IBM Doubles Down on AI, Palantir Falls Short of Analysts’ Expectations
36:30 Share

You're listening to an iHeart Podcast. 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. Developers like you are building the future, but you

But you need the right tools to move fast and go further, right? That's where Microsoft comes in. With tools like GitHub Copilot, VS Code, and Azure AI Foundry, you have everything you need to push the limits and bring your ideas to life faster. And with security, compliance, and responsible AI built in, you can focus on what matters most, building the next big thing. Learn more at developer.microsoft.com.

Bloomberg Audio Studios. Podcasts. Radio. News. From the heart of where innovation, money, and power collide. In Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. ♪♪

Live from New York, this is Bloomberg Technology. Coming up, the CEO of IBM joins the show as Big Blue promises to help simplify and scale enterprise AI. Plus, Palantir, it tumbles despite raising its revenue forecast, while earnings fail to live up to its current valuation. And Tesla under pressure as monthly sales continue falling hard across Europe.

But first, we check in on these markets. On tenterhooks, we have the Fed coming out tomorrow, likely holding rates. But could we get a more hawkish commentary coming out of the Fed chair? That's what Bloomberg Intelligence is expecting. The Nasdaq 100 up 0.7% as we hear Treasury Secretary Scott Besson giving evidence on the Hill as well. We'll get to analysis that in a moment. But we're still down by 0.7% more broadly as we have anxiety around trade.

Move on to the individual movers. One of the key stocks that tugs us lower by 12% Palantir. Look, it's still the best performer on the NASDAQ 100 so far this year, but the forward-looking guidance is not enough to substantiate a...

Extraordinary valuation. We'll dig into that stock a little bit later in the show. IBM currently trading flat, managing to outperform the rest of the market, as it has done so far this year. We'll get out to think their annual event where they unveil yet more software to basically align AI, to make sense of all your AI agent offerings. We'll have Arvind Krishna in but a moment. But first, we go to U.S. Treasury Secretary Scott Besson, testifying in front of the House Appropriations Committee, speaking on efficiency on budget contributions.

cuts and the state of the U.S. economy. Pleased to welcome Tyler Kendall, joining from outside the White House. And it does seem to be pushing on Doge and what's really been touched here so far, Tyler. Yeah. Hey, Caroline. Well, this is an oversight hearing, so it was widely expected that lawmakers were going to push him on Doge. The Treasury Secretary said that it's the Department of Government Efficiency, not the Department of Government Extinction, and that he does intend to keep the Treasury up and running to the best of his ability and with the most capabilities as possible.

POSSIBLE, BUT DID NOTE THAT HE HAS ALREADY CUT $2 BILLION FROM THE IRS WITHOUT ANY DISRUPTION. BEYOND THAT, THOUGH, HE DID GET INTO SOME TARIFF POLICY GRILLED BY THESE LAWMAKERS WHO WANT MORE CLARITY WHEN IT COMES TO WHAT THE TRADE STRATEGY LOOKS LIKE AHEAD. HE DID SAY THAT AS OF NOW, THE U.S. HAS NOT ENGAGED IN NEGOTIATIONS WITH CHINA, BUT REITERATED WHAT WE'VE OFTEN HEARD FROM THIS ADMINISTRATION, WHICH IS THAT WE COULD EXPECT

some of those preliminary framework agreements to come as soon as this week. He also sort of outlined somewhat of a timeline here. He said that ultimately we could see 80 to 90% of our 15 top trading partners clinch deals by the end of this year.

about the impacts that these tariffs can have on the economy, considering that Scott Besson really has been at the forefront of trying to defend this administration's economic policies. He said he's not concerned about a U.S. recession and that he's looking forward to the Q1 GDP numbers being revised. But as Bloomberg Economics cautions, that doesn't necessarily mean that they are going to be revised up. And then lastly, I will end on this because this is very important here. We were wondering if we were going to get a firmer X date, a date when the U.S. government could default on its debt, because that is seen as sort of that

hardline number that lawmakers are up against to pass the reconciliation package that this administration is really banking on to get more cash into consumers pockets quickly when it comes to their tax cut agenda. He said it's forthcoming but that he cannot give lawmakers that updated number as of now because they are still sorting through the tax receipts from April. A macro perspective from Tyler Kendall. Thanks so much.

