katie: a huge week for earnings and monetary policy. we had the fed earlier in the bank of england holding the rate at 5.25%. it dropped references to further tightening in its guidance. that opens the door to interest-rate cuts for the first time since the pandemic struck. the central bank has stuck to predictions that interest rates will fall to target this spring while warning that price pressures could reemerge. francine lacqua sat down with the boe governor earlier today. >> i think that we have changed

the question from how restrictive do we need to be to how long do we need to be restrictive. that is important. also, technically technically u. at least that can have the right effects. i think that now the question is for us is how long do we need to maintain this dance going forwards? i have said a number of times that we are not making predictions at this point. we are setting up the framework. the things that we think are important to look at haven't changed. services, inflation, aspects of the labor market. global shocks, i think that we are seeing the disinflation side to the global shocks. >> is it wage growth? is it something specific rather than numbers that you look at that will give you the impetus

to cut? >> a number of things. services inflation is still at 6.4%, well above anything that's consistent with meeting the target. i think with wage growth we have seen the official measure come down. it is below where we thought it would be. the open question is whether that was an adjustment in that index. whether that is really a move. it is now in line with the other things that we look at. they are above levels consistent with hitting the target. the important thing is that inflation has come down a long way. we think that is going to come down further, i'm sure. >> is that thanks to bank of england policy? >> two things. first, the major driver of that is the disinflation side of the global shocks. what bank of england policy has done, and i've been saying for some time, is to prevent it from

becoming domestically embedded for second round effects. we said that that is what we can do. we cannot stop global shocks. i wish that we could stop wars, but we can't. our job is to stop it from becoming embedded. >> governor jay powell pushed back against expectations for march rate cut. markets were pricing and some cut in may or june. is that fair? >> i think markets are responding to the fact that we have set out our framework. the question for us is for how long. markets are coming up with their own answer. that is quite reasonable. it is not our only judgment and we will decide. >> why are you so afraid of committing to a cut? is it because you are worried about inflation coming back? are you worried about the budget that's coming up in march? are you worried about having to reverse course?

>> two reasons. one is the evidence. we always want to see the evidence. the second is that the world is still a fairly uncertain place. there are things going on in the world that are not the normal course of events and can have quite big effects. we want to see how these influences -- the evidence is vital to us. >> like an insurance policy? >> it is a question of being too soon to conclude that we are on that sustained path to target, but i hope that we will be there before long. >> do you think that the u.k. was in recession for the last few months of 2023? >> we don't have a recession in the forecast that we published today. frankly, it is in the balance. you can have small margins. we don't actually have a recession.

i think there are clear signs and indicators in the u.k. that we are seeing a pickup in indicators around the turn of the year going through january. i think that that's positive. that is why it helps to expand our projections, our forecast. we have a gradual pickup in growth. >> it is difficult to explain to someone given that everything seems to be hanging on a balance. how would you describe the economy? >> i think that we are still seeing subdued growth but some signs of a pickup in activity. i think that we are seeing stronger, and i'm pleased about this, household incomes. unemployment has not risen like we thought it would and that is good news as well. those things are now being reflected through. what we see is the gradual pickup in economic activity going forwards. >> 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. caroline: i am caroline hyde at bloomberg world headquarters in new york. ed: i am at ludlow in san francisco. this is bloomberg technology. caroline: peloton tumbling. we will discuss where the comeback efforts went wrong. ed: the landscaper ipo's is heating up. we will dig into mx exports which starts trading today. caroline: we will speak to the ceo of qualcomm, but first let's check in on the markets. a macro sigh of relief after yesterday.

