♪ taylor: i am taylor riggs in san francisco in for emily chang, and this is "bloomberg technology. tech domination another runaway year for tech companies. plus, bearish ipo. 2020 brings the promise of debuts from companies like ir, and strength.

keys to the alfa bank castle. chime is now in charge. tech shakeups of the year. abigail doolittle is in new york to break down the top market action of 2019. it has been a massive record run that i continue to be astounded by. abigail: it has been a spectacular year for stocks in the u.s., really around the world. sector-wise, when a difference a year makes. sector-wise, when we think about a year ago, all 11 sectors lower, led by the defensive sectors, utility and real estate . this year, a completely different story.

up 48% on the year, it's best year since 2009. that of course was the year following the financial crisis. investors buying stocks hand over fist. that is the degree of buying power we are seeing perhaps that weakness last year has a lot to do with the buying power we are seeing this year. this year, nine of the 11 sectors up more than 20%. interesting, one consistency between last year and this year, energy was the worst sector last year. this year, up 7%. stocks on fire this year. taylor: abigail, we were showing a chart earlier about the amount . do you think this is poised to run further? on my end, that is all that i hear about.

abigail: that is a great question. i would say that typically these sorts of rallies, or if it was a correction, tend to go farther and longer in one direction then people think, but so does the sentiment. not too long ago, before the phase one trade deal, there was the that the rally would be broken. andhere was lots of worry uncertainty that the rally would be broken. we have earnings reports coming through, they have to be as strong as expected. recession. perspective,cal while it seems that many analysts and strategists expect the strength to continue, it looks like there could be a bit of a near-term breather. the markets are technically some willed so maybe

take chips off the table. many strategists leave 2020 will be fundamental -- believe 2020 will be fundamentally as strong as 2019. taylor: take a look at a chart here. andy, best for -- amd, best-performing stock of the year. they have had much better years, at 300, 350%. that really talks about the cyclicality around shifts. sinces only the best year 2015. as you are mentioning, up about 300%. point to make them also back in 2009, it was a less than two dollars stock. it is not that difficult for penny stock along those lines to double in that way.

this year, the rally needs to be taken probably more seriously than those picker gains. ceostors really like the and think she is doing a great job with this company continuing the turnaround. it will be interesting to see if they will be able to continue to meet and beat the numbers in 2020. sometimes, when everybody is on one side of the ship, that is when it goes in the other direction. taylor: well said. bloomberg's abigail doolittle, thank you for joining us. as you just heard, tech lead the in on bloomberg's scorecard 2019. look no further than the chip sector. it is not just chipmakers taking top performers, it is some of those older companies like applied materials benefiting

from some planning those parts. supplying is -- from those parts. joining us is ian king. what was the biggest surprise for you from the outperformance of the sector? amd.you already mentioned but the companies that make the machines that make the chips, they obviously did extremely well. for was kind of a rebound what had just been thought of as industrial companies, and now they are to -- now they are technology companies again. ,aylor: you had mentioned amd up 140%, up 300%. are they always this volatile? are they expected to remain this volatile? , a down yearast

would be losing money. in a good year, the margin goes shooting up. time,he bet is this investors have been believing is that the worst of the swings are over. of course, there will be up and down years, still cyclical, but the worst is over. taylor: we have been talking a lot all year on this program about the race for ai. is this behind some of the demand? ian: it is behind some of the perceived demand. many investors are making a bet gets closer to thereswitched on, yes, will be demand for these parts. there will be affect's -- there will be effects for the equipment maker's now.

it is a long bet being made. taylor: when we talk about demand, this is a chart where you know the story better than anyone. it is the stoxx index. we take an eagle's eye view. the frustration, i think, in 2019, we kept calling for bottoming out some of these memory chip prices. are we finally there? ian: who knows. memory, because it is commodity traded, very volatile by its nature and it always has been. bottom oncall the that market has not traditionally been a fun thing to do and has not resulted in people making a lot of money. that thing you are focusing on is very specific and very volatile area of the chip sector in general. some of the higher end radio

parts, you cannot just go and buy them in bulk. taylor: any sense that these companies are doing a better job forecasting some of the inventory and supply and demand dynamics that seemed to run the fundamentals of these companies? ian: they would say that they are. people who don't believe that are saying, you are just more cars,s, you are in appliances, so basically your ability for the market to crash on demand of one and product has been dissipated -- of one end product has been dissipated. that is the consensus opinion that the markets they are playing in have been more varied. taylor: that was bloomberg's ian king. thank you. largestp at china's