That's what's going on on the Hill. Simultaneously, we've got to go to what's happening with IBM. I'm pleased to welcome the CEO, Arvind Krishna, who's coming from the company's Think Conference, an annual event. And Arvind, I'm just excited to hear really from you the pace of change that's happening with agentic AI. I think you put out there that in three years' time, there's going to be one billion apps. It is so noisy, it is cluttered. How are you managing to streamline it for your customers?

Look, first, I think that number is the really interesting number. A billion new applications using AI, over a third of them using agentic AI. And the way that we are approaching it is, how do we make it easy for our customers, leverage their own data,

insert their own data into the models, and then leverage it to make the enterprise a lot more productive. That's what we're after building, and that's what we just announced with our Watson X orchestrate with agentic capabilities, including 150 new agents, some from us and some from our partners.

150 agents sounds an extraordinary number of it and you've got a big book of business already when it comes to generative AI six billion dollars and growing but how much are you seeing the CEOs you serve pushing back on on overwhelm how are you managing to help them navigate what feels like in some ways a less than productive environment for the amount that they're investing in generative AI look

I think that what CEOs are concerned about is that now that you have gone, the era of experimentation, as I call it, is over. Now people are looking for business value on AI. As they're doing that, they have discovered that about 25% of the time, these projects are paying off very well for them.

So learn from that 25 and then figure out what are the inhibitors in the other 75 and take those out. And those are invariably. There's fragmentation in the environment. So how do you have a more integrated environment? You've got to make sure that there is value in the AI projects. Don't just do an experiment.

and leave it on the shelf. You've got to scale it and deploy it across the enterprise. So how do you integrate? How do you create the right hybrid environment? That's what we're helping them with. And then we believe that 25 will go all the way up to 50 or 75, at which point that's a great return for the CEOs.

That software that you're unveiling, those consulting offerings that you continue to provide, Alvin, at the moment, how much is that bearing fruit in this current environment? How willing are these CEOs to experiment and move on from experimentation when we've got a really uncertain economy on our hands? Look, I'm a...

more of an optimist on the uses of technology in the current environment than a pessimist. And why do I say that? So when you have supply chain issues, you have cost issues, you have productivity issues, technology becomes an answer to help you scale the business without having to add a lot of physical cost into the business.

So I find the appetite of the CEOs is quite high to spend on technology as long as they can see a return that is, I'll call it, short to medium term, meaning six months, 12 months, 18 months. I find people leaning in very heavily.

And I think that's why you see enterprise tech spending has remained robust despite all of these issues that could be talked about. What about government at the moment? Scott Besson getting grilled on a hill at the moment around Doge. And that has had implications for your own business. I think it's about 15 contracts, we understand, have been cancelled. Are more to come? Are you seeing an end to that cancellation process? I actually choose not to get worried about Doge.

I think that the areas where we have very robust contracts, when we're helping the VA process claims, we help the GSA on expense management, we help the DoD on payroll, those remain very robust, and I don't believe that those will come under any significant attack.

Areas which do come under attack are much more what I call discretionary or much more time and material or labor augmentation based. Those may come under attack. It actually does not worry me. I believe that even if those come under attack, there is more than enough offset from the areas that are more critical. Interesting. So basically any cancellations will be outweighed by business that you potentially can win within the government as well?

I believe that from having talked to very senior members of the administration, there is a huge appetite to use technology to modernize government and to help make government itself more efficient. You can't achieve efficiency just based on cost cutting. You actually also will have to invest in technology. And I believe, and not just my belief, from having spoken to them, they have an appetite to do that.

I'll tell you where there's appetite, air traffic control. And Trump himself talking about maybe Raytheon, IBM coming in to help solve some of the real anxieties we've got, just a loss of radar over happening in Newark. Is that progressing, Arvind? Are you able to share on how any sort of contract might shape up?

Look, I don't want to talk about any specific contract or any specific agency, but I think what he just pointed out is a great example where technology will be part of the answer. Better integration, better computing capabilities, better communication capabilities, all of those will play a role because right now we are living on not exactly, but essentially, let's call it a slightly evolved system that was built in the 1970s.

Arvind, what's crucial about air traffic control is accuracy. And I know that's almost where everyone's eyes are when it comes to agentic AI, when it comes to generative AI, is the risk of the underlying data being inaccurate and how that compounds. How are you managing to tackle that sort of area of anxiety and reality?

