>> 30 minutes into the u.s. trading day on this tuesday, january 30. here are the top stories we are following. alphabet and microsoft take the stage kicking off a mega week of earnings. private stocks near their records. that's ahead of the fed. the central banks today meeting kicks off ahead of the rate decision. we will pray the cash preview what to expect as that economic data continues to surprise. general motors cruising higher after last year's strike and ghosting its outlook.

mary barra joins in a bit. katie: welcome to bloomberg markets. you take a look at what we're doing on the s&p 500 and the answer is not much. we are down just about 1/10 of 1%. all the risk events it feels like her coming after the bell kicking off today. big tech ahead of that mega week we mentioned and not looking to rosie. the nasdaq 100 down about 3/10 of 1% but we are still near those all-time highs. i wanted to flash out that 10-year treasury yield. as we await the fed as well. currently we are pretty much unchanged, i will call that unchanged. you're still above 4%. we will see how that line moves. you look at the vix where we are

below 14, not a lot of volatility in this market. we see maybe some economic data because we have jolts data dropping right now. mike mckee is here to break it down. mike: the number of job openings went up during the month of december, 9 million -- from 8,925,000. the forecast was we would see a drop in job openings. the quits rate is little changed. still a 2.2%. the number is down about 100,000 from november. the other number out is a real surprise. the conference board consumer confidence number rises to 114.8 from 108, revised 108. listen to this, conference board's present situation index

was 147 .2. it rises 161.3. americans very happy with the way things are going right now. the expectations number comes in at 83.8 from 81.9. really significant change in consumer confidence that matches what we saw from the university of michigan last week. this is the highest consumer confidence for the present situation since march of 2020 so just when the pandemic was getting going was the last time we felt this good about how things are heading in the u.s. economy. they have to be cheering this at 1600 pennsylvania avenue. katie: you have stocks down the touch. take a look at two year treasury yields up one hair. how does this affect the conversation and the fed's

messaging around a potential march cut? mike: we got the headline the fed has started its meeting. it's probably not going to make a huge amount of difference but it may make a difference on friday when we get the jobs report. the more jobs number drops the fewer jobs number also drops. more people say it is the same so if you are putting the numbers in from the conference board in your employment forecast over the next six months, you are seeing a decline. a big jump to 45.5 from 40.4. katie: mike, a lot to look forward to there. appreciate your instant analysis. let's get back to those markets because it is a big week. here to help break it down is

the portfolio manager at amcore in visors. david, i will steal a question for myself i asked at the top of the show yesterday. we have the fed and eco-data, what will you be watching most closely? david: a little something for everybody. it will be one part the fed, it's always going to be two or three parts earnings and not just earnings but what companies are doing with their cash flow of growth and their dividend growth to return it to shareholders and the story continues to be very good but we will see cash flow dividend growth in the high single digit to double digit in calendar year 2024. it is simply more steady than the topsy-turvy earnings growth and there is less monkey business that happens in the cash flow statements than the income statement and alike when companies return dividends to shareholders. i feel pretty good about it.

katie: to go through that. we have one part the fed, two to three parts earnings. is it just a dash of eco-data or is it that second tier? david: it's going to be important. 30% m2 growth slows to -5%. still to be determined how it will turn out in the economy. companies have been able to create shareholder value by locking in low interest rates two years ago. more fixed-rate than floating-rate debt. and importantly small-cap stocks. they are growing the dividend and generating free cash flow margins above the average of around 11% or 12%. that's what i'm going to hang my hat on when i think about the ability to create returns in 2024 to the investor.

