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tv   Bloomberg Technology  Bloomberg  July 23, 2021 5:00pm-6:00pm EDT

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>> from the heart of our innovation collides, in silicon valley and beyond, this is bloomberg technology with emily chang. anchor: emily: i am emily chang in san
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francisco and this is lumbar technology intel ceo says the chip shortage will wind her for a couple of years but we are in for a decade of growth. i will ask hana how he is winning business back from amazon and alphabet. twitter shares rally on the best revenue growth in years. jack dorsey says bitcoin will be a big part of twitter's future. i asked twitter cfo on how he sees crypto being integrated into the platform. primus or spain taps into the energy of the u.s. tech ecosystem and bring some of it back home. the prime minister's out of a meeting with tim cook. we will see what was on the agenda. all of that in a moment. but us get a look at the market s. what an end to the week.
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what are you watching? reporter: we started the week with all those variant concerns. not really evolving at the end of the week. a similar story. we start the day with a lot of rot market gains but evolving into a tech outperformance kind of day. s&p 500 down 1%. stocks drifting higher. a lot of that was responsible. tech was responsible for the nasdaq being up. what didn't do so well are those chinese adrs. chinese tech having their worst day since 2008. a plunge of 9% in one session. you see a little bit of money heading into treasuries. we can see money heading into semiconductors as well. you are starting to see that global chip shortage also those stocks a little bit of lost momentum here. they're still up quite a bit. the question is, can they continue to go higher,
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especially into next week? that is when we expect that tech outperformance. there is one chipmaker stock in particular. we covered earnings last night. their data center was really lagging. it was weighing on concerns for a lot of investors. shares down 4% on a three day basis. as quite the plunge. a lot of investors are expecting that outperformance to continue into next week. maybe, just maybe, they can redeem themselves. emily: we will keep our eye on that. as she mentioned, investors still cautious on intel after the forecast fell short on expectations. earlier, my colleague and i spoke about his outlook, the chip shortage and winning is this back amongst stiffer competition. >> we had great performance in that area. well above the analyst
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expectation. we see growth in that area so cyclically, we have gone to the cloud build of inventory and that has been consumed. we are seeing the cloud guys rebuilding demand. we see that continuing into the second half. we're are seeing the adjacencies. areas like 5g being very strong areas for us. collectively, we are seeing that momentum starting to rebuild. our product line is getting stronger. we talk about our next generation. it is ramping up very well. it is a highly competitive part. the competitiveness of the parts is getting better. the momentum is getting better. our execution for the long-term is getting better. we are feeling more optimistic than those reports might indicate. q2 was a great indicator of that and our god for the rest of the year.
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emily: i know your relationships are key and you work hard on building those. how are they responding to you? >> we really want intel to be back but can be rebuilt that confidence? it is building. they are seeing that shift in our focused -- focus. we are on site working with their teams. improvements on the roadmap. overall, we are optimistic in that regard. like for our foundry service, we announce that we have one of our major customers as one of the big cloud guys. we will talk more about that next week. i am seeing very positive movement in that area of our business. given my relationship with those individuals many decades long at
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this point. we can build on that long-term relationship. the renewal of our execution and a shared view of what we can do in the future. emily: how much will it cost to get intel back to that leadership position that you are optimistic about? there these companies building stronger chips and your margins are lower than what they were. how do we get back to that 60% that a lot of investors are used to? >> they are lower in the second half of the year. we are bring on new factories that are yet to be depreciated. that is a normal cycle in the business as we bring on the cost at scale. it is very typical and they built up in the longer term. overall, we feel comfortable with the margin profile for the
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business to return to levels that the industry might expect. this is normal cycles. i would say that we are investing for long-term leadership and we are not apologetic about that. we are committed to being a growth company that leading in technology. emily: i wonder how much that is adding to your optimism about the foundry business. and taking on t smc? >> it certainly is a factor. give me one more way there is this clear search for supply in the industry it is a bit of a tailwind. there are very few companies that can do reading edge technology. they are looking at us quite aggressively that way. this rapid buildup of new capacity takes time. building a new fab from scratch
