taylor: i'm taylor riggs. this is the "best of bloomberg technology" where we bring you all of our top interviews from this week in tech. coming up, earnings results from big tech. we bring you the latest from apple, amazon, facebook, tesla , and microsoft. new evidence raises fears the coronavirus could spread undetected. we'll head to a biolab where researchers are working on anybody's -- antibodies.

and tiktok has a new rival in the u.s. and we'll show you the hot new video sharing app that has sky rocketed to the top of the app store. but it is tech earnings season this week with results from the industry's biggest names. let's start with one of the top performing giants. apple. apple reported their highest quarterly revenue ever thanks to strong iphone sales. iphone revenue was $56 billion compared with the average estimate of $51.5 billion. this looks to be the second highest ever iphone's quarterly revenue. to get perspective, paul allen and i were joined by forester analysts. >> i view this as a game changer quarter. maybe a billion and a half. the rock of gibralter. i think this is a stock that is going to continue to go up.

i view this as a best case scenario. taylor: julia, let me come to you on this. it seems like the iphone revenue was all that we really cared about this quarter, make sure it was so dependent on the iphone revenue coming in strong. your take? >> that is always going to be the case when you have one product that is as dominant as part of their portfolio. it helps give it a boost, especially during the holiday season. >> julie, look at the iphone though. the revenue was very impressive for quarter. is this really a sustainable way for apple? >> i don't know if apple would

call them incremental upgrades. one of the things is we look forward. a lot of the upgrades you will see in hardware will appear to be incremental. there is only so far you can go with cameras and displays. when you're depending on acquisitions and r & d, when they continue to make a new acquisition every two to three weeks, their spending on r & d is going up. i think we'll continue to see improvements where it may be hard for consumers to articulate why they like it better. just that so many little things work so much better. taylor: now facebook earnings came out wednesday. total revenue up 25% year over year which appears to be the strongest growth ever. last quarter, facebook revenue grew 29% year over year. for more, we spoke to an e-marketer analyst in seattle. >> facebook grew at exactly the rate we thought it was going to grow in 2019.

so we're not worried in that respect. it is exactly where we think it is. we're expecting continued growth next year. everything is slowing because of some of the issues that facebook has been dealing with on a quarter after quarter basis regarding privacy and regulation, content moderation, political advertising, all of these things are still weighing on the company, but overall, i mean i think things are still growing and on another note, the users are ahead of where we thought they were going to be for 2019. this is a company that is continuing to chug on. and perform quarter after quarter. taylor: every analyst on the street was excited about facebook in 2020. you have the political ads. olympics. a very strong backdrop of an ad environment. is this more of a later 2020 story when we could see a pickup in revenue then? >> we're seeing it throughout the year. our forecast is only -- we don't

forecast on a quarterly basis. we look at a year-end total. we think ad revenue is going to increase by 22% on a worldwide basis this year. you're right. political advertising is a part of that. it is not a huge portion of facebook's ad revenue. certainly things like the olympics will add a boost. it is your average advertiser who is continuing to spend on facebook because of the accurate targeting, because the audience is still there and because its sister property instagram is also still growing. >> overall, these results don't look too bad but we do have it down 7% after hours now. i get the sense we're all groping around to find reasons for that. what is your theory? >> any marketer we follow revenue and usage for at facebook, the market, the stock market is not something we directly comment on. all i can say is that we really believe that facebook has proven itself, at least according to

our forecasts, on the revenues. it has beaten our forecast for numbers in terms of number of users this year. this is a when a where even though it has had problem after problem, it is continuing to outperform the estimates that are put out for it. so it is hard to say exactly why the market is down at that point. taylor: thanks to deborah of e-marketer. now to tesla reporting better than expected revenue and the accelerated arrival of its next electric vehicle, the model y. its other vehicle, the model 3 brought in almost $7 billion in sales beating estimates. all of this leading the company to its second consecutive quarterly profit. that sets a pattern with first half losses in each of the last two years giving way to positive results. a big prediction for this year, 500,000 vehicle deliveries in 2020. new street research's pierre