we redirected our thoughts. it felt like there was a different tone from jay powell and marched being taken off of the table for rate cuts. today we bounced back a little bit with big tech on top ahead with key earnings that we will be discussing. the nasdaq, china also saying that we are committed to stimulating our economy and in particular trying to focus on the semiconductor area. we saw big moves for chinese stocks. it still flows into what's happening with chinese-related names in the u.s. the golden dragon china index is what i look at. nymex crude is up. this is geopolitics and play and worries that we may see cbs reporting some focus on syria and iraq coming from the u.s. over overall conflict ramifications. up .2%. the world of crypto, bitcoin is flat but we saw a spike higher from those of the day. in lockstep with where tech stops are going -- tech stocks

are going. ed: i was thinking about what was going to happen aftermarket looking ahead to the three names behind me. from a sheer market cap perspective and markets and stories, this is mega. apple higher .9%. what's going on in china? we had a lot of concern at the beginning of the year for the outlook of 2024, but then vision pro started to come and we thought this might be good. what about the iphone? it's a high bar quarter and we know that from google and microsoft. does that apply here? the ai story is relevant to all of them. apple, give us the ai story particularly for the iphone. amazon, higher 1.5%. how is aws doing in making it available to the world? custom or amazon zone? ? mehta, frigate social media and the metaverse, they want it to be an ai story. in the context of advertising strength have they use their

ai competence to boost advertising sales? we look appellate on. it is an astonishing story and how far that peloton has fallen and continues to fall. the stock is down 23% now and it's a market cap of less than $1.5 billion. the outlook is that sales will continue to decline. whatever this company does, frankly, it hasn't worked to get back on track from a hardware or software perspective. caroline: we will dig into that in a moment. the world of sports and health and exercise, $13 to $14 each, the ipo price was $13 and that is off of the midmarket range. this is a company that's coming to the market and selling new shares. this is wilson tennis rackets, a big exposure to china. we will dig into that ipo story. first, let's return to the wells that are really expressing themselves in the share price -- the woes that are really

expressing themselves in the share price of peloton. people wanting to use the app in particular. where are they seeing some of the pain points? mark: essentially everywhere. free cash flow wasn't where they want. revenue beat wall street expectations by about 20 million. of course, it was another annual decline for the company. app subscriptions were down 16%. they are still reporting a net loss. this is an where the company once was. they were a high flyer at the height of the pandemic. they were a billion dollar plus quarter after quarter. now the revenue was in the mid-700 million, down 6%. no real growth or momentum for the company. they aren't expecting free cash flow to get to where they want. real profitability, real growth until the end of the year, until their fourth quarter. certainly they are not in a good

place at this moment. ed: i think that we're still asking, what is peloton? is it a content company, a hardware company? they have different strategies that include partnership with the tiktok one being the most prominent that we have discussed. then they say, let's look at universities. that's a big market from a gym equipment perspective. that hasn't worked either. mark: the strategy is to go all in on content and subscriptions. but this revamp that they rolled out a few months ago was a failure. it led to a large decrease in subscribers and they had issues with their algorithm as well. my personal take is that may be winding down the hardware business completely. that is a lot of your lack of profitability and net loss. go all in on content. but then you're just an app, but if you are pure content and you

have a nice subscriber base of nearly 700 50,000 users, maybe that's something that's interesting to a spotify or netflix or apple or amazon. you can buy this pretty gigantic fitness library, you can get the patented technology and you can make your netflix, spotify, or amazon prime subscription more valuable by spending a few billing and buying all the peloton's content. maybe that is the real long-term play, or at least it would be if i was the ceo. caroline: the wealth of expertise that you have another companies, we are waiting with baited breath for big earnings after the bell. apple is key among them. what are you expecting? mark: our estimates indicate that apple will avoid a fifth quarter in a row decline, earnings decline. that would be something that

hasn't happened since the original ipod days over 20 something years ago. any growth i think will be hugely impressive to the stock. what we are really looking for is a sizable beat on iphone. you remember at the end of 2022 that it ran into some serious covid-related headwinds. at this point, given the performance of the iphone 15, concerns in china, that this is a redesigned handset, that they haven't had production issues, you should be looking at a pretty clear beat on iphone. that's what were paying attention to. in addition to hopefully for the company a record round of digital services given all of the app store noise right now. ed: i highly recommend that you follow the top live blog on the terminal for mark's reporting and also his x. let's keep the conversation going and bring in the chief