I always break the problem down. The core of air traffic control has to be built on very precise data, completely accurate data. You're not going to go use agentic AI to estimate where a plane is. That's going to be based on much more physics and hard engineering. Now, could agentic AI come in trying to optimize routes and worrying about how do you increase the total flow and capacity at an airport? Perhaps.

but I'm using the word perhaps because there's a lot of careful work to be done there. But could agentic AI be used to process claims faster at Social Security or at the VA? Absolutely. And then you make citizens happier, you deliver them services faster at a lower cost. That's where I would go first with agentic AI.

And in the private sector, they're looking for accuracy and that's something you're offering at the moment. How much is you just seeing the adoption and the use and productive use of Agenda KI being limited by that underlying data right now or is that something that we're streamlining already? I always advise our clients start with the use cases where you can live with some risk, where you do not need it to be 100% accurate.

So if you think about customer service, you think about end client experience, I think about our internal IT help list. Those are all areas where when you were dealing with people, you actually had a 10 or 15% error rate. So now that you deal with the genetic AI, you can actually have a lower error rate than that, but maybe not perfect, but you can still live with it.

think is all about innovation. I'm looking at the car behind you. I'm thinking about the way in which you're also pushing the agenda, not only when it comes to hybrid, when it comes to on-prem, when you think about the innovations you're making on mainframes, but quantum. You're getting a lot of questions on quantum right now. Scott Besson wants the US to lead in AI, but also in quantum computing. How is that making a difference in your business right now? Well,

We are very, very pleased with the innovation we brought out here. We talked about the GenTech AI. You just mentioned the mainframe. We can do 450 billion AI inferences per day on the latest mainframe we just announced this quarter, the Z17. Think about using that in financial systems to help reduce fraud. So that's an incredible area of innovation. On quantum, part of the reason we announced the huge investment last year

and into quantum, and we just brought out the quantum system too this year, is because we are very excited where that will go. That's an area in which we believe the U.S. must and can lead on quantum computing, both for national security, but also for competitive advantage and for growing a business. And is that competitive advantage continue to grow here in the United States? You've just unveiled a huge amount of investment into the U.S.?

Yes. So we put $150 billion here into the US because we believe that if I look at AI, I look at hybrid cloud, and I look at quantum coming, the growth opportunities are here. So we want to invest to take advantage of these opportunities. IBM Chairman, President, CEO, Arvind Krishna, live from Think, we very much appreciate your time today.

Now, we're also watching shares of other providers. One of the partners that Arvind's offering right now is ServiceNow. And look, its flagship generative AI software product, dubbed Now Assist, apparently is going to hit $1 billion in annual contracted business by the next year. Shares off by 0.6%, in line with the rest of the market. More next, this is Bloomberg Technology.

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.

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.

Let's go back to the state of the markets. Currently under pressure, we're still trying to consider what the tariff impact is. U.S. Treasury Secretary Scott Besson testifying in front of the House Appropriations Committee on the Hill saying there are no signs of a recession.

I'm pleased to welcome Janet Mui, RBC Bruin Dolphin, Head of Market Analysis. And look, for a tech investor right now, the anxiety has been around valuations of big tech in this current environment. Do you think that we are out of the woods in a recessionary environment? Is that still too early to call?

Hi, Caroline. Thanks for having me. I think it's too early to call, but I think the base case is no recession. I think we saw from the latest labor market data that the job market is pretty resilient. And I think it will take a lot more pain for us to go into recession. And I understand, you know, tariffs...

is creating a lot of anxiety and obviously a lot of paralyzes on trade flows and investment decisions. But there are also offsets that are happening, for example, significantly lower oil prices and potential tax package that is going to happen. And I think ex-US, things are looking okay as well. So I think it's premature to conclude that there would be a US recession, but obviously the stacks are high. Much has been said about the US as a government entity,

and it's buying or indeed pulling back on expenditure around Doge. We just had the IBM CEO join the show saying, look, he's more than confident that any new business within the U.S. government he wins will offset for any contracts cut. You've got Palantir today once again showing real resiliency in their U.S. government offering. How much are you seeing big tech being able to weather at the moment? Any dialback in government spending but also private sector spending?