katie: i want to wrap that thought into the conversation around big tech. in addition to ai and the promise that comes along, one of the narratives that emerged was you take a look at the cash piles of some of the big tech behemoths, you think about how a company like amazon for example is probably going to make money in any economic cycle. how much of a premium do you think that is worth in the market? david: it is still there but it is deteriorating. if you value the big tech on a free cash flow basis they are not as appealing as they were at the end of 2022 relative to the very healthy free cash flow margin in the mid 20% to 30% range which is well above the overall market. what you likely see in 2024 is it is a good story but deteriorating and it will continue to deteriorate in 2025. i think incrementally you need

to be very selective in big tech. what you are going to own and what you need to take profits out of and move forward. the advantage is not as robust from a valuation margin standpoint as i saw in 2023. katie: it sounds like you're saying it's not necessarily risen to sell big tech. the road ahead isn't as rosy as the one behind us. david: take broadcom. we talk about the magnificent seven. i like to say it's really an elite eight. broadcom in the last two years has pretty much matched nvidia's price gains within a nickel or so but without the drama of 2022. broadcom has a valuation on parity with the s&p 500. a dividend growth rate of 15%, a good free cash flow margin and i think that's one of the big tech

names you can still own in a good proportion along with microsoft and apple. maybe less so to some of the other big tech that are not growing their dividends because they are not paying a dividend. katie: you think about in those big tech names you mentioned amazon for example famously does not offer a dividend. is that alone enough to not go overweight amazon here? david: perhaps just be more cautious because they do generate significant free cash return to the shareholder. not paying a dividend has rewarded the shareholder. it still deserves merit for amazon but as an investor who likes to see a capital out location that they are giving money back to the shareholder rather than keeping it for future gains, i would like to see companies like that store to pay a dividend and then grow it at a double-digit pace like a

microsoft or a broadcom. katie: we will have you back when they start paying that dividend. we will be back with you in a couple of minutes but let's take a quick look at what's moving within the markets now at the single stock level. emily sitting next to me. what are we looking at? emily: jetblue. last week we had southwest and alaska airlines and they talked about slowing growth and it seems like that's the same story for jetblue. their sales and earnings beat for the latest quarter but their first quarter revenue forecast was worse than expected. they see that declining 5% to 9% which was lower than estimates and they are weighing deeper cost cuts to return to profitability. there still some questions about that spirit airlines deal which they did not really address in the earnings but that stock is down 2%, as about 7.6% so coming back just a bit but still in the

red. >> this was the last quarterly report for robin hayes. he stepping down february 12 so jetblue under pressure. you have ups up there as well. >> the headline is they plan to cut 12,000 jobs and ask everyone to come back to the office but i was thinking most of the ups drivers were in the office the whole time, but there's a lot of focus on that. they also missed their estimates like jetblue with the 2020 for guidance on sales, but the ceo did say they could save $1 billion a year from that cost cutting measure of laying off 12,000 workers so it's always unfortunate when the company is saving money but they are cutting a lot of people. >> it's not enough to boost the stock here outside of the fundamentals even though shareholders typically like to see this big cost cuts. it's not helping ups out much.

gm is a different story. >> that stock is popping. it hit its highest intraday level in over six months. for the automaker they beat estimates for adjusted eps, the fourth quarter and the net sales also beat estimates. the ceo said in their earnings call that they aim to cut costs by $2 billion this year, they aim to sell at least 250,000 electric vehicles and will be reintroducing hybrids. i do not know if this happens every quarter but a lot of these companies even with gm the stock is higher talking about cutting costs. i'm not sure what it says about a growth slowdown but that is a theme of the event i'm seeing throughout these earnings reports. >> signed of the times when it comes to this economic cycle. stay tuned. general motors chair and ceo will be joining us shortly. a lot of questions about gm's

outlook and ev's. big tech earnings kick off after the bell with microsoft and alpha that. we will look at what is to come this week. this is bloomberg. ♪

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as a top-ten real estate manager, we harness the power of a 360° perspective, delivering local insights and global expertise across public and private equity and debt. our experienced team and vast network uncover compelling opportunities giving our clients an exclusive advantage. principal asset management. actively invested. katie: microsoft and alphabet kicking off tech earnings this week after the bell. later we continue with amazon and apple reporting on thursday. those five companies alone have a combined market value of over $10 trillion. so consequential to say the least. here to help break it down is mandeep singh of bloomberg intelligence preview made the