diversity officer and head of active equity for more. i said earlier in the show that if there was a lesson to be learned from alphabet and microsoft that it was that this was a high bar earnings quarter. investors wanted to see tangible effects from all of the ai chat and investment over the past 12 months. now we have apple, amazon, meta on deck. you frame this as a high bar quarter? >> i do. thank you for having me on the show. it is a high bar quarter because although the fundamentals were really strong in 2023, multiple expansion also took place in a big way. when you have multiple expansion and good earnings growth in 2023 the bar is now set for growth on top of what we saw. that multiple expansion will be harder to get. i think that that is where the game of expectations comes into play. ed: there is other technology in

the world outside of this what we called the magnificent seven. maybe tesla gets taken out to the magnificent six. are we not looking at the right place? ann: we think that the market should broaden out. we really believe that in the back half of last year and as we look forward that that is true. look, there are good earnings prospects for several areas of the market. if you look at historic discounts between small and large cap companies, those historic discounts are pretty wide. you are right, there are really good companies, technology companies, health care companies, other companies that go down market cap that don't have the multiples, didn't get the multiple expansion. even some that have high free cash flow and did put up good fundamentals last year. those are the parts of the

market that we are much more attracted to right now. caroline: do the same drivers of growth apply on the smaller part of the market capitalization? do you want to hear from ceos how they're leveraging ai, thinking about cost discipline, replacing people with machine? ann: ai is not something that's going to go away. i think that we saw the first wave of it led by large companies. i still think that the large companies are going to lead, but what we are going to do is cai applications be applied across the broader economy. when that happens, you will see productivity and other things continue to rise. it does take a while to play out, so we are looking at individual companies that are applying ai. not just ai, other tools and other capabilities that they have two really work through the current environment which we

know is likely to still be a little bumpy. caroline: let's talk about the current environment and on the macro. is it therefore the job stated that you look to at the moment? is it any hint of direction of fed policy that dictates trade overall? ann: i think that the fed policy is interesting. the fed talk has may be added a little bit of confusion, but the expectations for five to six rate cuts for the year were just higher than what we believed would actually happen. yesterday wasn't so much of a surprise to us at all spring. we are watching the labor market really carefully and how that might be tied to company profits. if we go back to 20 22, the technology companies were cutting back on labor. some of those mag seven stocks that you talked about. that set them up pretty well to

produce good profits in 2023 with good recovery. we are at the end of an inflationary cycle in pricing power starts to slip away and there starts to be margin pressure amongst many companies. so, what tends to happen is they start to unwind labor. that is where the biggest costs come from. how closely our profits and labor tied? i think pretty closely tied. we will have to watch profits carefully and within each industry and also what that might mean for the labor market. caroline: there has been a lot of talk of cuts this labor season. it is great to catch up with the. -- with you. ed: we will have a post earnings conversation with lisa su. that is next. this is bloomberg. ♪ >> 23 was when we established

ourselves as a key ai contender. i think that 24, we will show just how capable and how much ai is now part of the entire amd story. other markets, i like pc's and i think that the traditional server will recover nicely. ♪

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can i run payroll too? choose payroll without the pain. ed: here is why amd is optimistic. while revenue in the current period will be short of analysts' estimates there confident they will book more than 3.5 million dollars from the line of ai accelerators up from the earlier projection of 2

million. i caught up with lisa su yesterday to understand why. lisa: when i look at the potential of ai it is the single most important technology innovation over the last 50 years. ai has so much potential to change the way that our businesses work, to change our personal productivity, to change the way that we do research, and a whole bunch of things. from our standpoint we see ai growing to upwards of 400 billion by the end of 2027. i think from an amd standpoint, we are at our launch, it was a great coming party for the a in the ai capabilities. it's gone really well. i think that our customer interactions, our product qualifications, our ramp-up has gone really well. we are able to update some of our numbers this past week. ed: i think that a lot of folks

focused on that ramp and how in the quarter you've exceeded the 400 million that you told me about at that event. it is 3.5 billion dollars in sales this year were in my 300 -- for mi 300. what is happening on the supply side? i wonder how big it will be in matching that number in 2024? lisa: this is the fastest product ramp in our history. we exceeded our numbers in q4, over 400 million. we will grow into q1 and we updated our forecast from 2 billion to 3.5 billion. we think about that as a customer demand statement. that's customers that we have engaged in who have made commitments to us and place orders with us. we are planning for a much larger number. this is what we should do. we always plan for success.