joins us to discuss. >> it is so impressive to see that the fourth quarter generated a billion -- more than twice what wall street was expecting. it is still like 30% higher than what where we were anticipating and so that means tesla can start a new factory in the quarter. keep ramping. the second thing i find absolutely amazing in what we learned today is that tesla managed to ramp a new factory with stable growth margins. that means the underlying growth margin has continued to expand in the fourth quarter. that is how it is doing in terms of margins to doing better than that in just three months. >> let's talk about the new

factory in shanghai. one thing that is bound to come up in the analyst call when it gets underway in about 45 minutes is cost discipline and specifically the cost of that new china plant doesn't appear to show up in the financials. what is your opinion of that? >> so as you can imagine it is probably the one question that will ask on the call in 45 minutes. what we know is that the dimension of the ramp, of the factory affecting the gross margin. we know it is there in some shape or form. the one thing i can tell you is the ramp of the factory, in 2017, in the first quarter, like getting into the numbers, in the order of $150 million. that might be the kind of -- where it is exactly, the team is working on it.

taylor: what question are you asking on the call? >> well, i think we just got probably the one that comes first to mind which is -- the ramp of the shanghai factory so that we can evaluate growth margin of the company. that is what is going to give you the best indication where the growth margin is heading toward the end of this year. taylor: that was pierre of new street research. coming up more on earnings. , we'll take a look at amazon's fourth quarter results next. if you like bloomberg news, check us out on the radio, you can listen on the bloomberg app, bloomberg.com and in the u.s. on sirius xm. this is bloomberg. ♪

taylor: the latest to report earnings was amazon. the e-commerce giant's cloud revenue was taking a bite of the of its robust holiday earnings. amid intensifying competition from microsoft and alphabet, a.w.s. is spending heavily on new data centers and hiring thousands of salespeople and engineers. we spoke with a cfra analyst. >> i think there were several positive takeaways in the quarter. the revenue number was above expectations and guidance. more importantly, the operating number really blew away all analyst expectations, including ours. even more remarkable, the fact that they were going into the holiday season really spending heavily on the one-day shipping. that was really remarkable against those odds. and i think the amazon web services business continues to

hold its own in the face of competition maker soft cloud offering. we know microsoft has been getting market share. i think it has gotten investor'' attention in terms of deceleration growth but i think this quarter they really answered all doubts coming at 34% growth in a top line and 26.5% operating margin. we're seeing amazon web services at the forefront of a lot of technology and innovation. you look at other areas, prime membership growth, why they don't disclose those numbers. you get a sense that the holiday season was a major catalyst for that with the one-day shipping. a lot of positive takeaways across the board with remarkable execution here. >> amazon web services was the one that was going to be watched closely. expectations were firmly managed

there to say the least. still surprising. what does it need to do to remain competitive against microsoft and google without spending unsustainably? >> i think they are actually doing what is within their control. the biggest upside that i see is the international market. some of these fast-growing emerging markets like india being a notable callout there. losing the pentagon cloud infrastructure contract to microsoft was a big blow. this is a huge addressable market that will be big enough for the three major players of which amazon is still the dominant player in that space. despite the competition from microsoft and google cloud. this is a business that i think is going to hit probably around $40 billion revenue pretty soon

and you can envision a.w.s. as being a huge chunk. potentially apple and the equity evaluation of amazon stock. the milestone over a trillion really says a lot about the potential upside that we see here. taylor: i want to take a look at a chart i'm seeing in my terminal. if you think we are in the early stages of cloud growth, why are some growing at 33% year over year when microsoft is at 39%, 40%, 60%? >> that is a question we get a lot from investors. i think a simple answer here is the law of large numbers. a.w.s, several orders of magnitude, the size of microsoft cloud that really answers the question. that being said, there is a lot to be said about how microsoft's cloud zurich offering has reinvented in this area.

they are doing a lot of things right. also amazon's kind of quibbles with the trump administration and the pentagon did not help its perception. all in all, it is still, the market is still in the fifth inning of growth. there is a pie there that i think should serve its three dominant players very well, especially the early movers like a.w.s. and microsoft. taylor: finally, i want you to come take a look at another chart i'm showing in my terminal. this is as of close on thursday. it is not yet reflecting the post-market movement. if it were, this would be a trillion dollar company. is that evaluation justified? >> you know, i think so. that is why we kept our buyer recommendation, in the face of all the chatter with the

anti-trust and government investigations. i think keep in mind this is likely to be a volatile stock in the year ahead as we head into the presidential election year with all the potential chatter about the anti-trust. this is a name that you know what you're getting into. but the core of business remains intact. the shift to, you know, enterprise cloud and you see the cutting edge of some of these innovations with machine learning and artificial intelligence. 40 million active users as of this past quarter. you get a sense it is building a big ecosystem. and alexa and echo. also it doesn't hurt they just got seven or eight golden globe nominations. they are getting some traction with the prime video business. going head to head with netflix and hulu.