I think what we learned from the latest earnings results regarding the big tech is that the cap tax on AI remains unchanged. And in fact, I think there is still some pickup in that spending. So I think despite the distractions on tariff and the near-term cyclical outlook, I think the longer-term AI theme remains undebatable. And I think that that's one area where it can really drive productivity. And I think this is an area that corporates are still very much intended

and happy to spend on. So I think that long-term trend is intact. And I think despite the recent pause in some investment decisions, I think there's some area to be excited still about. And it's interesting that, of course, that

focus on spending had really benefited the hardware offering out there of late, or at least the chip design side when it was 2024. 2025, the outperformers have been software offerings such as IBM, which is up about 13% year to date, Palantir that is still the best performer on the main benchmarks. Janet, is it still about a software win right now, or can you go back into the hardware?

I think in the near term, the software side will likely still outperform and be investors' preference. Because for now, if you think about it, it's a trade uncertainty that is top of mind. And there is some scaleback of tariffs, but a

a big question mark remains. So on that side, you can argue that the software side is less impacted, right? So it's just logical to make that near-term conclusion. But having said that, I think on the hardware side, I think the valuations of some of those key infrastructure

and chip design stocks have come down. And I think it's really quite fair in value, to be honest. A lot of the concerns on overvaluation has come back down a lot. So it also presents great opportunities for long-term investors because those are really great companies.

I'm going to go global with you, Janet, because you're based over the pond right now. And I'm interested in how tech in Europe has performed, because ASML, pinup for the industry, it's down a lot this year. Has there been buying of Europe and other regions?

Overall speaking, I think the trend is that we are shifting a bit more of our exposure from the US to Europe. I think that's fair enough given what's happening at the moment. And I think for European tech, for example, ASML that you mentioned, those are global leaders, or in fact has a monopoly on the machine.

that produces all these chips. So I think, you know, there are some concerns, near-term cyclical difficulty, but over the long term, we're still pretty confident on these cyclical leaders.

And what's so interesting, Janet, with your perspective is you can go cross-asset for us. This week's been a big week for corporate debt sales from big tech. When you think about Apple coming after its earnings, we had Google last week for the first time in years. Have you seen more appetite across the full breadth of assets when it comes to technology?

If you talk about corporate debt, right now we have a preference on government bond over corporates, just purely on the bond side. Of course, it really depends on specific sectors and idiosyncratic issuers, but generally speaking, we don't think the corporate spreads reflect the potential recessionary. It's not a base case for sure, but I think...

We just have to be prepared for either scenario. So if we do go into recession or more economic slowdown, I think government bonds would be the place to be instead of corporate credit. We're coming to the tail end of earnings. We've still got AMD, ARM. You've, of course, got the juggernaut that is Nvidia. But what are the catalysts for here on out at the moment? Is it fundamentals or is it still the breakthrough when it comes to tariffs and to trade?

I think for these individual stocks, the fundamentals will be absolutely important.

I think so far, as I mentioned, I think the AI CapEx remains intact. But I think there is concern on profit margins, obviously. And also there are concerns from the Chinese competitors, etc. So I think we have to watch the fundamentals. But essentially, I think for macro investors, we'll still be looking a lot at what the Fed plans to do, for example, and watch out for really the near-term economic data from the U.S.,

And let's just go there to the Fed. I mean, are you expecting any sort of hawkishness or a dose of dovishness coming out of the Fed tomorrow?

Well, to be honest, I think they are likely to stay on hold. And I think we shouldn't be overly excited about the potential for shifting to more dovishness because I think given the inflation, and particularly I think consumer inflation expectation is really high at the moment. And I think there is a high bar for the Fed to switch to more dovishness. So I wouldn't bet on that yet.

Janet Mui, RBC Brew and Dolphin, great to have some time with you. Thank you very much. Now coming up, one of OpenAI's major stakeholders is the biggest holdout

as the chat gpt maker tries to restructure we're talking microsoft next meanwhile keep an eye on what's happening with tesla shares we have seen yet further sales pressure over in europe disastrous numbers coming out of not just sweden and some of the nordics denmark but also in the uk as it finally turns negative as well in april in a big way we're off by almost two percent 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.

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 let's

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 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.

Time now for Talking Tech and first up, Palantir. Well, shares are really driven lower today. That's after its financial results failed to live up to investors' loftiest expectations. Though the company bumped up its 2025 revenue forecast to about $4 billion, representing growth of some 36% from last year, valuations just too high. We're off by 12%.

