♪ >> i am taylor riggs in san francisco. this is "bloomberg technology." turnaround,esla's one analyst says it looks credible. we will hear from dan ives of tobush who raised his price $370. travis kalanick severs his ties with uber, selling his shares.

what is next for him in the company? text regulation, legal and legislative hurdles continue, especially for overseas apps. we will hear on how much more needs to be done. action,arket specifically in the tech sector. the nasdaq closed above 9000. it has returned more than 35% this year and is on track for its best year since 2013. one of the best performers has been apple. it is one of the best performers in the s&p 500 on a point basis. on as outperformed percentage basis. another high, another day, another record at tesla, $430 a share. tesla and elon musk have defied the shorts. we will have more on the record coming up. first, i want to look at the 2019 story of uber.

the company went public in the spring, but has faced legal hurdles. some battles were over its international expansion plans, with london stripping the company of its license. another issue, whether drivers are employees or contract workers. this week, we covered the man who cofounded the company, travis kalanick, and his desire to leave it all in the rearview mirror. we reported tuesday that he is stepping down from the board and has sold all of his remaining uber shares. he was ousted as ceo in 2017 following chaos and controversy. andnt to bring in dan ives our technology senior executive editor brad stone. simplify itlp dimple all? >> i don't think so. it thingst simplify

anymore than 2017 when travis was ousted from the ceo spot, went to the board. he was the largest shareholder in on the board but focused on his new company. he started selling the stock in early november after the post-ipo block expired. this is a slow moving divorce. travis's voicer, was not that loud, so it codifies things already underway. taylor: did anything change for you on tuesday on this announcement? >> it ended a dark chapter. he seldom was $3 billion worth of shares. it has been an overhang on the stock. it would be awkward if he remained on the board. it speaks to uber being a train wreck since the ipo. this is the final chapter. now it is optimism going into 2020, but there is a lot of

pressure. there is a fork in the road situation. when you look at uber, that is the issue right now. look at some of the issues they have faced. right now there are a lot of worries going into 2020. taylor: brad, what are some of the issues they will be facing? >> one issue is profitability. this company is losing billions of dollars. it is 12 years old. , ridesharing in north america, has slowed, so investors want to see growth in the newark geographies, also newer geographies, also uber eats. the question is can it keep growing. has put a stake in the ground and profitability is around the corner, but investors want to see it. taylor: if you want to look at a

chart i'm showing inside my , bothal, uber and lyft down now 30% since the ipo. uber has been on an uptrend early to mid december. dan, what is the bullish thesis for uber? >> it is you look at underlying growth not just drivers, but thetration, 2% to 3%, opportunity to monetize that going forward. if you look at growth and profitability in 2021, and if you look at uber eats, i see an eight dollar to $10 overhang on the stock. the question for uber is do they cut that business or get to the point of probability, because it has -- profitability, because it has been an anchor on the ship. now, its right

continues to be a heartburn situation because of execution, overhang, as well as miscommunication with the street. it has been that trifecta. brad, we were talking about uber eats, and if i want to bring this back full-circle and connect this to travis callan nick, we were talking about cloud kitchen -- travis kalanick, we were talking about cloud kitchen. where is travis kalanick headed now? >> this company could be a partner with uber. it is this virtual restaurant idea. you can start these kitchens, at least the space to restaurants, and fulfill online delivery. you can't walk in and get a table. they are purely for the online business. uber eats also works with doordash, and travis has been hiring former uber employees and

uber has gotten upset about that. clearly this could be an accelerant, but they could find themselves working with and helping uber's competitors. taylor: i spark with mark mahaney of rbc this week, and uber was the topic. he calls it peak regulatory fear , where there is so much fear about regulation, and he said it is overblown. what are your thoughts on ?egulation overhang on uber >> i am with him in terms of how the stock's risk-reward into 2020 but the big issue, the black cloud, that could be the gut punch to the business model, the economy, and uber. it needs to be resolved in sacramento. the broader worry for investors is not just california, but how