my view is that it is still very early in the innings for ai accelerators, but this is an opportunity for us to build a major growth driver as we work with our top customers on their ai plans. ed: that was the amd ceo lisa su. this is bloomberg technology. ♪

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this is something that i reported last night. a factory in nevada is in the works to use equipment from china's catl, the biggest company making cells in the world amid heightened scrutiny from washington. this is bloomberg. ♪ hey david. connect with an advisor to create your personalized plan. let's find the right investments for your goals okay, great. j.p. morgan wealth management.

caroline: welcome back to bloomberg technology. let's get a quick check on the markets. a little bit of a bounceback inditex stoxx. we think of amazon, apple and meta. chinese stocks have been performing well across the chinese market. almost a percentage point.

the 10 year yield is down seven basis points as we tried to digest. it does not look like much on the table. let's move onto the individual movers. up .5%, but could we have a decline in revenue? we have not seen that until back in 1988. qualcomm is up by almost 4%. mobile is recovering but what about connected devices? it has been a painful set of numbers. we want to talk about other areas of sport. what about other areas?

it is below the marketed range but they are pricing in the 13 to $14 share. talk about what this means. what is interesting is that they have big chinese backers and exposure to the chinese market. >> big consumer names coming to market. it is not just about the chinese consumer. they are heavily exposed to the americas. this is a large been going public at a time when people are worried about the global economy. some of them are more affluent. they are paying a little bit more than patagonia.

they have been able to expand revenue as people get back out there, traveling around the world for a lot of these different categories in athletics. ed: the breakdown. we are still watching that for the opening, but it is one to watch. do not miss the interview with the ceo. a conversation that we need to have. this is a curious one. it is an interesting read over. your view on what this is is a signal to the market. >> it is a data point for sure. the brands are -- they have been

around for a while. it was laden with debt. the market has been punishing for a long time, even though rates have come down, still relatively high and sell anything market is taking a wait-and-see approach. what was interesting is that 60% of the ipo is bought by insiders. it should stimulate demand, but this ipo is the most completely carried by inside investors. this is a data point, a different kind of company. only see traditional companies a little earlier, but with real growth stories, i think that will be a better benchmark.

ed: is it a starter for the companies that are waiting in the wings as ipo candidate? >> it does not feel like a big breath of wind. we will see how they trade today . let's hold out on the verdict before we see how it trades. it does not mean the ipo market will close. they treated down and priced below but both of those companies were highly levered. i would like to see. i would like to see how more traditional companies who do not

have a long history or leverage, i would like to see how they price, so i do not think there is a ton to learn from these ipos. caroline: let's focus on this week. trying to get a sense of market capitalization, a significant haircut from where they last raised money. you have been highlighting names that might come to the market. i we likely to see some pain? what recompense do they get? >> it is a good question and the height of the market. i think given how they performed reasonably well, dated sounds closer to 800 million, so they

are growing reasonably well, but i think that would suggest an ipo in the for -- four to 6 billion range. it will be an interesting discussion and potentially ipo investors. but this is a problem that a lot of companies are facing. this is the medicine that they will have to take but we will see a lot of interesting negotiations at this point. caroline: you are there helping to make names. what is appetite like at the moment?

>> with a couple of exceptions, clearly the ai space has been a rocketship. generally speaking, we have seen significant devaluation. we are seeing trading picking up a little bit. we are seeing pricing below the 5 billion range. as a general rule, we are seeing a little bit of uptake in demand and valuations. most of the indicators are stable. caroline: brilliant to get your perspective. coming up, we will talk about the market a little bit more. evaluation on the promise of

using ai to automate some of your more tedious tasks. this is bloomberg technology. ♪

caroline: let's talk venture. the company uses ai to make audit and data reconciliation more efficient. i love in the release that you say that you have made their job

fun for the first time. make it sexy for us. how are you making financial audit that much easier? >> it is an exciting day here and this is why. every day we wake up and we operate on trust. there are people behind the scenes making it possible. audit has been under tremendous pressure. there are fewer people joining the industry and more people leaving it. there have been very few software solutions. that is what data's number looks to solve. we look to validate transactions