Meanwhile, Google says it will appeal a federal ruling to break up its ad manager tech tool. But Google is arguing that the DOJ's remedies go far beyond the court's narrow ruling. And OpenAI has agreed to buy Windsurf, an AI-assisted coding tool, formerly known as Codium, for about $3 billion, according to sources. This marks the Chachi PT maker's largest acquisition to date. And the deal has not yet closed. We'll have more on OpenAI in a moment, but now let's check in on these markets, because we are under pressure

6 tenths of a percent off by the Nasdaq 100. We wait with bated breath. What will happen with the U.S.-Canada meeting in terms of tariffs and trade talks? But what will happen with the Federal Reserve in terms of the direction of travel for rates? Will we get an inflationary sentiment? Will we get hawkish tone from Fed Chair Powell tomorrow? We are currently on tenterhooks with Bitcoin currently up a quarter of a percent, 94,461.

Let's talk about DoorDash. It's on a bit of a buying spree following its earnings beat. It announced two multi-billion dollar acquisitions. London-based delivery company Deliveroo for about $4 billion and hospitality tech company Seven Rooms for $1.2 billion. Now, the acquisitions will expand DoorDash's reach to over 40 countries. Let's get the inside track. Blue Meg's Natalie Leung. We start on the M&A before we go to the fundamentals. Why are they suddenly expanding outside the U.S., Natalie?

And so it really comes at a time where DoorDash is at a strong financial position. And it thinks it can go into the UK and sort of the more urban European markets and replicate that playbook that has took them to a dominant position in the US where they cover two-thirds of the market.

Okay, so they expand globally now in 40 countries. They're adding on the ability to be booking your restaurant with seven rooms that actually already been working alongside in partnership and now they make the acquisition. Deliveroo's been bought. The shares are down on the day though. Can you just talk about what the fundamentals are telling us right now?

Yeah, so they reported earnings today. The 2Q orders outlook was a beat. The adjusted EBITDA outlook was a bit conservative with the midpoint missing analyst estimates due to the ongoing investment into these new international markets and businesses. And so analysts would be looking at how they're going to invest and spread across these markets as they grow in the coming years. And just...

Dig in a little bit as to why I want to be booking my restaurant via the app as well as getting the food sent to me via DoorDash. How is that the right sort of allocation of 1.2 billion?

Yeah, for DoorDash, this is really expanding their enterprise offerings for restaurants. This is not only a consumer-facing reservation platform like Resi or OpenTable, but it is also for restaurants to build up loyalty or reach customers more easily, like whether they're in restaurants or they're ordering on the DoorDash platform. So there's two sides of this here, both consumer-facing and a B2B side of it.

Natalie Leung, breaking it all down for us, we thank you. Let's turn our attentions to another set of earnings that seem to underwhelm investors. Shares of Palantir plunging after the company presented an earnings outlook that fell short of some pretty lofty expectations, I might add. Palantir is one of the most popular trades among retail investors, too.

Let's just think about how smaller investors are reacting to the news. Amit Kukreja is with us, retail investor and CEO of AK Media. About a quarter of a million followers you've got across YouTube, across X. You are very popular for your thoughts on the stock among what, well, Dr. Karp himself has called a retail army. What did you make of the numbers today?

Hey, Carolyn. Thanks for having me on the show. I've been covering the company for the better part of five years now, and I've been joined with a very passionate retail investor base. And there was something that retail saw in this stock when it was trading in the single digits that Wall Street did not see. Obviously, we've seen what has happened since then, and now Wall Street is buying it at a higher premium. But maybe that's because it deserves a higher premium. I mean, you're talking about a company that just did 39% year-over-year revenue growth, 71% U.S. commercial growth, the remaining deal value,

is up 127%. Their US government business is now accelerating to 45% year-over-year growth. It's a company doing $900 million in revenue, nearly $900 million, with less than 800 customers. I know the valuation is aggressive here, but I think the growth is starting to warrant it. Just a double click on the market capitalization. Of $255 billion, the stock could run, what,

excessively this year many would say more than 60% higher, no wonder we pull back a little bit. But I'm interested in your take perhaps of some of the analysts out there. Jeffrey is saying, look, this is really a retail trade. I'm not hearing people talking about Palantir in the institutional market in any way the same amount that we're hearing in the retail community. Is that retail resilience there?

Well, if you look at the institutional and retail ownership split, it's 50-50. So this is not Tesla in 2019 where it was 70-30. I think there's a 50-50 split. So there's obviously institutional investors that are excited about the name. But in terms of the valuation, let's take a second and step back.