point sentiment around alphabet is so bad right now even though shares are close to their all-time highs. what gives? >> clearly everyone thinks search will get impacted by what we've seen with large language models. there's a good reason why search can be more expensive to run. think of the cost to run these models and what impact that could have on a company like alphabet that does 10 billion searches a day. 3 trillion searches in a year. they have a scale and if they have to change the model around doing search differently then it is a big trip but i still take -- think they have caught up in terms of developing a large language model. the release of gemini was a big deal. they have other pockets within alphabet that should be a strong quarter for them. cloud saw deceleration last time around. if they're able to deploy gemini well that should get into the cloud numbers. katie: you think about one of

the storylines of last year that microsoft's headstart in ai investments would help chip away from google's market share. is that happening? where are we? mandeep: we are early in terms of how large language models could disrupt search. what microsoft is doing is partnering with any option they can find. so llama is getting quite popular in terms of just being a viable alternative to chatgpt. microsoft also did the early partnership with openai and they have partnered with llama and deployed that. to go to whatsapp there is a meta-ai button. the real-time searches coming from being. think of large language models as ones that can do reasoning but for real-time searches you still need a search engine and that's where anyone who wants a real-time search has to go to

either google or microsoft being -- bing. katie: great to get some time with you today, good luck this week. let's go back now to david, the portfolio manager at angkor advisors. you own microsoft and apple in your portfolios. what will you be watching for this week? david: it will be the cloud growth, more commentary on ai, but what works for me is they are growing the dividend at 10%, they are free cash flow margin. very important metric is 30%. their valuation trades at a premium but not excessive relative to their future growth, i want to hear them continuing. continues to deliver to the shareholder and for an investor who means value i will trim it back and hope i'm wrong it keeps

going up paying attention to the valuation. >> i'm sensing a theme, you like dividends. noted. let's talk about how big some of these companies have gotten even with those dividends you like so much there was a note from j.p. morgan out this morning. you take a look at the share of the top 10 stocks on the msci usa index including the magnificent seven, all told that's risen to 29.3% share, that's just below the historic peak of 33.2% which occurred in june of 2000. i hear that comparison and i feel like i'm supposed to be scared by that stat or at least it is supposed to give me pause. how do you think about numbers like that and the magnitude of how big these companies are in mark -- are? david: i particularly like

growth in a dividend versus the yield. having lived through early 2000 it is reminiscent. simply because the calendar year changes doesn't mean we will get a meaningful rotation into value or small-cap. it's been underway since late october of last year. maybe it takes longer for some of the real tech stock names to not be the leaders but i think it's underway needing to be more selective and for a large cap portfolio manager why do you want to keep migrating and adding small caps within allocations. they will hit a good two to three year run where they will be the leaders, there valuation is only traded this cheap to large cap stocks. about 11% of the time so your entry point is still very good while i think you can have a

little bit of big tech but marginally moving into the small-cap area. katie: potential one to two year run to look forward to when it comes to the small caps. what's the catalyst? what wakes up the broader market to pay attention to these valuations? david: it's never one big bang but it is probably mostly its valuation, they are starting to see a momentum of retirement systems, investors adding to the small-cap marginally that on a first when we get the rest of the fourth-quarter earnings for small-cap we are likely to see the median small-cap company grow profits this year. 8% or better and that starts to come closer to the s&p 500. all that in aggregate makes small-cap trade more interesting as we look out for the next two years or even longer.

katie: going back to your cocktail for this week at least one part was the fed so let's go there. what are you expecting out of jerome powell tomorrow? david: the language will be the economy is good, the potential for higher probability of soft landing but you have to read between one name and start to think about the easing part. in the meantime it will be stabilization. we are in this monetary experiment. we've never lived through in 40 or 50 years money supply growth to 25 or 30% year on year, backing off to -5% year on year. we never had to experience that. the lags with money supply growth are imperfect. it still remains to be seen if we will get the soft landing or some kind of tempered recession. i do not rule that out. we want to hear what jerome powell has to say.