taylor: that was a c.f. analyst. amazon's cloud rival microsoft reported second quarter earnings beating profit and sales. cloud demand is continuing to dominate. we spoke to an analyst glen o'donnell from forester in new york. >> microsoft is the fastest growing player in the cloud computing field. amazon is still the big dog in the fight. microsoft come off very strongly. a clear number two player behind a.w.s. and everybody else bringing up the rear. 62% growth with azure is pretty astounding with cloud computing. we don't see that slowing down at all for the near future. >> in terms of that enormous contract from the pentagon, $10

billion, is there now an expectation that microsoft will continue to deliver big deals like this? how much more upside is there? >> a lot of it is derivative off that. when you win a big deal like that, everybody wakes up and says there must be something going on there. let's check it out. indeed that has happened. there are a number of sectors that have gone, that pretty strongly with microsoft as a cloud provider. will there be more big deals like that? we doubt that there will be gigantic deals in cloud. it tends to be a bunch of really small deals adding up. occasionally you get something like this. that jedi contract with the government, $10 billion over a certain amount of time is a lot of money but mostly i think so it is just raising awareness that microsoft is a real serious player here and indeed it is. taylor: personal computing revenue also coming in better. is there something specific

microsoft is doing or are we just in the midst of a bull market within personal computers? >> there has been a lot of refresh from computers lately. the older systems are slowing down and people want to get new computers. most of those are running windows. the growth there is probably attributed mostly to that. at the end of windows 7 support, a lot of people were sort of forced into going with a new machine to support windows 10. so that is probably part of it there. taylor: thanks to glen o'donnell. analyst at forester. later, nations around the world are taking drastic measures to stop the spread to have deadly coronavirus. we'll go inside one biotech firm where scientists are racing to create antibodies, next. plus tiktok has a new u.s. rival. it's a reboot of an old favorite app, vine. we'll take a closer look at it next. this is bloomberg. taylor: online mattress retailer ♪

taylor: online mattress retailer casper is seeking an i.p.o. valuation just over $744 million, a drop its heyday of $1.1 billion. in a regulatory filing monday, the start-up plans to sell 8.35 million shares for $17-$19 each. this makes it short of the $1 billion needed to be a unicorn company. founded in 2014, casper popularized the bed in a box industry.

i was joined by liana baker in new york to discuss the first closely watched i.p.o. of the year. >> it is about a 30% drop and it is all about the timing. that $1.1 billion evaluation that casper had came in march 2019 that was before the debacle and the aftermarket performance of uber, lyft and peloton. it makes sense advisors on the i.p.o. are trying to tell the company why don't you have a more conservative valuation to appease investors who have more scrutiny for these companies? taylor: is this being seen for future internet startups who are trying public as well? >> definitely. we're still in january. it is going to be a long year ahead. it is the first consumer brand name. we have seen the advertisements. casper is everywhere.

if it performs well, it could mean companies like postmates and door dash and other unprofitable names known by consumers on advertiser lots will see whether it is warm out there in the market for them to also go public. taylor: the biggest issue is everyone thinks they have a website. now they are a tech company. now they want the evaluation of a tech company. is this a tech company or a mattress kean? >> it is a good question. you see it is a tech enabled business. there is an r & d center in san francisco and they are trying to develop new products besides mattresses like special lights you put by your bedside. the company is investing in technology. at the end of the day, they make mattresses and open retail stores across the country. it is one of those companies that is a hybrid. it is in the eye of the beholder whether it is valued like a tech company or a consumer company. it harkins back to the meal kit craze.

