Markets Whipsaw on Tariff Uncertainty, Apple Might Hike Prices
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Live from New York, I'm Caroline Hyde. And I'm Ed Ludlow in San Francisco. This is Bloomberg Technology. And it's another day, Ed, of US stocks whipsawing following President Trump's tariffs. This as nervy investors respond to the speculation on tariff delays since refuted by the White House and reports of a legal challenge to those livies.

Well, in the context of tariffs and this market and the technology sector, it is the Mag 7 names that are the focus. Think about an NVIDIA, a name that was significantly lower, swung to a gain, it's held that gain. Analyst downgrades and cuts is part of the story in Apple and Tesla. But at one point in the session, Apple was on track for its biggest three-day drop since October of 2000.

I want to show you some data that was brought up by Apollo Global in their newsletter this morning. And it is the Mag7 names and their North America or U.S. revenues. In Amazon's case, 61% majority in North America, excluding AWS. But for most of them, most of those sales come from outside the U.S. in jurisdictions where tariffs will be held hardest. And that's why there's concern in part that it will be a hit to earnings going forward.

And boy, hasn't that been a story for Apple. Now, let's just return to the key stock that renowned tech bull Dan Ives of Wedbush has cut his price target for the iPhone maker. He's gone way down to $250 from $325, while maintaining, though, an outperform rating. Joining us now, Bloomberg's Ryan Vlastelica. Apple has been in the eye of the storm, and Dan Ives singling that out over the course of the weekend.

Yeah, good morning. Thanks for having me. Apple is really sort of the poster child for tariff-related risk right now. It does so much manufacturing overseas, especially in countries like China and Vietnam, which are some of the countries that have been hit with some of the highest tariff rates. So there is so much uncertainty surrounding the company, surrounding its earnings potential in this kind of environment. What are they going to do? What are tariffs going to look like? Are they going to have to raise prices? If they do, what is that going to mean for demand? Are they going to have

Are they going to absorb these higher costs? If so, what does that mean for margins and earnings? There is so much uncertainty here. And because we're talking about Apple, which is still the biggest company in the world, it obviously has a lot of implications for the market overall.

We were talking before the show about is this a historic Monday or not. Biggest three-day drop for Apple going back to 2000. That gives me a sort of sense of scale. But talk to me about the stock, Ryan. I mean, our colleagues at Bloomberg Intelligence don't think Apple raises prices. It has used mechanisms around the world to stay competitive on the services side in particular. How's the stock viewed?

Well, I think so much of this really depends on what happens with tariffs. There is so much uncertainty on that point. And if they stay in place as they currently are, the outlook is very grim. But if they come off tomorrow, which doesn't seem like it's-- honestly, who knows?

People are still pretty positive about the company's longer term potential, maybe eventually with AI, with services growth, with earnings. It still has a bunch of cash, a very strong balance sheet. There's certainly reasons to be optimistic, but a lot of people I talk to are just very skeptical about it.

Now I will say that if you look at its RSI, it's trading at some of the most oversold levels in years. So there is certainly an argument to be made here that some people feel like it's gotten oversold. Like you said, biggest three-day drop at least at one point since before the iPod. So that tells you the kind of buying opportunity, if you like the stock, that you could be looking at here.

Welcome to this Monday. Bloomberg's Ryan Vlaselica, thank you very much. Let's get more on the wider market turmoil. Angelo Zeno, CFRA Research VP, Senior Equity Analyst, joins us now. And I want to go back to the point that we raised at the top of the show, that if you put the MAG-7 side by side, Angelo, and look at the revenues they derive from outside of the United States, Apple catches the eye, right? There's a lot of it coming ex-USA or ex-North America. How are you modeling that this morning?