about other states and other countries? look at london, which continues to be an issue. i think regulatory is an torhang, but uber need handhold much better rather than the disaster story we have seen over the last six months. taylor: dan, can you distinguish between uber and lyft and pick one over the other? >> i think lyft has a better shot of working in the near term. domestic, which is the key. no overhang from the food delivery piece, which is important. it is more of a pure play, less regulatory issues. i think both names work, but i think it will be an uphill battle for uber in the near term given the broader regulatory issues, especially london front and center. that is a focus for investors. taylor: brad stone, thank you

for joining us. dan ides, you are sticking around. amazon said it had a record holiday season. the on line giant said billions devices shipped and ot sold. echo d the number of items delivered with same day shipping quadrupled compared to last holiday season. tradingp, tesla shares at an all-time high. wedbush raising his price by $100 to $370 this morning. we will bring you the latest. if you like bloomberg news, check us out on the radio come the bloomberg app, bloomberg.com , and in the u.s. on sirius xm. this is bloomberg. ♪

♪ trading atla shares an all-time high, up 1100% since going public in 2010. according to dan ives, the turnaround is looking credible. he raised his price target to $370 from $270. take a look at this chart i'm showing in my terminal. you are higher than the median average estimate of the street, which is $296. what do you see as your bowl thesis -- bull thesis? months have been

massively impressive what they have been able to do in terms of turning this around for demand and profitability. stock as a base case, $370. case, $580 to $600. if they're able to execute in this china thesis, the upward trajectory in terms of demand, you can see the stock ohio. this gets us to a base case. case is $580 to $600, and a lot of that rests on pressure. taylor: i've talked to a lot of analysts who are concerned about demand in china. do you have any sense of what could be a bear case if something were to happen in the economy starts to slow? what we need to happen for you

to turn more bearish? >> in terms of work on the ground in asia, and over all demand, how quick could you get to 100,000 units in china? quicker than the u.s. or europe? if the answer is yes, then this could really take the story to the next level. in terms of the bear thesis, some sort of regulatory three hits aga snag, or competition slows down the underlying demand story in china. that would be the bear thesis. we have talked about this many times over the last six months, proved things over the last few quarters. china is the next leg of the growth story. laylor: so much of the bul

thesis relies on demand for the model three. that is the least profitable model. at what point does the men shipped to the more profitable models? x, when you look at s and demand has started to tail off. what has been key to the tesla goinghesis and the stock from $300 to $430, it is profitability. they have done a great job getting profitability on core model three and what that trajectory looks like. ands really software upticks within the actual versions. you need to see that software version from self-driving to others, that's an extra $10,000 per car. that is all profits that go to the bottom line, so that is the

key, the gross margins story for tesla over the coming quarters. taylor: take a look at a chart i'm looking at in my terminal. they had a big surprise profit last quarter. they are cutting their way towards profit. is that sustainable in 2020? >> that is why we are still waiting. the rubber does meet the road. it will be tough to cut their way to profitability on that trajectory, especially juggling all these balls would china come insurance, robo taxis, others. that's why the next few quarters , this is a stock that hits a speedbump in the bears come out of hibernation mode and here we go again or -- >> sorry to cut you off. tap does tesla need to capital markets again? >> as of right now, if they could stay profitable, they don't need to tap the capital

markets. if they hit a speedbump, you go 2021, you could tap capital markets. that has been a huge overhang on the stock. come itestors say how has had such a huge run? it doesn't look like they have to access capital after accessing it earlier this year. that is the key to the stock. taylor: who is the competition? many far andn, wide, not just the u.s., but internationally. ofnt and center, in terms when you look at the competition they are seeing, does it impact them, especially norway. there is one key competitor. right now there is a moat. does it hit him in terms of demand? i don't think you will see that until q1 and q2. feelis why the tesla bulls

there is fuel in the tank. no doubt, the fundamental story has changed over the last six months. taylor: you are staying with the spirit up next, we will go through your research on what to expect from big tech and 2020. this is bloomberg. ♪ bloomberg. ♪

