emily: i am emily chang in san francisco. this is "bloomberg technology." coming up in the next hour, the nasdaq posts its worst day since 2011. it lapses into correction. the s&p 500 and the dow wipe out their gains for the year, and tech leads the way down. plus, truly historic. that is how elon musk is describing tesla's third-quarter. the company reports its first profits in five years.

can they do it again and again? the data industrial complex, the apple ceo goes after his data-driven rivals. why he says the way companies like facebook do business should make you uncomfortable. top story.e tesla shares soaring as they report third-quarter earnings. they usually give about two weeks notice of one earnings will drop, but this time the company gave barely two days. this time, elon musk strongly hinted they made money. analysts expect a loss. get this, positive cash flow $881 million. ,the earnings, on a day when the nasdaq plunged, yet tesla managed the 12th the best performance in the nasdaq 100. joining us now, a kelley blue book analyst. and also our bloomberg tech analysts. walk us through the numbers. >> the big thing is that they are profitable.

huge. the first time since the third quarter of 2016. this is only their third profitable quarter ever in their long history, but demand has been really strong. they pulled out all of the stops in q3 and there would be the -- no longer any demand was the fear, but the customer deposit number is still like -- emily: $900 million in deposits. dana: right. demands are continuing, even as they get more reservations more , people are buying them. emily: the question is, can they do this again and again? will this become repeat? >> this is what we're watching for. there was a lot of speculation some of these numbers might be frontloaded, but this was a huge beat we all saw. elon said he would expect to be profitable from q3 forward. if they can repeat this going forward, this is a huge win for tesla. it shows the power of the brand more than anything.

emily: i want to talk a little bit about this, because normally there is a significant amount of notice. this happened in less than two days. monday night, we found out tesla would be reporting today. is there anything unusual about that? dana: to be fair, tesla always reports earnings on wednesday. next wednesday is halloween. i know that myself and i think analysts in new york were asking the company, can you please not halloween? some of us have kids. we were expecting it next tuesday or possibly even in november, but clearly they have a good story to tell, might as well tell it early. the fact they pulled earnings forward, everyone was expecting this would be good news. emily: let's take a deeper dive into the actual numbers. the company said they are still on target to deliver 100,000 model s and x cars this year. we are always looking at the model three. when we look at the delivery numbers, are you liking what you see? >> i think one of the big things

about the delivery numbers is that the model three, model s, model x, all strong. and we haven't even seen the base level model three yet. that is a key part of what we are looking at going forward. once it comes out, consumers will want this at $35,000, the low price. there is still 20 of demand. it is a brand that has so much power. it's almost like a lifestyle thing like google or apple. as long as people are interested, they will do well. emily: tesla trading a new sessions highs up 14%. dana, this is after a very tumultuous quarter. elon musk's run-in with the sec after he claimed he was going to take tesla private and had funding secured for it, now they have been fined collectively $40 million, and he is stepping down as chairman. what are the outstanding issues of the settlement? a judge has approved it, but we are waiting to see who will become tesla chair? dana: we should know that by

mid-november. then the board has to appoint two new directors by the end of december. the board has been really mum about the search process. it is not clear if they are leading it internally or if they have a contractor with a search firm, but that will change the dynamics of the board. emily: they are supposed to be monitoring his tweets and communications, correct? dana: that is not kicked in yet. [laughter] emily: the tweets have continued. and, akshay, i'm curious if you remain concerned about his other behavior and if that is something you are watching? akshay: it is something we are definitely watching. the reality is, tesla has a lot of leeway as a brand when it comes to consumer perceptions. it is always under scrutiny, but a lot of consumers see this as elon is different as long as he does not do anything egregious, we can take some of that if they are building these beautiful cars and the quality comes with it. i think the brand has leeway with consumers.