Yeah, thanks for having me. So as far as that's concerned, yeah, I mean, listen, I mean, Apple is it's really tough to be a technology hardware company right now. And to us, Apple is probably facing its toughest test in about two decades. Let's call it since the financial crisis where it actually prospered because of the iPhone launch at that point in time. But when you kind of look at Apple specifically here to your point, 43 percent of sales.

here in the US, the rest internationally. So it is a true global company. And the fact that they do have most of their iPhone production in China is the issue at hand. We do think as far as the tariff concerns are concerned right now, there's essentially this $20 billion or so deficit that they're going to have to make up in terms of

you know, if you were to look at over the last 12 months and kind of extract the type of tariff hit that they would have gotten from importing all those goods in terms of in the U.S. So when you think about that and you look at the potential of what they could do here,

in terms of offsetting that $20 billion increase. I think there are a number of things that they can do, but I don't think personally it's something along the lines of them increasing iPhone prices by about 30% or so across the line here in the U.S. because that's just going to cause way too much demand disruption. So they swallow a margin hit, but right now the investor base is having to swallow serious

headline pressure. We are being whipsawed by the latest. We don't know whether this could suddenly on a dime spin into the green. We're off by 2.5%. How do you as a long-term investor hold the trade, Angelo?

Yeah, I mean, listen, you look at where the stock is at now. I mean, we've seen essentially a 30% plus correction in the shares. So in our view, at this point, it's too late to sell the shares if you're an Apple investor. We've told investors we think there's downside to about $155 to $165 a share. That would essentially imply a peak to trough of about 40%. And those are declines that we've seen in the past from Apple stock, and they've recovered and hit new highs recently.

back then. We think this is a point in time where Apple is going to be able to adjust to whatever new scenario that we see. If these 50% plus tariffs from China are here to stay, we think they're going to adjust their business model for that, whether it be increasing their iPhone prices by $100 across the board with the iPhone 17 cycle, and then potentially kind of

when you look at it from an installment cost perspective, that's fairly limited to the consumer out there. But nonetheless, there are a number of things we think Apple can do here to kind of right-size their model. Let's go to the other areas that you focus. You focus on a lot of chip names, and many are worried about the exposure of semiconductors to supply chain in Asia, even though there was a carve-out for semiconductors coming from Asia from a tariff perspective. They're in the green today, Angelo. Is that the right way to be analyzing the sell-off of late?

Yeah, it's interesting. So when we were looking at these shares this morning for a lot of these names, specifically a name like NVIDIA, we thought it was essentially overdone. But you kind of look at the decline we've seen from peak to trough on the semiconductor side of things, it's been about a 40% decline, which is actually similar to the decline that we saw from peak to trough.

back in 2020, 22. And again, it's one of those situations you never know where the bottom is on the chip side of things, but there is clearly some very strong secular opportunities tied to the chip sector, specifically on the AI side of things.

we think that infrastructure build out continues. Clearly it's going to be somewhat ratcheted down because of the tariff situation we're in right now. But nonetheless, I mean, it is an opportunity that persists, we think over the next decade or so. And, you know, Nvidia clearly at that top of the list. But when you look at the profitability of these companies on that AI trade, uh,

That is going to remain intact, of course, with some downside to the estimates. But again, the 40% reduction we've seen in the share prices reflect that. Let me jump in here. The bigger question to me is not just whether the infrastructure build-out continues. It's whether the hyperscaler capex moderates because profit estimates for many of these companies in the semi-space are predicated on that. What's your call on that investment cycle?

Yeah, so I mean, we do think it's going to be challenged. So you kind of look at a year ago and essentially the CapEx numbers just continue to go higher and higher. In our view, it actually, we've probably seen somewhat of a peak type CapEx number here in the near term. We don't think you're talking peak levels at all long term. We actually think

As you go into 2026, we're looking at a capex increase of about 4% for the hyper scalers on a combined basis. It's going to be north of 30% this year. It starts to level out, though, absolutely. But nonetheless, I mean, you kind of look at the secular themes that drive infrastructure spending. It is the cloud. It is digital ad spend. And long term, those are going to be trends that continue to see higher revenue growth.

Angelo, how does this technology market compare to 98, 2000, 2008 and every day of your working life that's gone before it? Yeah, that's a great question. I think, you know, specifically from a valuation perspective, I think the good news is we don't have a valuation problem in tech. And I think historically that has been an issue. These are historically very high growth oriented type names and you always have to worry about

how much can these names really kind of decline I think the great thing is when you look at tech here specifically what's driving it is big tech and big tech has massive free cash flow generation even if we kinda discount some of the tariff issues at hand right now you're still talking about an Apple

If they don't offset that $20 billion or so, it's still going to generate potentially $90 billion or so on an annualized basis. That would be your worst-case scenario. So when we start thinking about the drivers here of tech, the discount now that you've seen here over the last nine to ten months on the valuation side of things, now trading less than 20 times on a calendar 26 basis, again, those estimates have to go down.

