its guidance and ASML missing estimates on quarterly bookings. All right, let's take a look at shares of HPE. The stock popped after news that Elliott Investment Management built a position worth more than $1.5 billion into the company. That's according to sources. Bloomberg's Brodie Ford is back with more. So this is an activist play. What does Elliott want from and with HPE?

What does any activist want? They want more money, right? I mean, it appears that Elliott notices that HPE has had a pretty rough year. You know, its share price is down quite a bit. It's underperformed peers like Dell or Supermicro.

And it appears that they see it's a good time to invest and agitate for changes. Now, we haven't heard from Elliott. We haven't heard from HPE. But generally, the playbook here is to find a company that has some pretty good kind of bones to it, but is, you know, apparently being misrun or it's not, you know, really living up to its potential is generally how activists see it. Often that means things as drastic as,

Let's get a new CEO, let's switch up the board, let's do some layoffs, things of that nature. - There's tariffs in the equation, right? Like I think HP said last month that profit this year will be below what people hoped. But I'm like one of those few people that's ripped apart a server. I know that HP is deeply involved in the AI infrastructure build out. Why did they not get that credit from Elliott?

Well, they could be. I mean, part of the calculation could be that, you know, the markets really beat up this name, but they actually have a pretty good position with their networking and with their servers. I think a big question for investors right now with all the hardware names is how much will they be impacted by tariffs? And it's not totally clear.

HPE has a lot of manufacturing in Mexico. I don't believe they have quite the level of Asia exposure, so that could be a benefit, but these tariffs keep changing every day, so it's hard to say.

So to Brody's point, the stock is down like more than 30% a year today, a gain of 4%. It's kind of not really registering in the context of recent sessions. Bloomberg's Brody Ford, big shift on the show today. Thank you very much. That does it for this edition of Bloomberg Technology. Don't forget, check out the podcast. You can find it on the terminal as well as online on Apple, Spotify, and iHeart. Wow, a lot going on in the world of technology. Thanks to everyone watching. This is Bloomberg Technology.

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