emily: dana, we have any indication of who the chair will be? dana: no. we really don't. a lot of names are floated but that is wishful thinking. the chair could be someone existing who already is on the board and does not necessarily have to be someone outside. emily: akshay, who would you like to see in the role? akshay: there is so much speculation right now. one of the important things is that the model three is tesla's first go around with mass-producing a vehicle. for a lot of consumers, it will be their primary vehicle. not their secondary or tertiary vehicle, like the s or the x. i think someone with the auto industry experience might be important. we have seen rumors of james murdoch in other people. like dana said, it will be somebody with deep leadership experience. we can probably expect that much. emily: we've also seen analysts who have been pessimistic about tesla and changed their view and now they are optimistic. now they are long on the

company. but what are the outstanding concerns you are hearing from investors and analysts? dana: i think the concerns have shifted. first it was, can they produce a car? it took a long time. then it was can they sell the cars? now you will see the questions around the service. now they have built and sold the cars, can they service them. if people have issues with the vehicles, can they be fixed in a timely fashion? tesla is building the infrastructure around that and they have had snafus. people are on twitter asking elon for help. emily: and sometimes he responds , so that can be an expert move. dana hull and akshay, think you -- thank you as well for joining us. staying on the earnings front tesla is facing rising , competition from traditional automakers like ford and gm. ford reported earnings and david westin caught up with the cfo bob shanks from dearborn michigan. david started by asking about ford's investment in electronic cards and pointing out the

company is lagging behind gm. >> i wouldn't say that we are terribly concerned about where we are versus others. we feel very comfortable about the progress we are making on the technology itself. we actually are in the process of testing our business models in miami. we just announced we will take that into washington, d.c. i think we feel comfortable we are on track to launch a commercially viable business around moving people and goods in 2021. that is the timeline we have had for quite some time. i think the progress we are making is what we had expected. david: can you do that on your own or do you need partners? you have restructured your business so you can at least theoretically bring investment in. where are you in that process? bob: we have set up what we call av llc where we could potentially partner with others. we are certainly open to that.

since we made the announcement of that, we received interest from a number of different parties. nothing to announce today, but that is an opportunity and something we are open to. emily: david westin are speaking ford motor company cfo bob shanks. put ford and gm into context with tesla and the latest numbers we have just seen. shanks might be comfortable with this, but their profits went down to $.29 per share. they did beat estimates. they also beat on revenue, but if you dig in, it is not look -- doesn't look great. they beat revenue because people bought more expensive trucks. not because they are gaining market share. they lost money in europe. importantly, i know shares were up after market, i wonder if there will be give back because the ceo has pulled back on their margin targets for 2020.

that is not a good sign looking forward for the business. they've got challenges ahead. gm will see their numbers coming out later next week. they have had issues with sales inn in china and the u.s. the quarter. gm is still making good money, but with sales being down, there will be pressure there. on the other side you have tesla. their first really big profits and it looks sustainable. they made a lot of money. they generated $881 million in free cash flow which is a big number for them. elon musk says they can do it again next quarter, because the model three is up to pass production at a good clip and he has a lot of buyers. things are looking up for tesla and looking rough in detroit. emily: tesla and elon running a victory lap right now. that said when you look into the , future of this market, there has been skepticism that tesla , which was not a carmaker first like these auto manufacturers,

up,d not be able to keep and that some of the more traditional automakers would eventually catch up in electric cars. does that look plausible or is tesla too far ahead? david: tesla has a really big lead here. they will sell something like 340,000 electric cars. when you add in the model s and x, that is a lot of vehicles. the german carmakers are just to get these electric cars out in real numbers. general motors has a bunch coming, but you are talking about 2023 when they will have a whole graft of 20 of those vehicles onto the market. everyone is catching up or they have engineering vehicles to catch up. they are a few years away so tesla has a lot of room to get ahead of everybody and establish the tesla brand is synonymous with ev to buyers in the u.s. already. now they are going to go to europe and china next year, so they've got a big brand and

market advantage given the technology on the road. emily: a vocal tesla critic is now turned optimist saying that tesla is taking business from mercedes and bmw. david wells for us in detroit, thank you for stopping by. coming up, looking to the cloud. gow microsoft is ridin cloud-based services to a record third-quarter revenue. that is next. if you like bloomberg news, check us out on the radio. listen on the bloomberg app, bloomberg.com, and, in the u.s., sirius xm. this is bloomberg. ♪

emily: microsoft first quarter numbers are in and their cloud business is still driving growth. profit and sales exceeded analyst estimates. revenue was up 19%. $29 billion. revenue from microsoft's azure 76% aservices jumped they work to fulfill ceo satya nadella's vision of transforming the company into a cloud venture business. to break it down, we had to new york where the bloomberg senior analyst is standing by. thank you for joining us. i want to ask you about these cloud numbers. obviously growth continues to , soar, but not quite so fast as in the prior quarter. can microsoft keep this up? reporter: absolutely.