But when we kind of look at things here, you got to look at it from a long term perspective. You look at that 20 percent or so discount on broader tech. And I think, you know, overall, if you're a long term investor, I think there's an opportunity here over the next couple of days, weeks. You just got to be willing to lose some money in the near term.

Ride that volatility, Angelo Zeno of CFRA. Great to have you on the show. Thank you. Coming up, we're going to check in on Tesla's stock price following a dramatic price target cut from Wedbush. More on that next. Ed, what are you drilling into?

So I think it's fair to say a lot of people work this Sunday and one of the only markets open to look at was crypto and Bitcoin in particular. We went from like $88,000 per token Friday night down now to around $78,500. It's moderated, but there's divergence with gold. There is the tariff story hitting crypto assets and we'll continue to track it because that was a lot of the focus over the weekend. Just in case you missed it, stick with us. We'll be right back. This is Bloomberg Technology.

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Tesla trading at one point in the session below $218 a share, a price at which Commerce Secretary Howard Lutnick predicted they'd never fall to. Again, that decline followed a 43% price target cut by Wedbush Securities Analyst Daniel Ives, citing Trump's trade policies and a brand crisis created by Elon Musk. Bloomberg's Global Autos editor Craig Trudell is here for more from London. When I was reading the Ives' notes,

There were some very specific points, which is that, for example, in China, it's not just the tariffs themselves. It's the reputation and association of Musk with the policy that might drive Chinese consumers to buy domestic models.

Yeah, that's right. And I mean, I think what we've seen from the Trump administration is that they've really sort of, you know, stoked this nationalistic sentiment in other countries already. You think about Canada being a great example of this.

maybe not great, but an example of this where at hockey games suddenly there's a booing of the national anthem. And we don't have to go that far back in history to think of other companies that have felt the brunt of sort of nationalistic sentiment in China

and felt blowback from that. And so I think that's what I was maybe was alluding to here. And it's maybe a risk that we haven't seen necessarily in China, whereas we've seen these Tesla takedown protests in other countries. It's not something that we're seeing on the streets of, say, Shanghai or Beijing.

He calls for Elon Musk to step up, Craig, and to show leadership. Now, last time I checked, I don't think Elon Musk particularly cares what Wall Street analysts think or ask of him. But are we anticipating a return to leading this business rather than his role at the White House?

I think there was a lot of sort of hope and optimism last week, right, when Politico reported that Musk, you know, was on the cusp of stepping back officially from his roles. But I think, you know, not only did we hear Musk dispute that and say it's, you know, fake news,

We also heard from J.D. Vance, the vice president, talk about this idea that Doge is nowhere near done and allude to the idea that Musk is going to continue to advise this administration for long into the future. And so even if officially he is no longer a special government employee, I think this notion that he would fully step back

from politics seems like a stretch given how assertive and hands-on he's been to this point. Maybe he does go back to spending more time, say, in Austin or at facilities like in California. But I think the bigger problem here is the sort of daily drumbeat of his posts on X that can be really divisive.

Craig Droudal, thanks so much for joining us as always. Meanwhile, coming up, we're going to take a closer look at how the US-China trade tensions could also be playing into the negotiations for TikTok. Sam Sachs, Senior Fellow at New America, joining us. Ed, what are you keeping an eye on? Markets over in Asia overnight and also a piece of news. This is the MSCI AC Asia Pacific Information Tech.

index, clearly heavy declines. But this, as President Trump said that he has spoken to the Japanese prime minister, also getting some headlines crossing the Bloomberg terminal relating to Asia. Trump says China must back off 34% tariff increases by April 8th. Trump says that talks with China on possible meetings will be terminated, and he threatens a 50% additional tariff

on China starting April 9th if they don't meet an April 8th deadline he's talking about to back off of the 30, 34 percent. I think we call them reciprocal tariffs, right, Caro, that were put in place by the Chinese. The report is that we had a deal pretty much with Tic Tac, not a deal, but pretty close. And then China changed the deal because of tariffs.