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is a 3-4 year exercise to have it built. all of that view of a cycle of significant demand, and as i've said, we are in for a decade of good semiconductor characteristics. every aspect of human existence is going digital paired everything digital need semiconductors. when you look underneath that, this will be a good cycle for semiconductors. we now have over 100 customer engagements that are active today. we are seeing a lot of interest in our capabilities because it is leading edge capabilities. it is unquestioned leadership and un-packaging technologies. the richest ip libraries in the history. a strong top-down commitment from my leadership team and i. we will get more updates on this on monday. i look forward to chatting with you after our updates on monday. emily: they're all different
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kinds of chips. which chips come back sooner and what kinds will take the longest to come out of this shortage? >> the ones that are most challenging are those older nodes as they would you describe. the problem there is that demand goes up but we are not building those factories anymore. these might be 10-20 sometimes even 30-year-old technology. they run long and efficiently but to capitalize anyone for a 20-year-old technology doesn't make a lot of business sense. sometimes, the equipment vendors don't bow that equipment anymore. the most acute shortages have been on those older nodes. now you're left with the dilemma, do i keep building capacity for older nodes or do i move those designs forward to more modern notes? clearly, the economics of tilting trailing edge capacity versus moving the designs forward. if we look inside the ships act as well -- one example, there is
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specific funding to modernize design as well as building very old and essentially, unfeasible he financially returns on older capacity. that has been the issue. we see shortages across all of the types but that has been the biggest problem is these older nodes. emily: you're speaking to this idea that the pc market will continue to grow in the next year. one of other folks say this is unsustainable. we have seen in the debacle not keep up. what are they not seeing that you are? >> first would be that we are just seeing this view that the pc penetration as we call it is continuing as we go into the future. almost every workplace, as there saying come back to work, it will be hybrid work. this idea that if i need multiple pcs at home and kids
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are doing more education and online activities, more help from home, will cpc penetration to continue to be strong even as we move through the covid issues. we see a powerful refresh cycle coming up. we have aging pcs, the move to laptops, new windows 11 from microsoft always ushers in an upgrade cycle. with windows 11, there are new security capabilities that need new hardware. this will always be good for pc cycles. we also see the market brought in. as a go to second and third tier markets where the pc right only be one or two per hundred kids in these markets, we are seeing those growth rates continue. as the gdp's of the world start to recover and growth is occurring there. those three factors are what leads us to depths of belief or
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validated us with our channel partners, all of our oem partners that not only is the pc market over one million units a day, that will increase in 22 and beyond. we are getting more and more consensus for that even though there are naysayers in the marketplace. we think intel got this one right. we are building the capacity and the supply chains to satisfy that. emily: that was the intel ceo. don't forget, it is a who's who list of companies reporting. we will kick it off with tesla monday, apple, alphabet, on tuesday. paypal and facebook on wednesday. we wrapped the week up with amazon on thursday. next, we will stay with this week's earnings and snap the nagging back. reporting a strong quarter in digital e-commerce. can it sustain the gains? let us not forget what happened
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earlier this week with jeff bezos and three others landed safely after blue origin's first flight to space with passengers on board. i will never forget it. bloomberg brings you a special program called space race that looks into the future of the space industry, gluing tourism. that is 7:00 p.m. wall street time, 4:00 p.m. on the west coast. this is bloomberg. ♪
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emily: snap share it surging to a blowout second order guidance coming ahead of analyst expectations, making it a topic.
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for more, this took the market by surprise. what was so positive here about snaps results? >> so far, what we have seen, all these companies, snap, twitter, they had the engagement but lacked monetization. what this proved was the pandemic accelerate the trends, e-commerce, online gaming, and all these companies need consumers so they are coming to these platforms to basically find those new customers. that is what is driving the ad pricing we saw for both snap and twitter. we think really, this is a multi-quarter trend in terms of at inventory being more valuable to advertisers. anybody in the e-commerce around, if they have to find customers, it will advertise on these platforms. that is what we are seeing with snap, twitter.
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you will see it and was -- and facebook as well next week. emily: snap is reaching eight younger audience that even other platforms like twitter cannot reach. can they keep it up? how much can this audience growth? >> our view is that they have hit user growth when it comes to the daily active user growth which is a key metric. in their case, their daily active users is close to 90 million in north america. twitter is around 37 million, just to show the gap. as long as they can keep the engagement high is the hard thing. your catering to 15-25-year-olds, loyalty is low. we saw that with tiktok coming onto the scene. they gained users quickly. if snap can keep the engagement, advertisers will continue to spend money, marketing dollars on their platform.