76% is still 2.5 times bigger than the overall cloud market, so that is very strong. overall total revenues of 18% in constant currencies are the strongest numbers i've seen for as far as i can remember. to put it into context the , entire industry is growing at about 7% and microsoft is growing at 18%. that is a very big delta. office sales jumping 365 36%, and it seems like satya nadella's turnaround and transformation of the company is working. what could undermine that? what are the headwinds? anurag: the headwind could be macro weaknesses across the world next year where the comparison is really tough for them. apart from that, i do not see a structural problem, because microsoft is now the de facto leader in hybrid cloud. the investments they made over the last several years are paying off.

both in revenue growth and margin expansion. other than any macro headwinds, i see no structure problems here. emily: there is a big pentagon cloud contract that it is competing for along with amazon and other cloud competitors. it is controversial. both microsoft ceo and the amazon ceo has said they believe the government deserves to be , in response to concerns about both companies working with the government. if big a deal would it be microsoft won that contract over amazon? reporter: i think it would be a very big deal. it would be a signature statement. a few years ago, amazon beat microsoft for a similar contract for the cia. if microsoft beats amazon, it will announce that their cloud products are as good, if not better than amazon which will make a big statement. emily: google is on both of their heels, how significant is google at this point? anurag: google is good when

you're looking at a cloud company or somebody that is a startup. enterprises that have the bulk of the i.t. spending, google is trying to get a good foothold in that. for amazon, they have partnered where microsoft has its foot in both worlds. google has to figure out to be a partner with somebody the way they can take the older stuff and move it to their cloud. emily: anurag, thanks for stopping by. coming up, tim cook takes on silicon valley talk. we will tell you what was said, next. "bloomberg technology" is livestreaming on twitter. check us out @technology, and be sure to follow our global news network, @tictoc, on twitter. this is bloomberg. ♪

>> we shouldn't sugarcoat the consequences. this is surveillance. these stockpiles of personal data serve only to enrich the companies that collect them. this should make us very uncomfortable. emily: tim cook once again

taking shots at apple's competitors. the apple ceo made those comments at an eu privacy conference in brussels wednesday. cook has made these comments before, rhyme 90 people that cook hasta pretends -- made this before reminding the business model depends on you buying their products, not them reselling or using your personal data. it also comes a month after the news that at least 30 million facebook user's data was exposed and after a bloomberg report saying apple was a victim of a chinese supply side hack. vehemently denied this. to discuss this latest war of words, we have mark gurman. what do you make of tim cook continuing to push on this in the face of opposition from other companies? mark: he has made privacy is number one priority in terms of what he talks about all the time. you can't go to a keynote

without them harping on the privacy of whatever product they just introduce. they just have slides at the end presentation about that. they have always had introduction to talk about how their products are responsible with the environment and now they have the same thing going with privacy. either has a new privacy related speech or software at every launch. emily: mark zuckerberg has hit back before. take a listen to what he said via video at this conference in brussels. mark: we've have reduced the ways advertisers can target ads and we are building a new tools so people can clear their history of facebook. we are investing heavily in both privacy and security. we now have more than 20,000 people working to keep people safe and protect their information. we recently created a new privacy and data use team with the sole focus of giving people more control over their data. emily: mark zuckerberg made the point they would deliver -- couldn't deliver facebook for free if they did not charge advertisers.