this is a monetary experiment i've never seen in my career. katie: does it truly matter to the markets whether those rate cuts start in march or may or june? david: they can be very impatient. i go back to the fed just keep delivering this 3% or lower inflation. all good things will come to that for companies and their ability to create shareholder value whether it sooner or later. less material to me it's probably in the works. katie: that is the portfolio manager over at angkor advisors. walking us through what will be a very consequential week, kicking off after the bell today. jonathan: joining us is the gm

ceo mary barra on the latest. the general motors chair and ceo talk to us now. a story to tell this morning. let's start with that story. what's underpinning these high profits for 2024? mary: if you look at the strong 2023 results we have very strong internal combustion engine sales and strong ev sales, but as we go into 24 we will build out that strength and think 24 can be a strong year because we are building more -- we have addressed that on track for the first by the middle of the year, that should be well behind us. that will allow us to build many more existing vehicles like the cadillac lyric and the gmc hummer ev. the silverado ev work truck. this we will be honoring the

chevy equinox ev along with a sierra ev so we have many new ev's coming out. it will be a strong year from an ev perspective as well. we've indicated in the second half of the year we expect the ev portfolio to be profit breaking. katie: there's been some set but -- jonathan: there've been some setbacks. recently a competitor had to cut the workforce. what do you think is behind the slowdown in ev growth more broadly over the last few quarters. mary: there is a slowdown of ev adaption. a transition of this magnitude was never good to be completely linear. one of the important things is continuing to build out and having purpose built ground out ev's that have all the performance requirements. as we grow in the ev market.

outside analysts expect this next year even the lowest is there will be an ev penetration of 10% versus this year of 7%. although it is slowing if we were to grow it would still be significant and a year for ev's and participating in that we are well positioned with a portfolio of purposeful ev's. >> you and i've talked about where this was going. moving from the internal combustion engine, and now we feel like there is an interim step. on the earnings call you entertain the idea. what's changed your mind? mary: as we are going through this transformation a lot has changed. a few years back when we made that statement i think we thought we would be farther along on the charging infrastructure across the entire country but i also think the regulatory environment has changed to be more stringent. we think now hybrids will play a role.

the technology has been deployed so we will apply it in north america at a time frame we think is important primarily from a regulatory environment. jonathan: how quickly can you get those cars to market given you said you have that technology ready to go? mary: we will be launching those vehicles, the hybrids in key segments of the portfolio but we haven't put significant plans out. 2024 is really the one to focus on ev production. we have seen since last september the lyric as we've been able to build more vehicles, demand keeps growing. we had a strong january that's matching december even with all the weather -- we have 100,000 renovations -- reservations we will fill between 24 and 25. when you think about new purpose built ev's we are in a different

position than some. if for some reason we don't see that materialize we have the flexibility which can build up ev. jonathan: is that something you can do in a quarter? something in the space of a year? how long does that take? jonathan: we are -- mary: we are not giving specific details on when those will go out. because we have such strong ev's right now there will be time later when we see hybrids play an important role in the regulatory environment. jonathan: i'm just trying to understand a little bit more. if ev's are really strong wire we entertaining hybrids? -- why are we entertaining hybrid? jonathan: we think there's an opportunity -- mary: if you think about it we are 7% this year getting all the way to 100%

there's going to be a lot of adoption and customers with use cases with a vehicle that has two propulsion systems and it -- and an internal combustion engine. a lot of this will get to a robust charging infrastructure. we are keeping our options open and we will look to what the market wants. we've seen demand up and down in the last few years. i don't think it will be a long-term stable growth either. jonathan: you've always been pragmatic. this talk about the situation with competition. elon musk said the chinese automakers will demolish global competition without tariffs. gm sold few -- fewer vehicles in china than the u.s. for the first time since 2009. how difficult is it to compete in china at the moment? mary: the china market is under tremendous change. as over 100 domestic ev

companies. many of them are not profitable. we are changing our business and we need to get more ev's out of the can complete -- that can compete. that is not sustainable for any company. we are positioning for where they have to be in a very different market with many more domestic ev competitors. we think there's a place in growth opportunity, it will be different than three or five years ago. jonathan: could you help us understand what that statement means? to evaluate your business on the ground in china? mary: we have to evaluate with how much the market is changing and the different competition we have to understand where can gm play and when. we have a very strong partner and so we will work with them together. we happen to make sure we have a strong business going forward.