OpenAI is worth $300 billion on the private markets, and they're not even profitable. AIG said this a month ago at their investor day, and Pounder quoted this in their slide deck in their earnings yesterday. AIG expects the adoption of an AI-powered underwriting solution leveraging AIP, Pounder's core software offering, to double its five-year revenue CAGR from 10% to 20%.

Alex Karp, the CEO of the company, has been saying that large language models largely are becoming commoditized. The implementation of them is what matters. I'm not saying the stock is cheap. I'm saying the aggressive, obviously, is... the multiple is aggressive. But it might be warranted because the implementation of AI is what really matters, and PoundShare is delivering those results. I suppose some area of concern is Europe.

and indeed international expansion. That's going to be the catalyst that maybe does start to have people going, oh yeah, it should be worth 56 times its 2026 revenue. When are we going to get that international edge in the same way that they dominated the US?

Well, Alex Karp has said this many times, and he said this on the earnings call yesterday. Europe is in a crisis. They are not going to survive, at least their biggest companies in the world are not going to survive unless they embrace the AI revolution. We are seeing US commercial CAGR at 71% for PoundShare. That is because the United States is embracing the AI revolution. Alex Karp also said yesterday that governments across the world outside of Europe are starting to increase their, at least, inquisition of PoundShare software offerings as well. PoundShare recently just signed a massive NATO contract for their Maven platform.

I think that we are going to start to see a growth spurt, an S-curve in Europe. It might take some time because there are still cultural differences, but eventually I think that's going to come through. And when that does come through, I think that's going to be another catalyst for Palantir. Ultimately, we've already seen resilience shown with U.S. government contracts in the face of Doge. But is there anything that gives you any skepticism about perhaps a pullback in spending from that side?

Not really. I mean, look, it was funny in February when there was a Pentagon headline that said the Pentagon's going to be cutting defense spending. And as a result, Pounder was down 10%. I think more realistically, if the government is going to become more efficient with their spend, you need to efficiently allocate that spend. I mean, this is one of the most logical things that Karp and Shamsankar, the CTO, have been talking about for a while. And so if we need a better allocation of capital...

to get more transformative results. I would imagine Doge would be a massive tailwind for Palantir versus a headwind. And as a result, I think that's why it's commanding its premium. In terms of the stock being down 15% right now, this is a stock that was up 70% from the lows in April. It's a stock that is up well above 10X from the lows of 2022 when majority of people like myself

actually took a chance on Alex Karp when Wall Street decided that he was crazy. So from that perspective, stocks go up and down. I think this is a reaction to numbers that maybe weren't as good as what the street wanted. But the quarter itself was phenomenal in terms of the actual business growth. They beat, they raised for the full year as well. And you're right, the stock is still up more than 42% over the course of the year. It's still basically the best performing tech stock throughout what has been a

a pretty, shall we say, volatile state of trade. Is, from your perspective, going more broadly, this the name that the retail community still wants to be number one? Where else has retail been starting to put their bets when it comes to a tech ecosystem?

Yeah, I think it's Palantir. I think Alex Karp, when he speaks, people listen. I did philosophy and debate when I was in high school, and I was a nationally competitive debater. I was one of the top three speakers in Europe, top seven debaters in the United States. When I discovered Palantir back in 2021, and I saw on their website that they refer to their data infrastructure as an ontology.

And ontology is a philosophical word. Dr. Karp has a PhD in philosophy. Dr. Karp wrote a book called The Technological Republic. It was a number one Times New York bestseller. When you talk about retail and what captures their interest, what captured my interest was this guy who did not care what anyone said. He was going to be himself. He was going to say his political beliefs regardless of what happened to the company. He had a backbone.

is what I'm trying to say. And I think because Palantir is a backbone, I think because Alex Karp is ruthless about explaining what that mission is, that's why retail is attracted to the name and the growth is there to justify why retail wants to bet on a tech stock that is actually accelerating in the age of AI. Does retail want to bet on anything right now in this economic environment? What's the sentiment like more broadly, Amit?