google also hitting back, saying they can deliver search to people for all income levels everywhere in the world for free. as we know, apple products are fairly expensive. is it a little hypocritical for tim cook to be taking this lying or does he have a point? reporter: it is not exactly hypocritical, it is more of a marketing element. what they are saying is we will not release free products, we will release expensive products that integrate all of these privacy features. it is something they have been harping on and made it quite to the company in recent years, more so than any time in their history before. so-called creator of the internet weighed in on this. take a listen to what he had to say. quote't have that actually, but he talk about how actually users do have the power to be part of this conversation. my question is, do users actually care? how much do users really care privacy, given how

willing they have been to hand over their data to google and facebook over the last several years? reporter: i think there's a large contingent of users who do care about their privacy. they want to know that their text messages, emails, calendar appointments, all that stuff is encrypted. i think the bigger question being raised here, does the functionality of these products take a hit because they are developed with privacy in mind? if you look at this war between siri, apple's voice assistant, and amazon alexa and google's assistant, theory was the competition. the driving force behind that is a lot of the techniques apple not ashey are sometimes accurate as storing everything in the cloud. a has to be a point where apple is able to get devices to be as private as they want, but also as good in functionality as the competition. apple says they are already there, but a lot of people don't agree. emily: we are expecting another apple event next week. what are you watching for? reporter: right.

october 30 in brooklyn, they are launching new macs and the biggest update to the ipad pro since it launched three years ago. emily: mark gurman for us in l.a. who covers apple for us, thank you for joining us. coming up, tesla shares soaring in late trading as the company first -- its moneymaking quarter in years. first we will talk to a tesla shareholder and he what he has to say about the historic quarter next. plus, bad news for the semiconductor industry. how u.s. and china trade tensions may be hurting chipmakers globally. this is bloomberg. ♪

emily: this is "bloomberg technology." i'm emily chang in san francisco. elon musk is calling this a historic corner, and he's not wrong. tesla not only made a profit, but the company generated in $881 million in free cash flow. the company has been a quarterly cash burner and even though musk promised a good quarter, it was tough to believe as the company frequently fails to deliver. big revenue and profits.

in about an hour, he will take the floor on an earnings call to discuss more. we have the ceo of gerber kawasaki. gerber's company owns shares of tesla. and from london, a tech investor and entrepreneur. as an investor, you must be pretty pleased. what is your biggest take away from this report? mr. gerber: it's even better than i expected. we modeled out certain numbers ourselves, and he beat those, and i'm really the only guy on wall street -- well, i'm not on wall street, but i'm the only guy in the industry that believed in elon's numbers, so i'm pleased to see the margins they been shooting for our there. they sold higher-end models this quarter, but it was much more profitable than expected. emily: let's say you were one of a few.

when it comes to the broader landscape and investing, is tesla creating a tough hill to climb for everyone else? tommy: i think they are. i think they are beginning to build that defensive mode, which a lot of people are looking to and wondering if it would be a disadvantage to some extent or create the demand for electric vehicles, show it is feasible, then the big guy can come in and sweep it up. i think what we are seeing is elon musk making good on his promises to generate profitability in q3 and q4, and i think it is a historic day. i think tesla are right when they say that. for the model three to be the best-selling car by revenue i think is historic, and it goes to show that tesla can make good on their promises and play by wall street rules. we've seen a lot of issues with elon musk winding up short-sellers and having his run-in with the sec, but this was a good day for musk and tesla.

emily: i am curious how bullish you are. how much better do you think the tesla story can get? mr. gerber: this is the beginning of what will be a historic run for the company over the next five years. this story can grow exponentially as they now accelerate production plans in china. china is really all in on the ev business and being the only 100% u.s.-owned company in shanghai is a huge opportunity for tesla to make a fortune in one of the best ev markets -- it is the best ev market in the world. we can see the consecutive launch of the model y, the truck, hopefully the roadster soon, continuing to ramp up wewth, and a level of growth have not seen from any tech company recently, at least not