♪ taylor: we are back with dan ives of web publish. -- wedbush. i want to look forward to 2020. you know more than anybody else. it would not be technology if we did not mention apple here thanks to you and what we get more street highs. now $350 a share. take a look at this chart in my terminal. that is well above the median analyst and where the company is $350?ng now, so why ourt is a continuation of

thesis playing out this year into next year in terms of the super cycle. , 900mes down to the math million iphones worldwide. in million have not upgraded 39 months. you're going into a super cycle, 5g on the tail end of that, and when you look at that, some of the points, this is a stock that continues to go higher. i think $350 is base case. two or three years out, you could see a stock that approaches $1.5 trillion to $2 trillion in terms of that thesis playing up for the next two years. super: what if the super cycle upgrade materialize? >> especially on the first part, get thet iphone 11, you

trajectory going into later this year. from our work in asia, it looks like about 200 million units with the 5g cycle, so in terms of suppliers, all indications are that will be a strong product cycle. there will be speedbump's and we will hit thoss in the quarter going into 2020 -- speedbumps and we will hit those going into the quarter in 2020. that is why we have such a bull of theon apple in terms iphone, but services and re-rating. taylor: part of the bull thesis is a supreme balance sheet. showing $100 billion of cash after the debt they have. what is the best use of cash? generates $60 billion in

free cash flow. they will get vertically integrated. they will have more technology within the fun. acquisitionintel 5g , i could see more of those, but i do think content is what they go after. i think they will acquire a lionsgate,020, mgm, a handful of others fit the bill , because content is key, that is services. when you look at the streaming tv service, that is something they could acquire. they will continue buybacks significantly, but i think they will get more acquisitive in 2020. go to: i want to microsoft. you still have an outperform rating on microsoft. i keep hearing their azure cloud product is poised to benefit more than amazon from the shift to cloud.

do you agree? >> that continues to be quite it is our top picks along with apple. opinion, covering tech for 20 years, it is one of the most jaw-dropping turnarounds i have seen for any tech company. right now microsoft is the cloud play. they have narrowed that gap with aws. look at the jedi deal. in the first phase, it was amazon. the next phase will be microsoft. a real rating is stock and numbers continue to go higher. that is one that is only halfway through this cloud story playing out. it is a big youetitor to slack, which have an underperform rating on. walk me through why you will be

shying away from slack. throneso be too game of here, but i think winter is coming for slack. when you look at where that is focused on the broader azure 365 holistic vision, it goes up again slack. what will be tougher and tougher is that slack tries to penetrate their core install base, which is key to the bull thesis. slack is a stock that will go significantly lower from here because of competition. it is tougher and tougher to go up against microsoft. slack is a phenomenal company, everything they have done, but darker days ahead. taylor: you also cover cyber , especially as we head into an election year in 2020, what is your thesis on cybersecurity?

>> cybersecurity as of right now thatx to seven times number going into 2020. in terms of cybersecurity, that continues to be a golden age for cybersecurity. strike,palo alto, crowd you are seeing more and more data moved to the cloud. you have to protect that. today only 30% of workloads are in the cloud. that will go to 50% in the next two years. a big beneficiary is cybersecurity. cloud and cybersecurity are the two themes where i want to be invested. i think there will be a lot of m&a and cybersecurity. it is fertile and ripe for consolidation. taylor: you heard it here first, cloud and cybersecurity. wedbush director dan ives, thank you. one senator is making his mark

by taking on big tech. we will hear from him on how he plans to make sure compass like facebook and google respect your privacy. that is next. this is bloomberg. ♪

eyylor: senator josh hawl may be the junior senator from missouri, but he's making a big name for himself by being one of the most outspoken critics of big tech. he has introduced bills to make big tech more transparent. we spoke with him in november about taking on big tech, starting with a letter he sent facebook demanding they explain their location data tracking policies. haidi: facebook has --senator hawley: facebook has said to