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their lead in augmented reality. that is a big source of differentiation when it comes to what snap is doing and the relevance and e-commerce. that could be a driver of spending on their platform. emily: if that is the case, what do you think defines the next year snap? post-pandemic, we hope, out of lockdown, lots of other things, competing for young people's attention? >> they are pushing into e-commerce. i think you will see a lot more transaction. advertising will do well but snap will become a source of commerce and that will be a think with the chinese companies, social media and e-commerce have converged. that is what we will see going forward. emily: all right, we appreciate your insights. thank you. coming up, what is old is new,
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at least in fashion. how gen z is vitalizing to secondhand shopping market and why they are betting big on the younger generation to do it. our discussion with the ceo is next. the prime minister of spain is in town. he will join me here at fresh out of meeting with tech ceos, including tim cook. pedro sanchez, right here later this hour. this is bloomberg. ♪
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emily: amazon has hired an outside firm to investigate toxic behavior. this comes from internal commission that says there is systemic harassment, bias, bullying against women and underrepresented groups. he became the ceo a couple months ago from andy jassy.
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he told employees in an email they are committed to ensuring the work waste is inclusive, free of bias and unfair treatment. we will keep following that one. . the future of fashion looks like used clouds. we have gen z and the pandemic to think about -- think about that. 30 million customers have bought secondhand clothes for the first time point last year. it is expected to double in the next five years. the trend is a good one for our wallets and the planet. let's bring in thread up ceo and cofounder. great to have you with us. talk about the boom in secondhand clothing. what is driving this? what are you seeing? >> there is a generational shift happening among young people. whether it is vacation they're taking, cars their driving,
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consumer preferences are changing. they're moving into secondhand. it provides great value. it allows folks to find unique items and it is really fun. i think that is driving this momentum and that was true during the pandemic. emily: you just released a resell report and you say this will continue post-pandemic. how confident are you in that and what will drive that trend? is it gen z alone? >> what is really driving the trend is how many new suppliers. how many sellers are coming into the market. we look at the number of people who say i am interested in getting rid of things i'd know -- no longer where. that number is massive. what -- wear. on the buy side, when you have great supply, great brands, at great prices, you can attract
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buyers. we think demand will follow. high-quality supply. that is where thread up differentiates itself on making it easier for consumers to give up that supply and think that's why we see a lot of confidence in the market. emily: i sold on thread up, i've seen things on thread up, it feels good when you know it is going to someone who will enjoy it and when you know you're getting something special that somebody else loved, essentially. you think secondhand sales will beat fast fashion in sales? it is taking sustainability in a different direction. it is worse for the environment. >> it is something i'm concerned personally about. as a company and for our kids and the planet. we take a closer look at fast fashion and the implications it has. across the globe, frankly. i like to believe that it brands and retailers can produce clothing at higher wally and we can build a great resale market
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for them, ultimately, that is a brighter future for clothing supply chains. it is a better future for customers. i am bullish on this evolution of consumer behavior and i think retailers and brands will follow where the consumer is going. that gives up a lot of confidence that fast fashion, reset will be faster than fast fashion over time. emily: what do brands and retailers have to do to develop a strategy for resale? to they have to think at the very beginning of design and production that, ideally, this will be passed down? >> what is interesting is that that is already happening. all of the world, they are thinking of their supply chains not in the linear way where things get produced and they get sold and worn, and put into a landfill. i think most brands are thinking about the loop and where we want
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to help them is let us be a part of your secular strategy. i think most important thing is that is change in the last two years. the conversation for the brands and retailers is that we have to think about the loop. we had think about being more secular. i think that is coming. you're right, it will touch every part of the supply chain and it will be a big transformation. i think it is the only path forward for fashion to become more sustainable. emily: something we will continue to follow. thank you so much for joining us. coming up, the return of the advertisers. twitter reports better-than-expected ad revenue as the world and businesses start to open back up. i will sit down with the twitter cfo up next. this is bloomberg. ♪
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♪ emily: welcome back to "bloomberg technology." let's get a look at how markets rounded up the week. >> we have been talking about how big tech has been outperforming. it lets look at social media stocks. this is the social media index that takes into account social media not just here in the u.s. but around the world. since the advertising glut last year, we are seeing that
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anticipation that advertising will come back. then, losing momentum earlier this year and trading sideways. given that, it is noticeable when the likes of snapchat have these blowout earnings. you start to see that there is going to be a clear differentiation. one month, shares were dropping. then, today massive surge. 18% gains in those shares. it's important to keep in mind that this brought about what a lot of analysts say this company is the top for digital advertising. some of that fell into twitter as well. this is a five day chart. a little bit of anticipation baked into the stock as we went into the earnings this week. today surging, making an 8% gain on the week for twitter.