If I gave a little cut in tariffs, they'd approve that deal in 15 minutes, which shows you the power of tariffs, right? There was President Trump speaking last night aboard Air Force One saying China's objections to U.S. tariffs stalled a deal to sell off TikTok and keep it operating in the U.S. In the last two minutes, the president has posted on Truth Social threatening a 50% additional tariff on China

if they don't remove the 34% reciprocal tariffs that China had put in place by April 8th. You set a deadline that post. I think, Cara, we're seeing all kinds of assets react, some that I'm seeing, for example, Golden Dragon Index, NASDAQ, what it is.

We have more breaking news, Ed. Go for it, Carrie. Pick it up. President Trump saying that all talks with China have been terminated unless tariffs are pulled. So thus far, unless there is a change of sentiment coming from China and they withdraw, as you were just articulating, that extra 34% that they put on on Friday, then all China talks are terminated unless those tariffs are pulled, Ed.

Yeah, I'm going to look at some of the assets just really quick. Shares like Alibaba's US-listed ADRs clearly getting hit, but the Nasdaq Golden Dragon China Index down almost 4%, so it's important. Let's get back to the story we're talking about, and that is the future of TikTok in the United States. Bloomberg's Kurt Wagner joins us. And essentially, Kurt, what the president said last night on Air Force One confirmed what you had reported a couple of days earlier, that the tariff policy of this White House...

derailed a deal that was being negotiated with China to have US investor ownership of TikTok in the US. Take it from there. Well, that's exactly right. This deal, as Trump said, was close to being done. They had the framework in place.

And the tariffs hit, the tariffs were announced and China said, we're gonna pause on this thing. And the news you just shared, Ed and Caroline, makes me think that we're definitely nowhere close to a deal now, right? Things are getting more intense, not less intense on this tariff war. And so, as Trump said, the tariffs work, I would say tariffs have consequences, right? In this case, the deal for TikTok is sort of in the crosshairs of this thing. We knew that would be

The case, I think, I'm not sure if we knew it would be quite this much in the middle of all this, but, you know, part of the geopolitical fight here. Kurt Wagner, we thank you. We have now got the perfect voice to discuss the implications of U.S. and China on technology and more broadly. Sam Sachs is with us, senior fellow at New America. You have worked for tech giants like Siemens setting up their businesses over in Asia. You speak the language.

interpret what is going on at the moment and how China is going to fight the US on this? China anticipated the tariffs but they were shocked by the scale and what we're seeing now is the leadership in Beijing is trying to both signal resolve they say we've got this under control we've diversified our economy

But they're also still hoping for some space for a deal. And let's watch how they navigate doing both at the same time. In TikTok, the deal was ready to come, but tariffs derailed it. And now China's saying we still can maintain leverage at this key moment.

Sam, I'm just going to remind our audience of the breaking news of literally the last 30 seconds, which is that President Trump is saying that all talks with China have been terminated. He had threatened an additional 50% tariff if China had not removed the 34% reciprocal tariff by April 8th. The question, who's in the stronger position here, the United States or China?

Well, first of all, there were no talks actually planned with China. So I'm not sure where that's coming from. China has already moved forward. We heard news that they're building a rail line linking to Europe. They want to secure their exports to Europe. It's going around Russia. They're trying to accommodate European sanctions. They're looking towards emerging economies. They've signaled that they've already significantly reduced their trade and investment with the United States.

They've priced this in, but their economy is weak and they want to try to offset the domestic pressure on the economy in the hopes that maybe Trump will come around. But look, we're quickly moving toward a downward escalatory spiral if Trump moves forward with these compounding tariffs.

If you are Apple, if you are Tesla that has significant revenue in China and you're implicated by the brand destruction of a domestic consumer going for China right now, how do you respond? Do you wait this out? Are you trying to make changes to your business model at this moment?

The problem is these companies attempted to change their business model with the China Plus One, diversifying to India, to Vietnam. But now those trans-shipment companies have also been hit by tariffs, and I think multinationals are reeling from that. Same in the fashion industry. They were double-producing lines to countries that are now impacted by the tariffs. The prices are just going to be passed to the consumer, and multinationals are going to be hurting in the process.

So, Sam, I'll go very quickly back to my same question, but who's got more leeway here to put their economy through pain, China or the United States? You know, what do you do when both countries are under pressure domestically? I think the United States came at this from a very strong position in their own economy while China was weak. And now that may flip. Sam Sachs, New America Senior Fellow, just the perfect guest.

Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York. And I'm Ed Ludlow in San Francisco. Let's talk about the markets and whipsaw, volatility, gyrations, call it what you will, the breaking headlines of the last 30 minutes. Our President Trump talking on Truth Social about ending tariff negotiations with China. The Nasdaq 100 has swung from a 4% decline or more early in the session to a gain. Now it is down 1.9%. It's probably better

exemplified in some of the single mover names. In the context of tariffs, there is a big focus in the research notes and the activity on social media around the Mag7 names. Because of their exposure in terms of revenue outside of the United States, Nvidia is a name that has swung between a significant loss to a significant gain. It is now slightly softer.

Tesla continues to be under pressure. Apple down 6%. And we will get to more about Apple with Bloomberg's Mark Gurman in a moment. Amazon now flat, but had actually had a big reversal of fortunes earlier in the day. Caro, it's very hard to piece where you win and lose in this market. But I think Mag7 is interesting if you just think about where their businesses are around the world.

and the threat of ongoing headline risk is one that investors are having to navigate. Case in point, the last 30 minutes trade. Let's discuss it with Isabel Lee, who joins us on the impact of those that have controlled the stock market, ultimately the big owners, Wall Street. They've been pushing back over the course of the weekend. I think of Bill Ackman's been speaking out. You've had Boris Weinstein, a whole long list, J.B. Diamond. How

How have they basically seen the move shift away from them of late with Trump's commitment to tariffing certainly China in the last 30 minutes? Exactly. It's really been hard to your point, headline risk. And I want to point out that this intraday gap of 7%, more than 7%, is the largest since 2020. And of course, the whole of the country and the whole of the world are affected, but especially the investing class. We have around 10% of Americans, or at least the richest 10%, invested in a huge chunk of this.

don't want to look at their 401ks. There was a meme that says 401k is now 201k. And it's really astonishing. We have strategists cutting down their price targets. VIX jumped to 50. We have one after the other downgrading their U.S. views. And even Fed cuts are shifting by the hour. So it's really an exciting market. We spent the whole weekend, this big take I did with Vildana Hyrek and Denis Tsetsikova, we were just calling people. And everyone was really just worried. That was a common thread.

Team in the control room, let's bring up those pictures from last Wednesday where President Trump walked out with the chart of death. There it is. There is the president. Countries listed by tariffs and I think reciprocals as well. Just anecdotally, some of the responses you got to that specific board in his hands were some of the most astonishing things I've seen in print journalism. Recap some. We have Rich Steinberg. He's a senior wealth

and he was saying he's used to all the stress, but then this is one of the most frustrating he's seen. In fact, he's very, very frustrated. We have that quote in the story. Jay Hatfield of Infrastructure Capital was saying that this is, quote, unambiguously stupid, and there's no reason to cause a, quote, trade war like this. And to Caroline's point, on top of all of this is the reverse wealth effect,

We had a wealth effect for the good of two years. Everyone was feeling flush, everyone was feeling happy, taking vacations, but now it's the exact opposite. And that can have real implications in the economy. If you look at your 401k or your retirement or just your investments in general, you may not want to take that vacation. You may not want to buy that big appliances. And yes, maybe the richest Americans hold majority of the stocks, but if you're an average American, if you have 50,000 in your bank account, a 20% wipe down is still significant. In fact, if that's your whole nest egg, it's a lot scarier than for those who are wealthy.

Bloomberg's Isabelle Lee, brilliant reporting. Good to catch up. Thank you very much.

Let's get back to Apple. And after years of avoiding iPhone price hikes in the United States, Apple may need to finally concede to raise its $999 flagship model pricing as tariffs hit production. Let's go to Bloomberg's Mark Gurman. This was the subject of this weekend's Power On. You explained the historic strategy very well, which is Apple's not raised prices. It has removed the bottom tier of handset and only offered a premium. So what happens next?