users that users can turn off location tracking, but it turns out you cannot. facebook continues to scan all the wi-fi in your area and continues to use your cellular location and continues to transmit that information to facebook. this is another misrepresentation, and i would like to know why facebook is telling users they can stop tracking when, in fact, they cannot stop tracking. google does the same thing, by the way, and i think this is one more instance of big tech companies not being honest with us about the data they are collecting. taylor: you think they are purposely misleading users? senator hawley: i don't know how to read it any other way. read the post facebook put up for all of its users saying you can stop facebook from learning your precise location -- a very lawyerly phrase, as it turns out . it turns out facebook is still

tracking them, still tracking wi-fi, still using cellular data, the cellular network to pinpoint their location. i think it is very misleading. taylor: what would you like to hear back from facebook in response? senator hawley: i would like to hear the facts. i would like to hear the explanation for the difference between what they have told consumers and users and what they are actually doing. there is a huge gap, and i would like to hear them explain it in their own words, actually come clean, be honest. really, this gets to the fact why we need to pass legislation. congress needs to pass legislation that gives every single american the right to opt out of being tracked, period. no backdoors, no workarounds. every american should say "i don't want to be tracked." taylor: are you also planning to ride a letter to apple and google, given that it runs on the ios software and google's android system? senator hawley: google is already well aware of my concerns in the area, as is

apple. google testified to me under oath that their users could turn off location services and not be tracked. that's also not true. android constantly monitors your network even if location services are off, and it transmits that information to google. tech companies are really all doing the same thing -- misrepresenting their position to consumers while they collect this information. they need to stop. taylor: to be fair, we've heard a lot about data privacy. we have seen a few existing privacy legislation come out. i have not gone anywhere. why do you think yours has a chance to go somewhere? senator hawley: for one thing, it has bipartisan support. the do not track bill gives power to consumers to say, "i don't want to be tracked. i don't want my location to be tracked. i don't want google or facebook or twitter or anybody to scoop up information about me."

it is sponsored by senator weinstein from california, senator warner -- senator warren from virginia. bipartisanad, measure that consumers discern have.e -- deserve to taylor: facebook's ceo, mark zuckerberg, visited washington, d.c. he had dinner with a group of senators including virginia senator mark warner. he spoke about what they agreed on. senator warner: i think mr. zuckerberg acknowledged self-regulation is not going to cut it. there needs to be rules of the road. they need to include more transparency, more protection for privacy, the ability for americans to know if they are talking to a human being versus a bot, and that we have to move around election security issues. on a lot of these issues, i felt

there was not a full meeting of the minds. we did not go through full legislation, but i think he realizes that the status quo and the kind of days of the wild, wild west are over. >> in terms of antitrust investigations, if facebook is too big, did that topic come up? where does that stand in the senate? senator warner: a number of judiciary committee members were there. i will not get into what specific questions they ask. i think there was more conversation about things like election security, like identity validation so that we can cut back on some of the hate speech, the manipulation that oftentimes has been used by foreign spy services basically trying to represent them selves as the specifict comments on issues like that, i will let members raise those issues. >> in terms of the timeline,

when some type of regulation will happen with big tech, what is the timeline on that? senator warner: my sense is it should be sooner than later. there is a series of bills i've got around transparency that are all bipartisan. i think almost all this legislation will get 70, 70 five votes. one of the concerns has been that the white house has been reluctant, it seems, to have anything -- particularly around election security because it makes them feel like 2016 might not have been valid. i'm not looking to relitigate 2016. i'm looking to make sure our system is safe in 2020. complaintleblower about president trump. what has the intelligence committee been doing on that issue, and will there be subpoenas issued an order to find out exactly who this was? >> i cannot comment about any of the content of what may or may not have been driven, but i can tell you that our bipartisan

committee wants to hear from both the acting director of intelligence and the inspector general of the ic. ifre is -- the law is clear, there is disagreement, congress still has a right and responsibility to know because the most important thing we can do is we have to protect whistleblowers. if they see something, they should say something, and they should not fear retribution. this current circumstance where it is kind of in this back-and-forth black hole of no information and no disclosure, even to the appropriate members of congress just cannot stand. taylor: that was senator mark warner of virginia. coming up, a summit where lawmakers critique social media platforms. we hear from senator marsha blackburn who was inside the white house's close-door event. that's next. this is bloomberg. ♪