Well, if you look at some of the JP Morgan data we got in April and May, May or April and March, March had $40 billion of net inflows from retail. April had about $42 billion of net inflows from retail. Hedge funds actually took down their positioning to the max seven, the lowest since 2023. And hedge funds, a global data of 3000 hedge funds showed that their short positioning on

on the broader S&P is at 2022 levels. So this is a new game of if retail is right on buying the dip and the tariff volatility is going to die down, which will allow valuations to become more mature, or if the hedge funds are going to be right. So far, we've recovered everything from the April lows. I mean, I could imagine the hedge funds saying, oh, we missed it. We got to get back in. And that creates even more FOMO and momentum. But retail has been buying the dip. And I think they will continue to buy the dip, especially on Palantir. See if they do today at the end of trade. Amit Kukreja, we thank you for your time, CEO of AK Media.

Now, shares of Tesla lower today as sales continue to slide across Europe for the month of April. This is despite the company rolling out an updated version of its popular Model Y SUV. Let's get out to Craig Trudell for more because many blamed basically the lack of a fresh item to be able to buy into, the fact that they had to put on ice in production. But now we get the tell that actually even with a new updated Model Y, people are still not buying. Yeah.

Yeah, that's right. I think that was, you know, kind of the big excuse that you could throw out in the first quarter was that we had this changeover for the Model Y that was going to inevitably lead to some lost production. And, you know, that sort of changeover is, you know, fairly common in the industry. It's maybe what was unique for Tesla is,

that the Model Y is just so important to the company, accounts for such a huge portion of their volume. And for them to have to take their production lines down at each of the factories where they make the Model Y, which is in all of their assembly plants around the globe, that is a big deal for them.

By the time March rolls around, you have the Model Y starting to spool back up and deliveries of that refreshed Model Y starting in early March. And so getting into April for sales to be

This dramatically down is a troubling sign if you're a Tesla investor. Dramatic to say the least. Sweden off by 81%. UK off by 62%. What real numbers are we talking here? How few cars are being purchased?

So in the UK, it was just over 500 units that they moved. So this is a really dramatic drop for the company. I think this is a case here in Europe where you still see very patchy take-up of electric vehicles, right? Where some smaller markets, you have a huge take-up. I would point to Norway being this sort of bright example to the positive.

But in other markets, EVs are taking quite a while to accelerate. And Germany and the UK have sort of traded places in terms of being far and away the biggest within Europe. And for those countries to be included among some of these countries where we're seeing really dramatic declines is troubling because that's where all the volume is in this region. And the elephant in the room is...

Musk's political reputation thus far in Europe? That's what's crimping demand? I think that's something that's very much what is sort of top of mind for people following these developments is how much is he hurting the brand's standing? Because I think another important bit of context is the European market is just a heck of a lot more competitive than the U.S. is, where

A lot of European companies were bracing for this year being a much tougher compliance year. CO2 regulations were scheduled to take this another sort of step up where you had to meet a lower CO2 standard for your fleet.

It looks like the manufacturers are going to get some relief on that front, but it's sort of already the case that we're seeing the fruits of all the efforts of trying to meet those numbers. So a lot of product has come to market. You have Chinese companies coming to market even in spite of tariffs. So Tesla has a lot more competition than they have elsewhere in the world. We thank you so much on all things Tesla. Now, breaking news, we do see President Trump welcoming to the White House

Of course, the new leader of Canada, Mark Carney, it was but a week after he won the national election, promising voters he is the man to guide Canada through the economic turmoil of the trade war, protect the company against aggression from the White House as they see it, exports in Canada plummeting, as it would seem, from the tariffs thus far. So currently have seen that continuation of dialogue between Mark Carney and President Trump.

But now let's return to the markets that are on tenterhooks because of trade, because of tariffs, because of what this very meeting wants to be delving into between the two leaders. And we have some earnings after the break as well to keep your eyes on. AMD, up by 1.5%, key chip maker. What will they say about AI demand? Can they too manage to shake off some of the anxiety as we saw with Microsoft and Meta last week? ARM also, chip designer, up by 0.4%. Watch it after the bell. From New York, this is Bluebeg Technology.

Hiscox Small Business Insurance knows there is no business like your business. Across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online quote at Hiscox.com. That's H-I-S-C-O-X dot com.

There's no business like small business. Hiscox Small Business Insurance. Time is precious, and so are our pets. So time with our pets is extra precious. That's why we started Dutch. Dutch provides 24-7 access to licensed vets with unlimited virtual visits and follow-ups for up to five pets. You can message a vet at any time and schedule a video visit the same day. Our vets can even prescribe medication for many ailments, and shipping is always free.

With Dutch, you'll get more time with your pets and year-round peace of mind when it comes to their vet care. You're listening to an iHeart Podcast. ♪