any car company. emily: you have other carmakers on tesla's heels, questions if tesla can continue to service these cars. now that they are out there in the wild, can tesla keep it up? mr. stadler: i think it's a great question. they have a very different distribution model, a lot of online sales, owned dealerships. they are doing things in a different way. they really are disrupting the auto industry. i think you raise a good point -- how do they deal with these cars in the wild? we have not seen large volumes of tesla's out in the wild year upon year, so that will be a challenge, but they keep facing those challenges head on. what i would like to see, if i were an investor, which i'm not in tesla, that executive bench of leadership be built out a little bit. obviously, they're going to see a new chairman come in or chairwoman, which is forced upon them, but also more part -- they have also had some departures at the executive level, which you probably want to see that bench

deepened to bring in the experience to deal with those issues you talked about. emily: several departures. in the finance department, manufacturing department. how much of that is a concern to you? mr. gerber: the enormous stress the company has been under is not surprising. the stress i have been under as an investor, i can't imagine working there. that doesn't surprise me, although it is not preferable. i agreed the most important thing they do is build confidence by building up a management team around elon. the is an opportunity for board and company to make strong steps to build a plan to be a much bigger company. we can't have a company were only one guy is the main factor in the company. session planning is hugely important. i think that is the next big step for tesla, to continue to mature as a company. emily: it seems elon musk has been able to do that at spacex but not over and over again at

tesla. musk, even though he has apologized for certain things, it does not seem as if his behavior is really changing. can we be confident that will happen? mr. stadlen: i don't think you can ever be confident elon musk will conform. he is the ultimate nonconformist, and he has taken a lot of criticism for that. you would like to think he is -- much of it self-inflicted with his rather impulsive tweets. you would like to think he is intelligent enough to stop that kind of behavior, but i think he has taken a lot of criticism and today is at some level a vindication for him. this is a guy who has almost single-handedly dragged forward electric vehicles and made it aspirational and single-handedly dragged the rest of the auto industry with him to say, "ok, we are moving to an electric vehicle world," and that is huge news for tesla.

it is huge news for society as well. there has certainly been lots of bad news in the relationship between business and society, particularly in tech, and here you see someone who is genuinely making the world a better place. he is nonconformist, but i think investors knew what they were getting in for. they were investing in a company with the ceo who is a visionary who could disrupt the industry but who would never be a career ceo who played by the rules. he has to play by legal rules, and he fell foul of that, but i think he is learning on the job. he has to learn how to move from an ultra growth phase, ultra disruptor phase and learn how to really scale that into the mature company tesla can and should become. emily: elon musk certainly deserves credit for all of that. let's look at some of the other things that happened this quarter, one of which was promising he would take tesla private and have the funding secured to do so, which was, in fact, not true.

both tesla and musk had to pay $20 million because of that. he has smoked weed in a video podcast. he has cut off analysts and been outright disrespectful on earnings calls. as much as you like elon musk, what would you like to see less of? mr. gerber: your criticism is fair, but when you look at the ceos like les moonves being removed for attacking employees in his office or whatever you might say, this is benign stuff compared to some of the stuff you are seeing in ceo offices around corporations in america. let's keep in perspective smoking pot versus sexual harassment, for example. i don't personally think elon is normal or should try to act normal when he is not. i think the tweet was a mistake and a costly mistake, but far from the worst thing a human

could do. it is a hypersensitive environment around tesla. a lot of elon fans actually like that he's a real person and a human being, and probably a fun guy, too. some of that criticism is reasonable and fair, but we live in a different world today. when you look at how the president of the united states and how he acts, and that is the president of our nation elon's , behavior seems quite normal. emily: to be clear, we are not comparing his behavior to any of the people you just mentioned. i am talking about defrauding investors are potentially defrauding investors. mr. gerber: i don't think he was defrauding investors. he had a deal with saudi arabia. the sec documents clearly say he perceived he had a deal. the fact that he tweeted those two words, even that he was considering taking tesla

private, if he did not say funding secure, we would not be here. it was a mistake, and i am not trying to minimize that, but this once again is far from the type of corporate scandals we see at facebook, for example. it's nothing. emily: right. and from the saudi side, it certainly seems not clear that there was ever a deal in place -- mr. gerber: yeah, but they are buying everything. the saudis are buying everything they can, and now we understand why. emily: they have been trying to. we will see what happens next. ross garber, thank you. appreciate you sharing your views. tommy from swing technology thank you both for joining us. , i'm sure elon will give us plenty to talk about in the weeks and months to come. coming up, a selloff in u.s. stocks. wednesday, nasdaq posted its worst day since 2011. disappointing earnings from at&t and texas instruments drove the decline. we will break it all down next. this is bloomberg. ♪