technology company, huawei. spookedctions have customers and suppliers around the globe. the trap of ministration has called huawei -- the trump administration has called huawei threat to national security. coming up, why uber and postmates are suing for what could be a landmark labor law. if you like bloomberg news, check us out on the radio, the bloomberg app, bloomberg.com, and in the u.s., on sirius xm. this is bloomberg. ♪ ♪

is the gig economy

versus the state of california. huber and postmates are suing california to block a new gig worker law. the laws designed to make sure workers such as uber drivers receive employment protection. huber says that the law unfairly targets companies like there is and will unfairly target worker flexibility. joining us now to discuss this and much more is mk and partners senior analyst for internet -- mkn partners senior analyst. how do you see that fight playing out? >> first and foremost, we need to frame this in a way, how uber and all the gig economy people are viewing this. they feel that a lot of people have been exempted. a lot of freelance workers have been exempted.

they have always been -- drivers have not been exempted. they have always been with this notion that we do not qualify for this ab-5 identification. when they sued california, that was a surprise. been,, the rhetoric has january 1, they will not be a lot of enforcement, they will go and thatallot in 2020, is what people are focused on. suing california today, in my opinion, is a surprise. they do expect more negative news starting tomorrow, possibly more lawsuits from drivers unions and likes like that. taylor: does it change anything in your fundamental analysis that was not priced in? the stock isat traded, a lot of the potential outcomes are priced in. now that they are seeking an

injunction, there may be bigger lawsuits, greater unionization efforts amongst drivers that uber has become aware of. andshare price, lyft doordash are not part of the lawsuit. back to september, lyft, doordash, postmates, and uber, each contributed to lobby to this ballot in 2020. only uber and postmates joined the lawsuit. aree lyft and doordash contemplating something else. taylor: take a look at a chart ipo, basically since the lyft and uber down 35%, 40%. was it something about lyft and

uber specifically? >> when they came to market, the rules were growth at all cost. when they came after the ipo, nobody told them that the rules are going to be changed. it is no longer growth at all cost, but we need to show the pathway to profitability. not just that, we need evidence that you are taking steps toward being profitable. have shrunk significantly. fundamentals are good. decelerating,, but fundamentals are ok. taylor: we have talked about lyft and uber hitting the ipo markets. i want to look back at 2019 and the botched ipo's we saw. peloton, pinterest, slack, all set to close below their ipo

price. was there something bigger going on in the ipo market or something about those companies? >> i would kind of frame that most of the ipo's were fundamentals and the market dynamics. how many shares are available to sell, buyers and sellers. a mismatch of probably 9, 12, 18 months. there are lockups, people selling after the lockups, then more and more supply gets unlocked. these companies are in that kind of timeframe. they will expect more kind of fundamentals and supply and demand to play catch-up. also, you wanted to see a pathway to profitability. five biggest ipo's of the year, trading below the ipo price, none of them are even close to being profitable. peloton is 2022, slack is

sometime in 2020. these companies need to show better unit economics. in on: i want to hone peloton specifically. another chart, you were talking about the supply and demand dynamics. you know what that has done to the share price. has gotten a lot of from theon recently treadmills, the bikes, the hardware is not new. what do you want to see from peloton in 2020? >> for this company to dramatically become a different , a much bigger possibility to sell to customers. streaming fitness

tech company. is the bikes being sold, that is 80% of their business. over the next 12 to 24 months, as more people download their mobile apps, more people pay the $10 to $20 per month subscription, that changes the business but happens more slowly. you are going to be sticking with us because up next is the list for those tech ipos in the coming year. will companies like airbnb, palantir, go public? bloomberg technology is livestreaming on twitter. this is bloomberg. ♪

taylor: tesla could meet its

vehicle delivery gulbis quarter thanks to a surge of sale -- delivery goal this quarter thanks to a surge of sales in the netherlands. almost four times as many registered this month as were sold there in november. tesla needs to hand over about 105,000 cars worldwide this quarter to eight the low end of its guidance for annual sales. -- two hit the low end of its guidance for annual sales. 2020 is sure to offer up big for the tech sector. kulkarni ofrohit mkm investors. what does your forecast look like? rohit: the way i would characterize it, there is a significant aging affect amongst private companies.