Currently, there is precedent for Apple raising prices outside of the U.S. We've seen it post-Brexit in the U.K. We've seen price adjustments in the European Union. We saw 25% iPhone price hikes in 2022 in Japan. Seen some adjustments in Canada.

in Australia but you're right in the US it's been pretty stagnant it's actually been one of the only things in the technology world over the last decade that's been pretty consistent but given these tariffs something's got to give and there's going to be adjustments with suppliers they're going to push suppliers to give them better pricing they're going to eat some of the costs themselves they're going to make supply chain changes but ultimately I do strongly believe they will have to make some price adjustments

probably with the iPhone 17 launch later in the year. And this is going to be a big sea change for Apple. Obviously, it's a big shift, but they do have some ways to help the consumer here. They've got a trade-in program. They have installing plans for all the carriers now. So I think from a consumer standpoint, it's not going to be a massive negative. Now, we've seen some analyst reports and commentary over the last...

few days, I saw one website claim that a made-in-USA iPhone would cost $30,000 per unit. I've seen analyst notes saying a made-in-USA iPhone could cost $3,000 to $3,500. The good news is that these are completely misguided. Apple's not moving production to the US, certainly not for the iPhone. What you're going to see is them moving to more of these safe havens outside of China that

are pushing terror that are going to get hit with tariffs, but less so India, for instance, you know, prior to Trump's post earlier today, about a 50% tariff, uh, India was at 50%, uh, of the size of the tariff on China coming in around 26% versus the prior 54%. Right. And so that,

is a big improvement. Vietnam is in the high 40s, but that's still an improvement over the 54%. And they've been stuffing the U.S. channel over the last several months with more units in order to avoid those tariffs. Can I quickly get your expertise on what Tim Cook is thinking about right now as well? We all thought he was a marvelous politician in and of himself, the way in which he'd managed to navigate the previous administration. How much do you think he's desperately trying to get some sort of carve out?

Extremely desperately, but it seems like Trump, as we expected, is even more emboldened in his second tour or his second term. And he is doing whatever he wants at this point. It doesn't seem like he's working with companies on exemptions. It doesn't seem like he cares about who showed up to his inauguration. It doesn't seem to care that Apple said they're going to invest half a trillion dollars in the U.S.,

basically because of him. He's just doing whatever he wants, and it doesn't seem like he's taking the impact into account.

There's how this is playing out in markets and the stock analysis, and then there's how it's playing out in the culture, how everyday people talk about MAGA and tariffs and Apple. This is a video from a post that Overheard and Wall Street made, and I'm not sharing it with you, Mark, flippantly, but they're suggesting that in the future, Wall Street analysts will quit and start assembling iPhones in the Midwest, as far as I can tell. You said that won't happen. Just explain in 30 seconds why. I mean, there's...

I mean, they're certainly, you know, they have the right to quit their jobs and become manufacturing workers. But I don't anticipate Apple moving outside of Asia in any considerable way. The one thing I do see them doing is decentralizing their supply chain. Right. But I don't see that coming to the U.S. I think you'll see more production in parts of South America.

right? Maybe parts of Europe, maybe parts of in more parts of India and China. But I don't think Midwest manufacturing facilities to create iPhones are coming anytime soon. I certainly don't think they're on the table right now. Makes for a good meme. But Mark Gurman is nothing but straight talk. We thank you so much. Nice. Let's take a quick look at what's happening in semiconductors right now, though, Ed, because throughout the trading day, we have basically been in the green. Whipsawed somewhat on this headline risk, but

The Sox up more than a percentage point. Nvidia now up 1.5%, shaking off that anxiety around the yet further tariffs coming China's way, if Trump is to be believed on Truth Social. Broadcom up 3%. Let's dig into what all of this means to the industry. Peter Elstrom, I'm pleased to say, is doing a tour of the US at the moment. You're here with me in New York.

And people basically had seen the chipset sector waive because of, again, its exposure from a supply chain to Asia. Why are they managing to shake it off a little bit today? Well, the volatility here is really surprising. I thought I knew what the tariffs were as I was walking over here to the set, and they changed even on my way over. So we know that Taiwan is going to get hit with tariffs around 32%. China also is looking at some tariffs at this point. So there are concerns about what exactly those costs are going to be as products move into the U.S.,

There'll be an exception for the chips themselves. At least so far, we've seen the White House carve out this exception for the actual chips. But there's not an exception for the products. And TSMC, of course, makes products for Apple, as Gurman was referring to earlier, and also Nvidia in particular. And it's not exactly clear what those products are going to do when it comes to these tariffs. You may see some exceptions there.