that's getting ev's launched their and we are considering other products as well. more to come on the china story. we will make sure we set up a business with this time, market to succeed. jonathan: the statement from elon musk the chinese automakers will demolish global competition without tariffs. do you feel the same way? is that something the automakers of america need, we need to put the barriers up? jonathan: across the board when you look at how do you win in this business, beautifully designed products that meet customers need and have the right functionality and technology at a very competitive price point. that's why gm has been focused on taking cost to be more effective with our capital. that's what you need to do to win. you do need a level playing field. with that portfolio, if there's truly a level playing field we

have a strong portfolio and will do well. jonathan: higher by 6% or 7%. activist shareholders you have the expense in 2015, 2017 again. are you concerned about investors losing patience with some of the bets on the trend and ultimately the face of that again or do you think they ever return announced with a better outlook will keep those people away? mary: again we have had to run the business well. last year we had some disappointments and i think that created some cause for concern as well as some challenges, we are addressing both of them. i think this will be a breakout year and we will demonstrate that. we have taken the steps necessary in the underlying technology and autonomous technology is strong grade we are revising a plan that will work closely with local, state

and federal regulators as well as first responders. just let me say from an autonomous perspective the benefits of autonomous our safety. looking at saving lives. when you look at some of the latest statistics showing 90% of fatalities on the roads are caused by human error. this holds great promise for safer travel. we will be measuring we will generate returns on. it's hours to execute. katie: we appreciate your time here at bloomberg, thank you for being with us. mary barra. i will throw it back to you, katie. katie: that is of course jonathan ferro with the gm ceo. for more on gm we are joined by david. really interesting interview there. a lot of focus on the push into hybrid models reintroducing into the gm lineup. david: i think this pivot has

been coming for a few years now. toyota and hyundai and kia have shown the hybrid electric vehicles. consumers worried about charging and they are not quite ready to make the push. telling us consumers are interested in electric vehicles. it hasn't been seen, as long as there isn't they are not willing to go. consumers are happy with the gasoline powered vehicle. all that means is it will be tougher to make that stretch. in order to meet fuel economy regulations and some of the segments these gm competitors are selling in. katie: maybe hybrids here are a bit of a steppingstone, a gateway drug if you want to call it. i heard the comments that push back of the hybrids really driven by regulations, lack of charging. it feels like gm and the traditional legacy automakers

that that range anxiety is real among consumers still. david: it is and there is this aspect where people drive around and there's a gas station around every corner. there are chargers out there but consumers don't know where they are. they are often at hotels, tourist destinations, retail locations. or in parking garages but it is not obvious where they are. we need more of them out on the highway system, but they also want to know they will be able to charge when they get to their destination. people just have not done the homework on that and why should they? it's up to the industry to tell people if you buy this you are not going to be stranded because here's where and how you will charge. katie: i park my car in a garage that parts hundreds of cars. this is in a city that there is one charger. i don't think the math quite works out. let's go through some of the other headlines.

mary barra telling us intense competition with china is not sustainable. this comes on the heels of elon musk's comment about some of the chinese ev makers pray how big of a threat is that for the likes of gm? david: in china the ev makers and the companies there, they make a lot of readings. gm does ok there. they sell quite a few of them. it is a big threat to cadillac, buick and chevrolet. i think what elon musk might also be talking about is if those vehicles come to the u.s. that would be really tougher for domestic car companies, but there are various, a part of it is jobs and having those vehicles for u.s. safety and environmental regulations. all that can be done. it takes time and investment for

these companies so there are let's call them government and regulatory barriers. that's keeping them out of the moment. long-term who knows. they could end up selling vehicles in the u.s.. katie: great stuff as usual. that is bloomberg's david welch. currently on about 6%. a good day for gm and let's look at the broader markets as well with abigail doolittle. abigail: small declines at this point for the major averages. the s&p 500 down less than 1%. the russell 2000 down more in between down about 1.1%. what stands out is on the year, the s&p 500 up about 3%. the nasdaq 100 as well. we continue to have these divergences in an overall up year and driving some of those gains is big tech. after the bell we will have