that they are looking to reconcile, match and validate. we do that in seconds for them. ed: the why he raised money is interesting because your revenue growth is impressive. you want to go through all of those internal folks who are daily worrying about compliance and control programs, but why did you need $100 million to do that? why couldn't you do it off of your cash flow? >> we absolutely could have done it from our cash flow. here was an opportunity to accelerate our vision. it was about being able to build and ship new products faster. it gives us the opportunity to expand. we are opening our first office

there. we could not be more excited to serve customers anyone looking match and reconcile data. caroline: where does that get allocated as to what you can do? what are the bottlenecks that you're facing? >> the auditing industry has long been forgotten as a vertical. some of the work that they are doing is some manual that you would be shocked that we are in the year 2024. our agenda is to build as many products to solve as many problems for them as possible. all of our focus is on

innovating. ed: one billion dollars valuation. thank you. coming up on the program, we will keep the conversation going around earnings with the qualcomm ceo. a lot to discuss about market, what is going well and what is not. this is very technology. ♪ it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david. connect with an advisor to create your personalized plan. let's find the right investments for your goals okay, great. j.p. morgan wealth management. thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh

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ed: more earnings and this time qualcomm delivering a solid forecast helped by a recovering market for smartphone chips. let's get right to the narrative. smart phone, you have said that the inventory has improved but the lingering concern is anything with a network connection. you are saying they are still working through inventories there. what can you tell me about where they linger specifically? >> very good. very good talking to you. i do not know where this

commentary is coming from. we saw this in the press yesterday. the majority of our business, we are working very hard to diversify the business. we have seen that inventory had stabilize since last quarter. results with eps is that they are getting back to normal and we are happy with the health of the system. see that in the numbers. we were some of the first one to talk about it. but we said that is the lowest quarter and we expect to see growth in the coming quarters. i do not understand this comment

on inventory. we are happy with the number of the revisions that came out on the stock. ed: we are seeing the inventory normalizing. a positive area was china. we did get that. is this a commitment forward ordinary? >> this is a great question. we have two vectors that are very encouraging. it has proven to be resilient. it shows that users, when they buy their next phone, they want a better phone. we are seeing some of the use

cases coming in and that has brought excitement. some had record presales. there was a lot of concern about while way coming back to the phone business. our customers are seeing opportunities and that is reflected in the quarter. we are happy and cautiously optimistic. caroline: how do you navigate geopolitics? >> we just do business. we are happy that we have a strong relationship with china.

there is the business that has been good for technology. as we diversify the company, i think we see our china business expanding as well. caroline: i think about apple's earnings after the bell. ultimately, you have said that we are recovering, but how excited are consumers to renew? how much will this carry you on into the rest of 2024? >> we do not once make a prediction. there are a couple things that we know will happen. we have just been to the 5g transition, but the early signs

of generative ai cases are exciting. same thing happened in china. that could create an interesting opportunity but it is hard to predict the timing. ed: you and i have talked about processing of large language models on airplane mode. when does that business show up in the financials? >> the way to think about it is a premium tier becoming part of market. the other is more silicon

content. there has been the positive contribution for the business. it is the first sign of opportunity. ed: a lot of partnerships and deals. look at the history. can you continue on the deals and avoid the legal entanglements that you have had in prior years? >> i think we have some important distinctions. the first is our licensing business. there has been the reason that we have been in a number of disputes in the past.

in the quarter, we announce some important milestones. we also saw two significant customers renewing the agreement. that is a very positive sign to investors. what is exciting about qualcomm -- we spent some time talking about handsets, but also. there is a decline in alto. the whole market is down and it speaks to the number of chips

that we will be making in the automotive industry. caroline: the qualcomm ceo. great to have some time with you. that does it for bloomberg technology. remember to look at our podcasts. ♪

>> welcomes a bloomberg markets. a day after the fed decision and we are right in the middle of the earnings season. markets are searching for direction. let's get a quick check of where we stand right now. a couple days of losses here.