aylor: president trump held social media summit in july. several right-wing leaders, lawmakers, and presidential fans headed to the white house to discuss political bias on social media platforms. one of them was senator marsha blackburn of tennessee who had been a strong critic of companies like snapchat and tiktok. she spoke to emily chang from d.c. senator blackburn: there are cases where child predators, pedophiles, have been arrested, convicted. coerceuse snap to children, threatening to put their video on social media unless they send more videos. this is something that parents need to have the tool to turn this off.

there needs to be explicit instructions for parents how to handle this. with snap is the snap map application that is there. unless that is turned off or properly set, these children can be identified with their location. the third thing is the discover section. i am horrified when i look through that at some of the information that children can discoverthrough that feed. click or one cap, what these children could be exposed to is awful. emily: what kind of legislation do you think of proposing or do you think you can accomplish in order to fix these particular issues?

blackburn: yesterday at our committee hearing, we talked a little bit about this because what we want to do is make certain parents have the toolbox and that social media outlets are going to work with us on this. privacy legislation is a big one here. making certain that individuals ave the right to disallow social media platform to access their data to do that data mining, to get in there, and grabbing this information, and that needs to be explicit, and the social media platforms ought not be able to disallow use of their service. they have made billions of dollars off your data. data is a valuable resource, so as we work through this issue this year, i'm looking forward

to working with them to be certain we address these issues of privacy and data security, responsible usage, as i said, antitrust, censorship, competition -- all of that needs to be reviewed so that we are ready to move forward as we see 5g begin commercialization. emily: you also just met with a very early facebook employee who has argued facebook should be broken up. in a tweet, you said the meeting was a refreshing, and this guy knows a thing or two about what is coming next big tech. we thing we both agree on -- cannot just move fast and break things. you also have senator elizabeth warren arguing to break up several big tech companies. you mentioned antitrust. do you think big tech companies need to be broken up? senator blackburn: i think we need to have a good discussion

about what it will look like, what the marketplace will look like as we go forward in the next 10 years, 20 years. what we are suffering from at this point in time is that congress has not taken an action to put any guardrails in place -- in place. like touch regulation is going to be best. let's do this a step at a time. they havege what access to and see how that changes their business model, like to exercise some preemption , put in place penalties and the federal have trade commission, which is in charge of regulating privacy in this country -- let's see where we get as we take these steps. i think doing these one at a time so that we are working in conjunction to be certain that we keep the marketplace robust,

that we encourage innovation, that we do not stifle innovation is important to do, and i think it is responsible of us as legislators to do that. taylor: that was senator marsha blackburn of tennessee. before the u.s. and china reached a partial trade deal earlier this month, alibaba co-founder jack ma has said trade tensions between the two countries could last 20 years if they are not careful. he sat down for an exclusive interview with bloomberg in the western african country of togo in november. usa and china relationships might be in some turbulence into the years. we have to be very, very careful. i think it is so important for

china and the usa, two great countries, to work together, supporting the economy, give people prosperity, share a lot of technology together, and for so many years, china and the u.s. have been working together. there's a problem -- that's very natural. if there's no problem, that's not natural, right? we have to solve the problems. we should not create more problems. loveu have said that you africa. you have acted a bit as a bridge between china and africa. what do you see as the main thing china can gain from africa, and vice versa, the main thing africa can gain from china? >> well, i love africa since three years ago, my first trip. i read a lot of things about

africa i thought i knew, but i came here and said this is not true. i'm inspired by the young people. i decide that i come every year at least to three or four countries, and i try to visit every country in 10 years. i would not say how china can help africa or how africa can i come from china, but as a global citizen, as an who has been working in the world for 20 years. i think a lot of experience, our could helpknow-how african young people. meanwhile, these years, i start to think, how can china help in