longer, staying private they are becoming larger on the private side. the only way they can get the liquidity is through ipo's. happen around&a's $20 billion. the stock market is at an all-time high. that makes the sentiment of the average joe more positive. i am not a macro guy but my crystal ball says that if this holds, we should see more ipo's in the next six month because we have elections and we have uncertainty in the second half. that is my crystal ball. again, we will see how things go. taylor: trying to round up the sentiment from analysts on the street. it is amazon, typically in the interviews i am doing, amazon is not in the top five. why amazon for 2020? thet: on the cell--- on

isl-side community, it amazon, facebook, google in no particular order. it is amazon, followed by facebook followed by google. they are investing a lot of money in same-day shipping. what is the return going to look like? ineel we will see returns the first half of this year with growth in some shape or form. perhaps investors can give them a pass on margins. the second debate is, can amazon hold its market share in the cloud? i think that is the biggest kind of debate. 6, 12, 18r the next months, what amazon has been doing from machine learning, mega workloads that migrate to the cloud from mainframes and very old data centers, that is

where amazon is doing a lot better compared to microsoft and google. that is where i am willing to bet that amazon again steps away from the cloud and continues to hold market share. taylor: picking the other two favorite children, facebook and google, i am showing a chart that is total ad revenue, google and facebook clearly number one and number two. are those the best two poised to benefit from a very constructive ad spend market? rohit: absolutely. they are having a symmetric amount of growth and a symmetric amount of market share from dollars going from offline to online channels. facebook and google both are multi-headed monsters. with more thans a billion users or eyeballs as you call it.

amongst the social media names, i like snapchat, where snapchat might be positioning itself as somebody who can take available share from twitter amidst all the political advertising debates going on. taylor: within big tech, antitrust, data privacy, do you shrug it off because the fundamentals are strong? rohit: i feel that the order, amazon, facebook, and google, the regulatory headwinds that each of these companies face, that is the order in which i feel the companies will have sentiment weigh on them amazon the least, facebook in the middle, and google with the most. the sentiment and the multiples, and that is why we call it that way. taylor: thank you to rohit kulkarni of mkm partners. coming up, alphabet in the new year with sundar pichai

officially at the helm. this is bloomberg. ♪

taylor: this is "bloomberg technology." i'm in for emily chang. it was a shocking change at the top, stepping down from their role at the parent company alphabet in early december. a new ceo has taken over. we also have mark, who covers the company for us. ago when they announced alphabet, when the

dust settled, it was obvious at pichai,nt, sundar google is 99% of the revenue for alphabet. , someone said it gives corporate structure to its reality. >> what changed for you a few hours ago? >> nothing at all. sundar has done a great job. well.ock is doing very it typically does well in on years and doesn't do as well in even years. performing, the relatively -- doing relatively well.

can you imagine if you founded the company 20 years ago and you are worth over $50 billion and you are -- there is a super capable person in charge? there's a lot of other things they get to explore. i don't think anyone is surprised. other things in life to do with $50 billion. taylor: do you see it as a vote of confidence in sundar? is it really just letting him take over and do what he does best? they're going to be advisors, i'm sure if he needs to make a call to them, they will pick up the call. i don't think anything is going to change. the up-and-coming businesses that are the next big businesses

are all equipped with their own operating teams. they are well-funded. some of the other businesses are super tiny and they've got a lot of great momentum. this is not a rudderless ship. they are more shareholder friendly with the action on the buyback. from a shareholder perspective, with the way we look at this, this is a terrific investment still. ,here is really no issue here this is more like headline exciting, but fundamentally i don't think anything is going to change. taylor: you heard fundamentally perhaps no changes. a statement saying the change will not affect anything.

what changes for him early tomorrow morning? alphabet was betting on was one ofgy, nest the big companies, and fast forward four years, google fiber has all but collapsed. critical about self driving cars. sundar has never run a biotech company. there's something almost symbolic of the fact that the founders who set the tone and the culture for this company for receded and now officially stepped away. so there are a lot of open questions about the rest of alphabet outside of google.