emily: the nasdaq took a plunge into correction territory wednesday as a selloff in semiconductor and faang stocks continued to rattle the market following several disappointing earnings including texas instruments, who missed analyst estimates while also issuing weak fourth-quarter outlook. the forecast is bad news for investors who have already seen the philadelphia semiconductor index all 10% this month, and as tensions between the u.s. and china continue to escalate, the company warns of further issues with demand. here to discuss is romaine bostick.

what is behind the chip selloff? of it is about economic slowdown. a lot of analysts have said we are at the end of a cycle, and this is a cyclical sector. what you are hearing from companies, not only texas instruments, but you are just not seeing the kind of read through into the economic conditions, whether it is building for computers, smart phones, cars, all the other items out there. we are just not seeing the read through in terms of orders. you are seeing inventory buildup, pricing pressure, and as they are getting forecast for 2019 and beyond, they are not giving investors anything to hang their hat on. emily: do you see this as a sustained problem? is this the new normal? >> good question. if you look at the semiconductor growing, it has been

the last few years. we are coming off six consecutive years of growth. historically, i'd think the longest growth we have seen in seven years. from that perspective, it is not a big surprise we are starting to see a reversal of the growth. the big topic is the situation between the u.s. and china. i think it is anyone's guess how that will progress going forward. romain, walk us through these valuations and what they are telling you in the context of what you see in the broader tech market, which is not great. when you look at the broader tech market, you are talking about a sector that was overvalued and overcrowded as well. forward,start to look looking forward at what the future earnings are going to be and revenue growth is going to be, for a lot of these companies, the outlook isn't as good. growth forting 19%

eps for the tech sector as a whole. that's good and high on a historical basis, but it's lower than what you will get out of the broader s&p. this is the first quarter during this bull market where the tech sector will have earnings growth that lag the broader market, and these are stocks that have had the highest valuations over the past eight years, so at some point, we have to revalue this. let's take a look. nasdaq 100 now trading at 24 times price-to-earnings. even when you look at price to sales to take in better account of the nature of these companies, it is still about 3.4 times sales on annual basis, well above the s&p 500, and you have to ask yourself as an investor -- do you want to pay that? emily: this is a space that has seen tremendous m&a over the last several years and more recently, a lot of failed m&a. you look at broadcom, qualcomm, nxp, do you expect the current state to put a chill on deals going forward?

mr. svanberg: m&a has been for that's pretty tremendous in the space for the last five years, but we have been saying that &a party is ending. there are two reasons. obviously on the political front, and certainly when it comes to regulatory issues, it an been challenging to get and eight go through in china or the u.s. of course, this is financial. as interest rates start to go up, cost of capital on the rise, once that happens, it will be more difficult for companies to make the math work, especially for the actual acquirer of another asset. emily: thanks so much. we will continue to watch the chip market as it stands. coming up, it has been almost a year since an online personal styling company hit the market. as amazon moves into apparel, can stitch fix stay the course?

our sit down with the ceo, next. ♪

emily: welcome back. we have quick breaking news on the subject we talked about earlier. broadcom set to face eu antitrust scrutiny over its dominance. this coming from bloomberg sources. the eu inquiry will focus on chips in set-top boxes. we will continue to follow this story, but as we have reported, broadcom had attempted to purchase qualcomm in what what have been one of the best tech takeovers in history. the white house stood in the way of that. we will continue to monitor this inquiry. in the age of amazon, retailers are increasingly turning to ai and data to compete, and when it comes to apparel, stitch fix is proving to be an algorithm