a more efficient way? china putting a lot of efforts in africa. aen i was very young, i heard lot of doctors in my hometown, they have to go to africa for but i think china and africa, there are a lot of things similarity. africa can learn from china on how china developed in the last 20 years in such a quick way, how we lift poverty out of that. ahead, first, the operator became a robot. internet is replacing customer service reps. we look at who is creating that automation. that's next. this is bloomberg. ♪

taylor: federal regulators unveiled a sweeping proposal that mandates tracking of drones. the federal aviation administration says the measure would remote public safety and help event terrorism. the rules call for tracking terror networks so lawmakers can stop the devices flying anywhere. fashion designers, interior designers, graphic designers -- now, there is a chatbot designer. bloomberg looks at one company creating these automated tools that are in almost every corner of the internet. [telephone rings] [indiscernible chatter] ♪

>> around the world, businesses field hundreds of requests from much -- from us each year. we want our flights change, a purchase refunded, our claim reviewed. that takes millions of agents to tend to our every need, but soon, automation will take over much of that, and it starts with the painstaking work of this 23-year-old. >> my name is laura morales, and i am a chatbot designer. >> you probably know the dominican republic for its beaches, but further west in the country's capital of santo domingo, there is a bustling hub of call centers for american businesses. laura works for one of them. some inquiries are handled by traditional call center agents over the phone. others are handled by contact center agents over life, written

chat. last year, the company introduced a third kind of agent -- a bot. oversees bots for three u.s. clients. they result simple queries on complicatedd more questions get escalated to a human representative. >> me as an agent, i used to take just one call at a time. with bots, you don't have that limitation. alexa, will i need an umbrella tomorrow? >> it might rain tomorrow. there's a 54% chance. >> bots today are everywhere, so the people who design their speech are in high demand.

it is like riding a screenplay with a -- it is like writing a screenplay with a choose your own adventure element. often, prescriptive conversations do not work out the way laura and their team hoped they would, so they are constantly tinkering. botsneed to check how the did the previous day. i go into analytics, and my favorite one is this. these are the moments when the bot did not know what the customer wanted exactly and i can see how many customers clicked on the first or second button on the menu. if my visitors are not interacting with my menus, that means something is not right. >> that's interesting because you used to be coaching a human agent and now you are coaching a robot. is that easier or harder?

>> easier. you don't have to worry about s feelings.ot' you are not emotional about it. you are just doing what you need to do for getting the response you want. >> laura started out as an entry-level agent when she was 17 and worked her way up. today, she makes about eight dollars an hour, which is four times what she earned when she first became an agent. the transition to work on chatbots took about three months to learn various aspects of the job including training and special software that does not require her to code. saw themediately benefits. >> a bot is never late. sick ores not get

pregnant. those are specific human situations that you cannot fight. automation is able to take that out. taylor: that is part of a "next jobs" episode and mini documentary series. you can watch the west -- you can watch the rest on bloomberg.com. that does it for this edition of "bloomberg technology," and "bloomberg technology" is livestreaming on twitter. be sure to follow our breaking news network@quicktake on twitter. this is bloomberg. ♪

[ dramatic music ] this holiday... ahhhhh!!! -ahhhhh!!! a distant friend returns... elliott. you came back! and while lots of things have changed... wooooah! -woah! it's called the internet. some things haven't. get ready for a reunion 3 million light years in the making. woohoo! -yeah! what are you doing back there, junior? since we're obviously lost, i'm rescheduling my xfinity customer service appointment. ah, relax. i got this. which gps are you using anyway? a little something called instinct. been using it for years. yeah, that's what i'm afraid of. he knows exactly where we're going. my whole body is a compass. oh boy...

the my account app makes today's xfinity customer service simple, easy, awesome. not my thing. paul: good morning. i'm paul allen and sydney. we are under an hour away from the market open in japan and south korea. from: good evening bloomberg world headquarters in new york. i'm shery ahn. sophie: i'm sophie kamaruddin and co. will import. daybreakwatching " asia." -- i'm sophie kamaruddin in .uala lumpur paul: our top stories this friday -- christmas cheer for friday aztec gains internet stack above 9000