you might remember blue apron, hello fresh, all those companies. were they tech companies or consumer companies? it is hard to say. taylor: should we be comforted by the fact that revenue grew 20% in losses only 5% in the same time period? >> there were some highlights in the i.p.o. filing in the financials. it has pretty good margins in the high 40% range. it does make money off of these mattresses. its retail locations are very profitable so it is making money. it is just right now not able to turn a profit and it may never turn a profit which is something pretty common in a lot of these i.p.o.'s. taylor: have they given us any hint, could they be profitable if they wanted to? >> there is no indication but investors might want to look at purple, one of their rivals that went public a few years ago through a reverse merger i.p.o. that company is profitable. i'm sure casper would like investors to look at that as a model for them.

taylor: we only have about 30 seconds. the rollback of the volcker rule means you can be more lenient within a venture capital world. do you assume more money flowing into v.c.'s and startups and creating more private lofty valuations? >> banks have been investing in startups for a long time. this is a new avenue for them to invest directly in venture capital funds. it has been in the works a long time. we'll see, but will goldman sachs investing as much as softbank and private companies in venture capital? probably not, but it is something to watch. taylor: that was bloomberg's liana baker. coming up later, is the u.k. setting itself up for conflict by giving huawei access to 5g network? we'll find out. and bloomberg technology is live streaming on twitter. check us out at technology. be sure to follow our global breaking news network at quick take on twitter. this is bloomberg. ♪

♪ back to the best of bloomberg technology. i am taylor riggs. as they corona virus continues to spread, companies are taking steps to safeguard workers from the outbreak. tocolleague and i spoke biotechnologies. on thursday we spoke to the president of r&d, gregory glenn. has recently started development of a new vaccine. powerful and productive platform to identify

anti-bodies. anti-bodies are proteins that circulate in her blood and protect from viral infections. we are able to isolate anti-bodies from patients who have recovered from an infection, manufacture them, modify them, then make them available to other patients. this technology has been fruitful. the -- one of the earliest examples is an antibody against the ebola virus. we isolated that anti-body. it is now being tested in the showing the nih and is -- proving effective. virus, dengue virus, malaria and others. taylor: it is interesting you bring these up. we spoke about star back in 2003. -- sars back in 2003.

what have you learned from that that has helped you battling the coronavirus? number of a antibodies that we have isolated against sars. those are both corona viruses. our scientists intesa painted that it was only a matter of time before the next coronavirus outbreak so we were already testing those anti-bodies. not all of them, but some of fightave the ability to the coronavirus in other animal species, so there is a possibility they could also come back to the new wuhan virus. we do not yet know the answer, but our hope is that one or more of those entire bodies will be effective. if not, we are simultaneously going back and isolating new anti-bodies pacifically against the wuhan virus and we are

pretty confident that we will be able to generate those anti-bodies. we will get there one way or another we hope. you havewhat do learned about the coronavirus so far, what could you say about its potential for getting worse or could we end up in a situation where like sars it effectively disappeared? hoping thatre all it behaves like sars and will eventually disappear. it early data suggests that is actually considerably more infectious than sars, perhaps less lethal than sars, but more infectious. as your report indicated a few minutes ago, there are already more cases of patients in -- with the wuhan virus then there were with sars. we are hopeful that this like many virus outbreaks will be

self-limiting, which would be great, but we are working very hard to bring our antibodies forward encase that is not the path that it follows. >> is it important to keep some perspective here during these crises? they generate a lot of fear, but it is worth remembering that the said the common flu kills half a million people each year. george: that is a very good chance -- point. in the u.s. right now you have a better chance of dying from the flu then from the coronavirus. the flu kills thousands of people in the u.s. every gear and for that reason we have a very interesting anti-body that is capable of neutralizing all strains of influenza a that have arisen since the 1918 pandemic that we are currently testing in humans. we hope to be able to get

efficacy data as early as this year to determine to what extent we can reduce the records the of flu infections. it is a paradigm for what we hope to be able to do with the coronavirus as well. taylor: today the cdc confirmed the first person to person contraction of the coronavirus. what does that tell you? what information does that give you as you work on a potential vaccine? >> we are a vaccine company. we are local but we think globally. the u.s. is certainly an important priority, but we know that this is transmittable. it does not respect borders. again, it is very much like what we see with flu every year. taylor: why would a vaccine be better than an anti-dote, and anti-body?cho -- would beti-bodies that

scaled up and manufactured originally came from an immune response, so the anti-bodies i think are mostly going to be deployed if someone is sick. that can be quite challenging. it is not necessarily a given that that can work. he say in our field, if the cows are out of the barn, it can be very difficult to get them back in. pending on how sick, how far into the illness someone would sick, depending on how antibodies may not be useful even -- especially for these respiratory illnesses. --is not really clear whereas vaccines have a good track record. i used to be a pediatrician. vaccines are almost miracles in terms of being able to prevent serious disease. that is a very desirable outcome. if we could develop it.