it doesn't say anything about the political pressures he has to wrestle with. taylor: the political pressures are clearly one of the big them.ngs facing all of tim cook at apple seems to have a good relationship with the president, working with him on tariffs. how do you see sundar in the context of a relationship with the president, or being too -- able to tackle antitrust and privacy that are overhanging the company? big platforms are under the same scrutiny. we cover amazon, they are all under the same microscope and have been operating under that for quite some time. i've said this repeatedly, having covered tech for 25 years and watching microsoft go through this, they have performed extremely well. you have to separate the noise from the reality. microsoft was a fantastic stock

to invest in in the turmoil over the regulatory overhang in your. stock is up 51% year to date. date. is up 24% year to do you want to be invested there? absolutely. the regulatory will always be there for everyone. it is what they do. they have been doing this for a while. we have been dealing with regulators for 15 or 20 years. i don't think anything has changed. the overhang creates more sentiment and that is great, because they keep putting up great numbers. when you have best sentiment, -- bad sediment, the numbers go higher. we revisited debut that didn't go as planned. elon musk took twitter by storm. conversation, next.

this is bloomberg. ♪

muskr: in november, elon unveiled tesla's long-awaited electric car, but it didn't go as planned. , the truck was the number two trending topic on twitter, not always good for publicity. reporter. our auto breakingbolic, glass is symbolically the tesla story, which is twofold. one is trying to disrupt the status quo. onlyould never imagine not the glass raking, but you rewind

a few moments before, you never imagine any company doing that. that's the one piece of it no ceo in their right mind would have done what elon musk did with that. secondly, its representative of elon, making some quick judgments that may not be in the , unfortunately you have to take the bad with the good. when i watched it, it was painful to watch. as i sat back and kind of processed it and was talking with more people about it today, i think incredibly you will think i'm tone deaf here but i think there was a silver lining because some people thought it was really funny. taylor: let me bring you in here. it might have been painful to watch, but the fact is, we are all talking about it today and we can't stop watching that video.

is that in and of itself a little bit of success for elon musk? >> i think so. i definitely don't think smashing the window was intentional, but i do think the sort of radical nature of the car, it has drawn everybody's attention. in that sense it is a great marketing success, i think. i even spoke to a professor of design here in detroit and he said he thinks it might actually be brilliant. the market will tell the tale, but it seems to appeal to a certain niche audience. taylor: let's talk about the appeal of that design. is futuristic helpful or hurtful for future buyers? thatfinitely not something appeals to traditional truck buyers. i think that's why you saw tesla stock fall today. i don't think anyone seriously thinks this will be a threat to

gm and chrysler. it is an interesting comparison, think about the hummer or the jeep wrangler. those are extremely functional, the hummer is in ugly but good-looking car that has an extremely strong cult following. elon has taken that even farther , extremely off-road, it might appeal to some people with the bragging rights that it provides. test a who buys this, a lover, or a truck lever? -- a truck lover? i think there will be an suv segment that will be captured with this. a tech forward type of person will initially be purchasing it. when we put it all together, this is how we think about the math. that itlling it 5%

could add to the overall business from that we can lawyer, techie type of person. , techie typerrior person. my sense was that it would be closer to $70,000, and ultimately the average selling price may be closer to the mid-50's. i think they are trying to open this up so it is relatively affordable, and ultimately it could account for 5% of overall deliveries for tesla. that's with a price tag $20,000 lower than you were forecasting, what does it do to the profitability? last time we spoke we wanted to see more vehicles to make up for a lower margin model three. where does this new truck it into that scheme? gene: i suspect this will be

toward the lower end of the probability. example at model y, for -- model y, that will run into component problems of model three. in this case, we have a whole new vehicle design. i feel like given some of the specs, i didn't see the interior of it, but my sense is that there will be some good value here, which is usually representative of a lower margin. the good news for tesla is they don't need the cash like they did two years ago. think two years away is so long that they don't have to that yet.t taylor: you heard a production target there of 2021.

do we really believe 2021? longthink tesla has come a way in terms of getting its production ramped up. also the other timeline to think about their is both ford and gm will be coming in 2021 with their electric pickup trucks. i'm sure he won't want to miss it by too much, because that's when the copycats will be out there trying to compete with him. taylor: that was gene munster and gabrielle coppola. sticking with tesla, elon musk did it again in november. this time it was for 200,000 truck,s for tesla's new despite the infamous launch. i think the truck does have

appeal, particularly to younger people, to people in l.a., to gamers. some at first said they hated it but over the week they said they loved. he looks like nothing else on the road. even though it is far from production, i believe they have vision. taylor: i cannot stop watching the video of shattering that glass. what was the reason they have come out with in the last few days as to why the glass shattered? think ire not alone, i have watched it 20 times. showingline weeded out testing the glass before that demonstration. yesterday when they hammered the car with a sledgehammer, that somehow could have hurt the glass. why thesn't explain window also shattered. taylor: my producer and i were