alphabet and microsoft report, over the last year take a look at that index, a up 81%. last year it had been up almost 100% so big gains for the mega to -- meg cap tech indexes. can the party continue. of course that will come down to some of the growth estimates. it's interesting because we use to use these as big growth stocks, now not so much. meta is respectable on the top line 22% growth. microsoft 16%. apple barely growing at all. alphabet negative, it will be interesting whether these companies can meet the estimates for the rest of 2024. katie: a lot of existential questions about what is growth. bloomberg's abigail doolittle, thank you so much. a growing demand for high-end chips. we will hear from chris miller

about how big tech companies are getting involved. this is bloomberg. ♪ how am i going to find a doctor when i'm hallucinating? what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know.

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katie: chips are the center of ai. of course governments want a piece of it is competition between the u.s. and china heats up. expect to announce billions of dollars in grants to semiconductor companies by the end of next month. david westin asks chris miller about that demand. chris: the boom in investment in artificial intelligence has impacted the chip industry, there is a shortage of the types of chips used to train ai systems even the biggest

companies in the world cannot get enough of these specialized ai chips in part because of this. all the world's governments are pouring tens of billions of dollars into their own chip industries trying to make sure they have the competitive ability to stay up with regard to these chipmaking capabilities that are needed for ai chips. david: an important driver is this move to generative ai and the demand for high-end chips. some of the big tech players in the united states saying they want to vertically integrate and sell their own chips. not all of them necessarily but enough. we are from microsoft and amazon alphabet. what is their capacity that they could step up to the bar and make a substantial difference? chris: we see these companies already making a difference. google has a chip which has been producing for some time. many of its own ai models are

already trained on this chip. amazon and microsoft are somewhat less developed but still have their own chips that you can use in data centers. openai is considering building out its own network of chip factories. ai requires tons of computing power which means tons of investment numbers. right now there are a couple of companies. nvidia the most important that can reduce these advanced chips for ai. it's not a surprise whether you're microsoft or amazon or google you want more sources of supply for these ultra critical chips. david: what's the gaining factor? what's keeping others from doing it? is it intellectual property, know-how, what keeps them from this? chris: in videos core advantage is its ecosystem. most of the advanced ai systems have been developed in the

nvidia ecosystem. there is a software ecosystem this been built out around that. ai engineers are most familiar working with nvidia chips. just like half a century ago where no one got fired for buying ibm computers for mainframes, the same is true for nvidia today. if you have to make a choice the default choice is nvidia because the system is larger and the number of experts trained on its systems is much more substantial. it's not that other companies cannot compete in terms of the pure technology but the ecosystem effects in other parts of the technology stock are very strong. that's why nvidia has managed to make hay with this market share so far. david: does that mean for microsoft or google they have to develop their own ecosystem to compete? chris: we see companies like amd trying right now to build out that ecosystem. i think one of the key challenges they are facing is

whether it can build out and ecosystem that is as competitive as nvidia's. we see in china were companies can access these chips huawei is in the process of building out its own ai chip ecosystem. nvidia has been spending well over a decade attracting developers to build out its systems and training a large cohort of people comfortable with their chips. david: as you look at this race to move to generative ai, you better than most can tell us what's the biggest risk, what could go really wrong in this process? chris: the key uncertainty is how companies will monetize the investments in ai they are making. there's a ton of excitement i think justifiably so in all the use cases but investment dollars going into building out ai infrastructure are substantial and the next couple of years

investors will be asking what's the monetization plan behind all of this investment. really early stages but i think every technology boom tends to have global aspects to it. i'm sure there's a chance some of the investments being made right now and up not being monetize a bowl and and up being wasteful. katie: that was chris miller. tomorrow we will be joined by the nasdaq ceo and on wall street week later on we will hear from peter cross of aperture investors. we want to bring you some breaking news. this out of nomura dismissing 60 staffers due to the ongoing slump in dealmaking and capital markets activity according to people familiar with the matter. those include about 30 people in the u.s.. we will continue to follow that story. coming after what we heard from ups to cut 12,000 jobs so it is still a theme at this point.