success story. the online personal styling service uses a unique combination of of user data and human styling expertise. since the trading debut one year ago stitch fix users have grown to two point 7 million. while many online retailers using a i feel threatened by amazon, the stitch fix ceo says it is the business of personalization that sets them apart. i sat down with her on the latest edition of "studio 1.0." >> it is very volatile. amazon is amazing if you want to get something cheap and fast delivered to your home. the reality is for apparel, there is much more nuance. having millions of pairs of jeans to choose from isn't actually that helpful if what you are looking for is just jeans that will fit your body well. we feel a lot of confidence and strength and our focus on the discovery element. that's a little bit of a different business and what we are seeing most e-commerce with

today. emily: would you ever sell to amazon or a larger retail giant? >> i think it's clear we have chosen an independent path. we thought about all of the outcomes that are potentially available to us. we have a deep belief and still do that this is a company that deserves to be an independent publicly traded company, and they're still tons of market opportunity ahead, and we are very focused on independence. emily: there are a lot of companies trying to do what you do. other subscription services like daily look. ms. lake: what differentiates our business is not the subscription tag. the business is one that you can do monthly, but you can also do it a la carte, and people are not paying the same amount as you would in a normal subscription business. we are in the business of personalization. we do one to one, human

personalization scalably. , what we're doing is actually high signal data people are actively sharing with us that pertains exactly to the experience they are having. people will try things on, try five things, they will let us know that these were too big, these were too small, this is too expensive, i love this but i already have it, i love it in a different color. these are things people naturally are sharing with us to help us understand what they like and don't like about the product. 100% of the time because of the data we have, we know who buys what. a 25-year-old woman in louisiana but these genes -- jeans. 85% of the time, we actually know why. she is letting us know these are too expensive, this is too cheap, i love this, i love the way this fits on my body. the breadth and depth of the data is valuable.

emily: if you have all that data, do you need the stylists? do they go away? ms. lake: the stylists are a very important part. that data allows us to have a predictive ability on clothes and people and what can happen, so we are able to highly accurately predict this has a 72% chance of working, this has a 38% chance of working, and that data is presented to the stylist. the stylist is part of the selection process and part of the relationship building, explaining why she chose things and building the relationship. emily: in stitch fix went public 2017, at a $1.5 billion valuation. you are also the youngest female founder to take a company public. how does that feel? ms. lake: the process was not as -- it was rocky for us as a company. it wasn't as smooth as you would want to see in a perfect world, but at the end of the day, it

didn't really matter. i think this is a company that has been underestimated before, and we are happy to prove ourselves in a public market, and that day is kind of being able to celebrate and remember the journey that we were on, it was an incredible day. it was incredible to be able to share with our clients and employees and investors and the people who have had such a meaningful impact on how we got to where we are, but it definitely was a day i will never forget. emily: what is it like on the other side post-ipo? easier? harder? ms. lake: it is different. i think about in my job, in the seven years i have been doing this, every year, i think of myself as rehiring myself in a new job and committing to that new job. every year has been so different than years past. there were years when my job was making sure everybody was in line getting pieces out the door so our fixes would arrive to clients on time. that was the most important

thing i was doing in 2012. emily: what is your job this year? ms. lake: we are building trust with investors and spending time with and earning the trust of. there are small things that change, but the heart and soul of the company has not changed. in the way that it is different, i think it has made us better. we look at our financials with more rigor than we did before. at the end of the day, we are focused on making sure we build lots of long-term value for shareholders, and i think we feel a lot of responsibility for that. emily: stitch fix ceo katrina lake. you can catch the full episode tonight, 9:30 pm eastern time, 6:30 p.m. pacific. just to recap a busy earnings day, microsoft turned in brisk revenue this quarter as it continues to expand in the cloud. speaking of strong quarters, tesla had what elon musk calls a historic one in which the ev

carmaker not only made a $312 million profit, but finally stopped burning cash. we will continue to cover the headlines right here on bloomberg television. that does it for me today. this is bloomberg. ♪

comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast.

>> the following is a paid program. the opinions and views expressed do not express those of bloomberg lp, its affiliates, or its employees. ♪ next, a paid presentation featuring a live discussion on aging with some of television favorite faces. brought to you by trusted got the rancor -- g