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emily: thank you so much for that update. twitter shares ending the day up after reporting the strongest revenue growth in years. i began by asking their ceo ned segal how well twitter is holding onto users. ned: we had a strong quarter. we grew our audience 11% year-over-year. we added 20 million people to twitter. we have noticed that the people who came to twitter around the time --
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emily: i am curious, what does this mean for the long term? is it impacting your ability to show direct response ads?
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that means decentralizing our workforce. we want people to work where their most productive. we want people to be able to tip across borders. we want them to pay twitter and pay creators for the premium features that we will offer. as we learn more and about these, we will learn more about how value is exchanged as a
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learning opportunity. emily: this new scription service, it is early days. do you see this being a small complement to all the revenue you are already bringing in, or will this be a big revenue driver? ned: over time, we want subscriptions to be a big part of our company. advertising is firing on all cylinders. we had a great quarter across geographies, across verticals. ford when they launched their electric version of the f-150, they had over one billion impressions. the streamers grew their spend on twitter 40% talking about their shows and service. when you take that advertising business and combined it with the subscription opportunity.
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not just in straw you and canada, but other price points. some from creators, some from twitter, we think there is big opportunity over time. emmett -- >> optimism about next week's
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earnings. tesla is monday. pay paul -- paypal and qualcomm on wednesday. plenty more still ahead. the prime minister of spain is with us. you don't want to miss it. this is bloomberg.
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emily: let's look at other headlines. china may ask companies that offer tutoring to go nonprofit. that could decimate the country's industry. the firms would no longer be
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allowed to raise capital or go public and those that have already listed may no longer be able to invest in or education firms. an ipo is india's biggest since march 2020. it is the first of a generation to tap the country's capital markets and has generated a frenzy among the local investment community. gm is recalling chevy volt vehicles for the second time in less than a year. after two vehicles that were repaired in a previous recall caught fire. the recall affects 69,000 cars that have batteries made by a south korean company. coming up next, my interview with the prime minister of spain. we will talk about his efforts to attract startups in tech to
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his country and about his meeting today with apple ceo tim cook. this is bloomberg. ♪
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emily: the spanish prime minister is here in silicon valley to transform his country into a violent -- vibrant tech ecosystem. he just wrapped up a meeting with the ceos of intel, qualcomm, linked in, and he sat down with tim cook one-on-one apple headquarters. he is joining us now from palo alto. i have to ask about your meeting with tim cook.
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what did you discuss? tell us about the specific initiatives on the agenda. >> i think that it is important nowadays have these direct conversations between the public administration and the private sector. so far, what i think the companies appreciate from the spanish government is that we have a vision we have to attain and we want to get them involved in the long-term transformation and modernization of my country. emily: your meeting with folks from apple, qualcomm, paypal, zoom, intel. what did you learn from them that you want to take back to spain? what did they want to learn from you? >> they appreciate these direct conversations between the public and private sector. it is crucial to have a
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partnership in order to face these huge challenges in society. secondly, i also explained in the aftermath of the pandemic, we are about to begin this huge modernization of the spanish economy and we are looking forward to have the u.s. investors and companies to join us. i explained the eu funds that we are going to receive in spain. $162 million. 42% will be devoted to the ecological transition. secondly, about 20% of the funds will be devoted to -- there is a connection between green and digital and a lot of opportunities for the u.s. companies in spain in the future. emily: when you think of a
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company like apple, did tim cook indicate wanting to expand into spain? >> regarding the 28% of the funds that will be devoted to digitalization, we are going to expand a lot of investment on artificial intelligence. apple is very engaged on artificial intelligence in my country. we are eager to have -- to convert spain into digital hub and apple tv is welcome to join us in this initiative. in the end, our aim is for spain to become leaders in cybersecurity, artificial intelligence, and quantum
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computing and of course all related to new technologies. we are also just forming our educational system. we are transforming our vocational training system in order to closely match the needs of talents that these companies have and the qualifications that we can provide from my country to these i.t. companies. i think that the conversations were very positive and we are looking forward to having them on board in this huge transformation we are facing in spain. emily: meantime, two of spain's most exciting startups recently decided to list publicly elsewhere. one in amsterdam, another in new york. how do you make sure that spain has the right infrastructure so
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these companies can go public at home? >> spain is leading the cyber network. we want to lead the i.t. network in spain and europe. we need to create that talent in spain, which is why it's so important that all the revolution of our educational system and vocational training. what we witnessed this year is the massive investment on startup. 2.1 billion euros during this year for startups. that is why we considered and we presented a new law on startup that would reduce dramatically the taxation also yurok receipt. we created a specific base for
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digital nomads. we are also resolving the insolvency law to create a second chance for entrepreneurs. in the end, what we're trying to do is create an ecosystem which will allow the startups to grow in my country. last monday, we created for the first time in europe a fund in order to allow startups to scale up in the short-term. it will be 4 billion euros. 2 billion coming from the public sector and 4 billion coming from the private sector. we have many opportunities for foreign investors and this is one of our major goals. emily: volkswagen recently
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unveiled plans to make batteries in spain. are you talking to any other companies about this? did election vehicles come up in your conversation with tim cook? >> absolutely. one of the main assets that the spanish plan has is that our policies -- that is why i mentioned the interconnection between the digital and green. that is why in our climate goal, we are so committed and milestones are so demanding. we're expecting by the year 2030 to have 74% of our electricity consumption coming from renewable sources. that is why also we are going to devote at least 2 billion euros on green energy.