super micro computer getting a pop after a rosy revenue forecast. we will discuss next, this is bloomberg. ♪

katie: super micro computer shares at an all-time high after the server maker beat second-quarter estimates and raised its revenue forecast for the rest of the year. joining us is matt. you can tell behind the market reaction this was a surprise prayed what was driving this beat? matt: it is really ai demand. we just heard dr. miller talk about the strong demand for nvidia processors, supermicro is probably the leading oem

shipping service at this point. katie: demand still outstripping supply. even with that dynamic it's interesting to look at your own coverage. you raised your price target to $530. quite a jump there but you are maintaining your neutral rating. talk us through the logic. why keep a neutral rating on this stock at this point? matt: with supermicro in terms of taking advantage of their early leadership on gpu-based servers, moving forward through the end of this fiscal year for them. i think they have great visibility, they have a strong backlog. they continue to grow. the questions i wrestle with our when you get beyond that the

only thing you heard is nvidia has this ecosystem that keeps them positioned as the dominant supplier on the server-side the ecosystem is not necessarily there. you'll find ways to differentiate yourself moving forward and i'm not certain whether or not their attempts to do so going into servers will be successful. katie: to that point we also have amd earnings to look at. you've said we've long been looking at and is the best positioned to serve as a second source/alternative to nvidia right now. is that the hope of a lot of these competitors? maybe not beat them at this stage but at least be second best? matt: at the end of the day you want to be the best in the space. having said that we look at silicate markets or a lot of technology markets we had one or

two players who dominate the landscape and so i think it's being that competitor to nvidia what we saw with and what their last generation of ai chips, they had a very performance -- they got penetration in supercomputers, that's often a prelude to gaining traction across other segments, it looks that they've got traction in a number of light -- large hyper skill customers. we see that as catapulting them to that position. >> let's talk about what investors will be looking for very closely and these results, that's the new mi 300 accelerator chips. those just begin shipping. how high our expectations relative to what you think the results might be?

matt: the expectations for the year are extremely high. i have seen numbers in print that are as high as seven or 8 billion in ai chip sales for this year. i am not that bullish and i think that a lot of that traction would have to come towards the second half of the year. i think amd tends to be more conservative than that. i think it's all about how they talk about the opportunity and where they are at that ends up dictating what the stock does after the report. katie: messaging really important here but so to is valuation. you saw raymond james actually

downgrade them based on valuation. their logic there was you take a look at the stock it's around 20% unit share among ai gpu's. you look at the run they have had, you look forward to what they are expecting after the bell today and how do you think that matches up? matt: i think it's less about numbers and more about how they talk to the opportunity for mi 300. at the end of the day you have nvidia whose closing in on 20 billion in data center revenues per quarter. if you think about amd only being 10% of that as the second player in the market, that shifts the revenue outlook pretty substantially. so it is progression i think

towards that position, it's the most important thing and that will dictate what the stock does more than anything else. katie: really great to get some time with you, appreciate you hopping on. we want to bring you some breaking news, president biden speaking to reporters saying iran is responsible for supplying weapons on the recent attack on u.s. forces in jordan. the administration has been under pressure to respond to the attack. we will have the latest for you on balance of power at 1:00 new york time. let's look at some of the names hitting highs and lows. meta and microsoft hitting 52 week highs. it was raised to equal weight at morgan stanley. the broker bullish on u.s. large banks. you can see the shares not doing too much.

meta holding on to that rally. coming up, ophelia snyder joins bloomberg technology with caroline hyde and ed ludlow. this is bloomberg. ♪ get help reaching your goals with j.p. morgan wealth plan, a digital money coach in the chase mobile® app. use it to set and track your goals, big and small... and see how changes you make today... could help put them within reach. from your first big move to retiring poolside - and the other goals along the way. wealth plan can help get you there. ♪

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>> from the heart of where the economy, power, and technology combined, this is "bloomberg technology." caroline: i'm caroline hyde. ed: and i'm ed ludlow in san francisco. caroline: it is time to show the impact of a hi