our challenge is can we develop one in time to be relevant? i think we can, but that is -- that has yet to be seen. we are working very hard to see if we can achieve a good vaccine within the timeframe that it could be used. taylor: that was dr. george and dr. gregory glenn. still ahead, tictoc faces competition as iphone fans try to download a new name -- byte -- this week. a review of all the big tech earnings this week. this is bloomberg. ♪

taylor: u.k. prime minister boris johnson risks a clash with

u.s. president donald trump after giving huawei the green 5ght to help build britain's network. it is a blow to the trump administration who wanted johnson to an -- impose a ban on the chinese network. alex webb has more on the news from london. forth,r a year back and the u.k. has decided it will allow huawei to provide the telecommunications equipment for its new 5g network. johnson is imposing major limitations. the telecoms operator will not be allowed to use huawei technology in the main -- core network. to 35%well be limited market share. it is a sensible compromise

because telecoms communities were afraid that it -- this u.k. approach will mean that operators can still pick between three main suppliers, which accounts for more than three quarters of their equipment cost. it cauterize is the most sensitive parts of the network from huawei. shenzhen company -- a law was introduced in china three years ago that compels the company to assisted the government with sabotage efforts. the european union -- of internaloner marketing services is expected to unveil similar guidelines as the decision in britain. taylor: that was alex webb. the new rival of tictoc has emerged and its predecessor is no stranger to fans of the video

sharing apps. it was created by dan hoffman who cofounded vine in 2012 and sold it to twitter later that year. vine rocketed to the top -- bloombergo our opinion columnist in new york. >> that is the thing with the vine. it was only -- twitter took it over and try to run it but it never quite worked out. one of the reasons it is considered that vine was shut down was because they could not monetize it. the people running vine at that time were opposed to running branding ads, so it died a slow painful death, but is still really strong in people's hearts and minds. people have a certain amount of nostalgia for vine. dan hoffman originally called it v2 when it was in alpha mode last year. now it has hit the street so to

speak under the very interesting name of byte. it -- it is tictoc's rival and tictoc is owned by bytedance. >> they came -- name cannot be coincidence. tim: the very fact that we mentioned that they are almost the same name really is the kind of thing they are looking for. they're looking for that virality. there hoping for people to remember vine with nostalgia but also think of bytedance. examples of the few a chinese company having a big impact overseas, especially north america. maybe it is coincidence, maybe not. certainly people are talking about it. yte andmats between b

tictoc are different, but users will use both over time and have one preference over the other in the same way that people have a preference for snap over instagram. what is important to remember about byte is there fighting to get -- they are fighting to get key creators on. huffman's aim in bringing this back? in their committee guidelines they keep emphasizing that they have a modest budget. are they trying to make money off of this or is it just tim: tim: for the nostalgic? i think he is -- just for the nostalgia? trying to makes money off of it. people who are really big on tictoc now probably do not even remember the vine. use the clay, which was the predecessor to tictoc --

musically,, the predecessor to tictoc -- the implications for tictoc here in the u.s.? we know they are under cfius review. they are trying to rebrand their ownedas a company that is by another company that is based in beijing. is tictoc nervous about this new competition? there is a counterintuitive way to look at it and that is if tictoc keeps coming under scrutiny about having so much control over user data, they could turn around and look at are not the "we only ones around." it helps to have a solid competitor out there. maybe they will steal a little advertising money, what if they

are looking at the regulatory framework, this might be a good tiktok.r byte and for byte the older audience of -- the older demographic an explanatione for its simple interface? >> we're talking like 25 and above is a "old" demographic. there is room for both. they will find the demographic that works for them. taylor: thanks to bloomberg opinions tim culpan. the earningshear from the tech giants this week. that is next. this is bloomberg. ♪