And the analysts are trying to figure this out right now. They do believe that Nvidia servers coming into the US are going to be exempted from the tariffs, but it's not clear and the White House hasn't been able to give clarity on that point so far. It's an amazing point that actually many don't understand specific policies relates to tariffs. The other part of it is that everything your team's reported for the last two years, which is the United States wants to have more semiconductor manufacturing, but fabs take time and billions of dollars to

implement and build. Where are we at in that process? Right. You talked about these companies that are trying to sidestep the tariffs from the Trump administration right now. Apple, of course, has been very good at this. Look at TSMC, though, certainly not as high profile, but TSMC came forward. They were already spending $65 billion on chip capacity in the U.S. They promised to spend another $100 billion on capacity in the U.S. You think that they would be one of the companies that would get some exemptions here, but so far,

the Trump administration has been holding pretty firm and it's not clear exactly how they're going to be affected as they make chips in Taiwan and send them over to the US. Still they have the bulk of their manufacturing in Taiwan. They need to be able to send those chips someplace else and then they come into the United States. So TSMC is making progress in building this geographic diversification but they haven't made that much progress so far.

What's so interesting is tomorrow we get Samsung preliminary revenue. It's going to be down and they're in the line of fire when it comes to U.S. curbs. And at the same time, we're all worried about AI infrastructure bubbles that we were talking about even before this. So how much are we dialing up into what already is a feeling that we're over allocated to the chip sector?

Well, that's the big question with all of these huge investments into AI and into data centers in particular. We know that the hyperscalers are spending tens of billions of dollars at this point on that capacity, but we don't know what kind of revenue is sitting on the other side of it. So we're trying to get some insight into that. Samsung is certainly going to talk about their progress in making memory chips for AI.

They've been behind SK Hynix in particular in terms of building that kind of capability, pairing up with NVIDIA at this point. But we're going to get some sign of their progress tomorrow, and we'll see whether they give us any indication about what that AI demand is in the end.

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Let's turn to another side of the markets right now, because 2025, we're supposed to see a rebound in IPO demand. But look, this market route following Trump's tariff announcements has led several companies, Klarna, StubHub, for example, to pause their plans. Here to talk about this all, Greg Martin, co-founder of Rainmaker Securities. Rainmaking was meant to be on, and now we understand there's a pullback because these markets are treacherous, Greg. Are all IPOs on ice?

Well, thank you for having me on. I was hoping to be able to talk about the excitement we were going to have coming into, you know, Klarna and StubHub hitting the road and hopefully a reemergence of the IPO market. But the worst thing for the IPO market is uncertainty and instability. And that's what we have in stage right now. I mean, the VIX at 45 and approaching 50. It's crazy how unstable we are right now. And it's a huge wet blanket on the IPO market. StubHub, Klarna.

We see Chime, for example, delaying the brands that we know have already paused. But there's others waiting in the wings. We were already discussing, well, maybe there'd be Shein, Bolt, Discord. Many had been articulated in the markets, varying amounts of reports as to whether or not they'd actually tap. But Greg, do we think there has to be a step away for the entirety of 2025 as it stands?

I think that's strong. I think it's a little bit wait and see. We're definitely in pause mode. I think people want to see what materializes. I remain an optimist. I'm hopeful that trade deals will get done. But if this uncertainty, this instability persists for a long time, if we start to have

fears of a global recession and trade wars, it could push this thing considerably to the end or next year. I think right now it's really up in the air, as we pointed out. Florida and StubHub have delayed. Hinge Health was supposed to go public. Chime, Circle just filed last week. It's just a lot of uncertainty. And I think right now it's wait and see mode. So I think it's probably at least a quarter of pause.

What's interesting, let's bring those names back up, is a lot of people work at those companies. A lot of them have a broad base of investors. Many of them, the employees and investors, watch this program. Does this pause in the IPO window open up the secondaries market or put pressure on the companies to give employees liquidity in other ways?

Absolutely. We've had a huge dearth of liquidity since 2021, frankly, and people have been waiting for the IPO market to open up. We've started to see companies doing tender offers in order to alleviate some of the liquidity pressure, but there's still a ton of liquidity pressure that persists. And frankly, in this period, there's a lot of fear in the market, and employees and workers in all of these companies are starting to think, I'd like to have a little bit more of my

net worth and cash. And so I think there's going to be a lot of pressure for companies to enable secondaries trading. So I do expect some secondary trading will happen. The flip side of that, though, is that investors, when they buy secondaries, when they buy into these private companies before they go public, they want to see a public market in the future because they start to think about liquidity. So there's a tradeoff there. And so we are going to see more liquidity pressure, but we also will see a little bit of a pause on demand. So it'll be interesting to see how the market plays out.