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for example, green hydrogen. of course we are going to devote a lot of resources on digitalization but also there is a huge opportunity for digital companies to join us on climate and these green investments that we are now developing in spain. emily: speaking of energy, a lot of our viewers are very focused on ifn's purchase of a 23% stake in natter g energy. one of your big utilities. i am curious what your feelings are about that? are you concerned about foreign investors having a significant stake in a strategic company? can you give us an indication of how you are leaning on this and when we can get an expected decision? >> i am here and palo alto in the u.s. precisely trying to attract foreign investors to spain.
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we are an open country. spain is the second economy in the eu in terms of openness to foreign investors. this is a clear commitment from my side. the other thing is that we have to study the dossier. it is important to guarantee that spain is an open economy and we are welcoming of four and investors. -- foreign investors. emily: while you are visiting, the pandemic is still raging. there are concerns about the delta variant. you are putting new restrictions in place. i wonder are you concerned that a resurgence of covid is going to hinder your efforts to reopen the economy? to revitalize the tech economy given that things don't seem to be getting better in many parts the world.
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>> what happens in spain is very important, very positive which is that we don't sign any kind of rejection from our population regarding vaccine. this week, we will reach 52% of the total population that is fully vaccinated. we expect before the end of the summer to have 70% of our population fully vaccinated. we are now starting to vaccinate the youth because we focused in the beginning of the vaccination campaign on the people older and most vulnerable to covid. we are a new phase in our fight against covid and thanks to vaccines and the vaccination campaign and thanks mainly to
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our population, we are speeding up day by day our vaccination campaign. we are very positive and very optimistic about the situation that we will face regarding covid in september. one thing that i am really proud of in spain is during this last academic year, we kept open 99.5% of our classrooms. this was something incredible because compared to other countries, unfortunately they had to close schools but we kept our schools open by 99.5% during the last academic year. i am so proud of it. emily: as a mother of four, that is interesting to hear. i appreciate your vaccination
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rates. that is impressive. you mentioned that apple is investing in artificial intelligence in the country. i am curious if you can share any more information about apple strategy in spain. they have huge presence across europe. what more should we expect to see from apple in your country? >> we expect to have an increase investment of apple and spain in the coming years. first of all artificial intelligence. we are converting spain and apple tv will be in spain.
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the insights and the feelings that i got is that they count on spain, they see that spain is a safe country with a good quality of life and affordable and competitive -- and prices. we have a good opportunity for both for the spanish government for my country and with these foreign investors and companies. and also my country is committed with gender equality, diversity, and we are focused regarding this new education system with stem for girls and women. we are an open country and we are looking forward to having these synergies with the u.s. investors and companies. emily: wonderful to hear where your priorities are. welcome to silicon valley.
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hope you enjoy your trip. thank you for joining us. that does it for this edition of "bloomberg technology." wall street week is coming up next. you don't want to miss it. this is bloomberg. ♪
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david: strong earnings. we continue on our upward path. this is "wall street week." this week, the future of cryptocurrency. >> i don't know if it's like a form of modern art that in the year 2100, you will go to a star trek convention and by assigned -- signed d more poster. -- leonard nimoy poster. david: the story of netflix and why it's different from so ma


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