talking about this, and he said why when you want your window to? ? be able to shatter in an emergency situation if you're underwater or something, wouldn't you want to be able to get out? >> that is a legitimate question. an emergency, how do first responders break the glass? taylor: we will have to continue to monitor that. i want to talk about another statistic in your story, you price aboute in $40,000. it looks like there was an upgrade from dual engine models. walk me through the composition of what we know. 42% ofe said reservations had ordered the rest sort of the the $60,000. you can't really configure the

car until closer to production, which is still a few years away. it showed that people are pay and there's not that much upside for the lower inversion -- the lower end version. taylor: they have a really good given that cash flow had turned positive and they are more profitable right now. this gives them more time to go back and look at that production target. do you agree that they are in a decent position to look at the cyber truck and production? dana: the ford f1 50 is the number one selling vehicle in america. this had a positive run. they had that surprise third-quarter profit. taylor: still ahead, we look back at the rollout of the

canadian rival to tesla with that much lower price tag. more on that, next. this is bloomberg. ♪

gets the lion share of attention among electric carmakers, but there are plenty of countries in the ev market. canada is rolling out a new battery-powered vehicle with the price tag of only $15,000, and it's a little different. we got an inside look. tesla,electric, like a priced like a ford fiesta, and one of the weirdest looking vehicles you have ever seen. >> a clean energy electric .ehicle for one person >> the three will vehicle cost $15,500 and is being handbuilt

in vancouver. to meet demand, it's going to mass produce updated model in china. >> the concept is to have a vehicle that can be assembled quickly, efficiently, and is high quality come in under three hours. >> the solo has 100 miles of range and charges within three hours. says 83% of north american commuters drive to work alone each day. the question is whether those commuters would be prepared to drive to work in something like this. notcompanies optimism is backed up by the numbers. >> seven out of 10 consumers want to buy a truck at this point. i think you are limited to a very specific user. >> but there are areas bloomberg intelligence sees as more promising.

some are already testing for delivery. why is the second seat there? since thehave fallen company's ipo last august. the ceo says the solo will be profitable. company hopes to deliver in0 china produced solos 2019 and another 20,000 in 2020. general motors announced in october it was closing a website with more than 100 years of manufacturing in canada -- closing a site. they're finding more passengers for the sporty electric roadster. ed ludlow, embarq news, vancouver.

-- bloomberg news, vancouver. can the upper end established players like delta? emily chang in april. emily: imagine you want to take a quick flight for business. instead of navigating huge terminals, you could have a private flight experience, all with the touch of an app. there are two startups and a flock of companies pushing the private flight industry forward. ourselves in the same vein as on-demand transportation companies like uber and lyft. we just take the journey a little bit further. focused oncompany is the journey. it announced a funding round recently. underutilizedly

asset. when we start to amortize the cost basis it will enable a lot of pilots who want to fly, you create a flywheel of increasing adoption. emily: a silicon valley unicorn valued at $1.5 billion advertises semiprivate flying with not so private fares. together,assengers offering fights between short-range destinations. other private aviation companies offer the private flight experience by putting passengers on empty x -- empty legs of private jets. right algorithm you can make money from the inefficiencies in private aviation. airlines.perating

emily: like established airline delta offering private flights as well as discounted empty leg flights. >> you have the technology component of the nine aviation craft that can grow by leaps and bounds. we have not seen the regulatory regime keep up with a lot of the tech innovation. some were shut down in 2014, but blackboards pilots are -- like birds pilots are commercially certified and meet federal regulations. the charter industry has grown to reach revenue of $25 million. emily chang, bloomberg, san francisco. taylor: that does it for this

edition of "bloomberg technology." "bloomberg technology." is livestreaming on twitter. check us out and follow our global breaking news network on twitter. this is bloomberg. ♪

eñ david: he grew up in a trailer park in florida where his parents apart to bus. that is modest means and circumstances to cannot get in his way of his dream to become a doctor. at do, paul farmer discussed justice -- studied at apology. before harvard medical school he took a one-year detour to haiti where he saw friends die for lack of resources and adequate medical care. tot spurred paul farmer create partners in health,