Greg, is this an America problem or it's a global market problem for IPOs? It's a global problem. I mean, this is something that hits everybody everywhere in every part of the world and it needs to be sorted out. We're seeing every single market affected by this. And, you know, the United States is the center of it all, of course, but everyone is affected by this and it needs to get sorted out or else we could have some long-term issues. India was really active, for example, Greg.

Though I want to just see where the blame lies because briefly, CoreWeave wasn't exactly accepted with welcome arms when it came to the market. It's since rallied a bit. But was this already in the making?

I don't think it was necessarily in the wake making. I mean, for we was, it was a unique story. It had major customer concentration issues. It had a huge amount of debt. And frankly, it's actually traded up quite well since the IPO and actually is still up about 20% since the IPO to 40, despite the major market pullback last, last week. So I,

I don't think this was necessarily in play before CoreWeave. CoreWeave was a different story. I think this is something that hit from left field, and I think it's something that we're all having to deal with. And right now, we're just not certain which direction we'll go, and that's why the market is in pause. Greg Martin, co-founder of Rainmaker Securities. Thank you very much. Well, the EU remains open to and strongly prefers negotiations. We will not wait endlessly.

That was EU Trade Minister Maros Shevkovich. Now, trade ministers from the bloc have been meeting in Luxembourg and discussing how the bloc should respond to Trump's tariffs. For more, let's bring in Bloomberg's Michael Shepherd. That's the thing about tariffs. They can go both ways. There's a response. What do we know about the EU's position as it stands?

Well, as we heard from the trade minister, they are willing to sit tight for a minute, but not for too long. They want to see how the effects of the latest downdraft in markets play out here in Washington and whether it might cause the Trump administration to start rethinking the levies that they have imposed on the block. That is not just the 20 percent across the board tariffs that Trump unveiled last week, but also the measures targeting

Autos that took effect on Thursday and then the levies that took effect previously against steel and aluminum. Taken together, they have really angered officials in the European Union and prompting calls for a strong response and a potential retaliation that could take aim at America's biggest tech companies. And this would be through a measure known as the anti-coercion instrument. And that could result in higher taxes, including through the digital service tax.

against American tech giants, the ones that we know so well like Meta, Google and others. Shep, what's interesting is the EU is going to be watching closely what's just being posted on Truth Social, Trump threatening yet more tariffs on China because of their tough response. So how does the EU navigate not having yet further tariff are their direction?

Well, Caro, they are really having to walk a tightrope here. And even before his tariffs announcement last week, President Donald Trump warned both China and the European Union in social media posts that he would retaliate against them over any reprisals that they unveiled. And China responded very quickly last week to Trump's across-the-board tariffs.

hitting all Chinese goods with heavy tariffs of their own. And because the European Union has waited a moment, they have a chance now to see how that possibility of a reprisal to a reprisal from the U.S. could play out.

I just want to think of materially how this impacts technology companies, right? So for example, Apple makes some iMac products in Ireland, part of the EU, subject to a 20% tariff. Intel has a fab in Ireland, other facilities in Germany under consideration. Just that sort of physical component, Mike.

Well, it's the physical components, Ed, but it's also the whole demand side question, too. If there's a chill in the global economy, if there's an overall bump in inflation, that will also weigh on global commerce and even anything happening on these shores, if it's imported to the U.S. or even if it's just consumed in the U.S.,

tech companies like every other business across the U.S. will start to feel it. A lot of the tariffs are paid here by consumers in this country. It's not just, as the president has liked to say, those countries paying the cost as he sees it.

All stock markets currently down. We thank you, Mike Shepard there. Look, let's quickly look at how the markets have fared. It's been ugly in Europe and the Stocks at 100 is sold off in particular. ASML is still off. But we think more broadly about the U.S. just in gyration mode at the moment. We're off by three quarters percent on the NASDAQ 100. We're in a bear market. We're likely going to enter a bear market on the S&P 500. But that does it for this edition of Bloomberg Technology. And we really are speaking once again with Ed Ludlow back in the fold in San Francisco. It's a joy to have you back on.

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