taylor: wrapping up a big tex big week in reporting quarterly

earnings results. ceo tom cook said tuesday the company has closed more stores in china as the coronavirus spreads. tesla is expecting a production delay in the country. for more we spoke to -- >> the overall numbers are starting to get incredibly large here but the total addressable market for cloud services is being completely underestimated by basically the entire market, which is why you continue to see investors chase stocks like microsoft up here because as you are is growing like a weed -- azure is growing like a weed. i don't think people recognize how large the market for all of these services will be when you look at broad macroeconomic trends like a capex spending in replaced it is being

by spending on software. the total addressable market is high. why are they not seeing higher than 34% growth rates? >> at the end of the day, they are dealing with two big competitors, apple and microsoft. ise i said, that growth rate going to match the growth rate of large productivity suite software packages and some of nowe big companies are seeing growth rates in the 30 to 40% range year-over-year on the top line. there are a lot of other smaller productivity software names that are growing 60%, 70% year-over-year and we will continue to see startups that make it big and continue to come to market with $5 million, $6

million ipos and above. we just saw data dog come to the market with a very successful ipo. a wave of these will continue to come out, but the really big players -- these are mature businesses now, but i think we can be very happy with the fact that they are still growing 20%, 30% year-over-year. >> i want to focus on one of the low lights -- that is the international arm of the business. amazon was expected to arrive on the retail zine -- seen like godzilla and basically sank without a trace in australia. leigh: the funny thing with amazon is a from quarter to quarter, the bottom line numbers tend to really matter to investors here, but in any given quarter, it is hard to tell what they are spending money on and how much money they will spend, which obviously really impacts the bottom line.

international has not been a big part of the business to date, but they will continue to invest in all of these different attempts and that is why at the end of the day amazon continues to have long-term success, although short-term is very hard to call those cso i numbers all the revenue they basically blew out of the water again this quarter. >> one day delivery has been a big thing for amazon. headcount has risen. costs for that have risen as well. can that continue? leigh: there are giving them a long leash to spend whatever they want -- the markets basically say they can. they are giving them a long leash to spend whatever they want. if you are an investor here, are you going to prod bezos on how much he is expending on this attempt or that attempt? at the end of the day, he has

proven that he is able to make enough of these big bets into winners, even though he admits that if you are not losing big on some of these, you are not going fast enough or betting big enough. i think the fact that some of these businesses are seeing rising costs and obviously you see that with wage growth in the u.s., they put up a really big number relative to what everyone was expecting. >> in terms of exposure to the coronavirus, how does it shape up? apple address to this in their earnings call. -- addressed this in their earnings call. leigh: it is better that it happens now than in four or five months from now when apple will be seriously ramping up the 5g pipeline. thenr that it happened now it won't disrupt their ability to put product into the market. at that point, obviously more

broadly on a macroeconomic scale this will have a significant impact given how much everything is leveraged to chinese growth, which will come down significantly. for tesla, it may be more acute, but we do not know exactly what that will look like now. it does not look ace to on how tesla is a trading right now, that they are discounting deliveries, especially in china as the stock continues to rocket. expectations for revenue for this current quarter continue to take up for tesla. up for tesla. >> elon musk enjoyed burning the shorts again yesterday. concernsad with these over the coronavirus, the uncertainty over tesla's supply chain, could the short person -- couldhe short laugh --

the short have the last laugh? musk made it.ly he arguably committed securities and accounting fraud, but he got through that and put up the numbers that were needed to get .he company to profitability that company is seeing tremendous profitability -- momentum. if the growth gets disrupted over the next couple of quarters, i do not feel that ding him will doing -- for that given that he has proven that the business is profitable. taylor: that does it for this edition of the best of bloomberg technology. we will bring you all the latest in tech throughout the week. york,n each day, 5:00 new

2:00 san francisco. check us out at technology. follow our breaking news network @qquick take on twitter -- uicktake on twitter. this is bloomberg. ♪ sometimes your small screen is your big screen.

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♪ > welcome to bloomberg businessweek. i am carol massar. this week it is all about the super bowl. the game will be played at hard rock stadium in florida. we catch up with tim allen. >> i sit down with chris paul. we talk about bob iger and learning how to say no. carol: if you have