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 anti-bodies. 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. they 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. aybe 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 eason. >> julie, look at the iphone hough. 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. t 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. hat might be the kind of

cost we happen to be looking for. 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. come up, more on earnings. we'll take a look at amazon's fourth quarter results ext. 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 hat 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 ffering. we know microsoft has been getting market share. i think it has gotten investors' 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 nnovation. 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 icrosoft 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 ere. 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 -- the 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 ntelligence. 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 usiness.

with original content creation 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 ork. >> microsoft is the fastest growing player in the cloud computing field. 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.

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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. and all niece unprofitable internet companies that did not impress investors. 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. hat 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. ♪

taylor: welcome back to the best of bloomberg technology. i am taylor riggs. as the coronavirus continues to spread around the world, companies are taking steps to safeguard workers from the outbreak. my colleague and i spoke to a doctor from a biotechnology company in san francisco on wednesday. novavax initiated development f a potential vaccine. >> we have a very powerful and productive platform to identify anti-bodies. anti-bodies are proteins that

irculate in your blood and protect from viral infections and can help overcome viral infections. we are able to isolate antibodies from patients who have recovered from infection, manufacture them and make them available to other patients. this technology has been quite fruitful. one of the earliest examples is an anti-body against the ebola virus caused -- called mab114. there are tests in the congo by the nih. we feel very good about that one. >> it is very interesting that you bring up some of these viruses. we talk a lot about sars back in 2003. what have you learned from those viruses that can help you with this strain of coronavirus

and how to get a vaccine out of t? >> we have a number of antibodies we have isolated against sars. those are both coronavirus's. scientists anticipated it was only a matter of time until the next coronavirus outbreak. we have been testing those anti-bodies for their ability to neutralize other strains of coronavirus. some of them have the ability to neutralize strains of coronavirus isolated from ats. there is the possibility they could also neutralize a new coronavirus. we are testing the possibility now with a number of anti-bodies. we don't know the answer yet but our hope is one or more of those anti-bodies will be effective. if not, we are simultaneously going back and isolating new anti-bodies specifically against the wuhan virus and we re pretty confident we will be

able to generate those antibodies. it might take longer but we will get there one way or another. >> given what you have learned about the coronavirus so far, what can you say about its otential for getting worse, or can we end up in the situation like sars were ineffectively disappeared? >> i hope it behaves like sars and will eventually disappear. he early data suggests it is considerably more infectious than sars, perhaps less lethal, but more infectious. there are already more cases of patients with the wuhan virus hen there were sars. we are hopeful that this like many viral outbreaks will be self-limiting, which would be

great. we are working really hard to bring anti-bodies forward in case that is not the path that follows. >> it is important to keep perspective because they do generate a lot of fear. it is worth remembering the flu killed over 500,000 people. >> i think that is a really good point. in the u.s. right now, you have a higher chance of dying from lu then the coronavirus. the flu can be a fatal disease for many people. it kills thousands of people in the u.s. every year. for that reason, we have an anti-body also that is capable of neutralizing all strains of influenza a since the pandemic that we are currently testing in humans. we hope to be able -- as early

as this year to determine to what extent we can limit flu infections. it is a paradigm for what we hope to be able to do with the coronavirus, as well. taylor: 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 potential vaccine? >> we are a vaccine company. the u.s. is certainly an important priority. we know this is transmissible and a dozen really respect borders. it is very much like what we see with the flu every year. >> why would a vaccine be different than an antibiotic? >> that is a really good question.

they are related, of course. the anti-bodies that would be manufactured originally came from and a response. the anti-bodies will mostly be deployed if someone is sick. that can be quite challenging. it is not necessarily a given that would work. in our field, it is said if the cows are out of the barn, it can be difficult to get them back in. depending on how sick, how far into the illness someone is, anti-bodies may or may not be helpful, especially for respiratory diseases. i think it is something that should be developed. it is not really clear -- vaccines have a good track record. vaccines are almost miracles in terms of being able to prevent serious disease. i think that is a very desirable outcome. or challenge is timing.

can we develop one in time to be relevant? i think we can. that is yet to be seen and we are working very, very hard to see if we can achieve a good vaccine within the timeframe that it could be used. taylor: that was a doctor from biotechnology and a doctor from novavax. still ahead, tiktok faces competition as fans tend to download a new name this week. later, a review of all of 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 light to help build

britain's 5g network. it is a blow to the trump administration that wanted johnson to ban the tech giant. alex webb has more on the news from london. >> after a year of back-and-forth, britain has decided it will let huawei to provide telecom equipment for its 5g networks. boris johnson encountered strong opposition from the u.s., where huawei is already banned. johnson is imposing major limitations. the telecom operators will not be allowed to use huawei products in the core network. in the other network, huawei will be restricted to 35% market share. it is a simple compromise. they believed the reduced competition would lead to price gouging.

the u.k. approach will mean operators can still pick from three main suppliers for the network that accounts for more than three quarters of their equipment costs. it caught arises the most sensitive part of the network from huawei. no evidence has been presented it provides backdoors for actors, -- espionage efforts. this is a deal the u.s. should be able to get behind in private, if not public. the commissioner of markets and services is expected to unveil imilar guidelines. taylor: that was alex webb. a new rival of tiktok has emerged and its predecessor is

no stranger to fans of video sharing gaps. it was created by the person who also cofounded vine in 2012 and sold it to twitter. it is among the top abs and iphones app store in the u.s. this week. we spoke to our bloomberg opinion columnist in new york. >> that is the thing with vine, or bought it in less than one year. twitter tried to run it but it did not quite work out. one reason it is considered that vine was shut down by twitter is because they could not monetize it. it eventually just kind of died a slow, painful death. it is still strong in people's minds. there is a nostalgia for vine. he decided it would be brought up. it was called v2 before being elayed and now it is hit the streets so to speak under the nteresting name of byte.

tiktok, its biggest rival. that is not a coincidental man. >> talk to me more about that. the name could not be a coincidence. are they trying to be a competitor through the name alone? >> the fact we mention their almost the same name is the kind of thing they are looking for. they are looking for people to remember vine with nostalgia but also think of tiktok. it is one of those few examples of a chinese company having a big impact overseas, especially in north america. the name, well maybe it acquisitive, people are talking about it. the format between byte and tiktok are different but there are a lot of similarities. consumers will be using both of the same time.

over time they will have a preference for one or the other, in the same way some people had a preference for snap over instagram. one thing to remember about the new product, byte, is the are trying to get influencers. the battle for tiktok and byte to get key creators will be intense. >> what is in aim for bringing this back? they keep emphasizing they have a mod assist -- modest budget. >> i think he is trying to make money. there was a feeling vine was great and when it went away people were heartbroken. the people are really big on tiktok now probably don't remember the vine era. very similar age. in terms of demographic of tiktok, it is very young.

>> what are the implications for tiktok in the u.s.? they are trying to search for a new u.s. ceo. they are trying to revamp their image, not be seen as a company owned by another company based in beijing. his tiktok nervous about the new competition? >> there is a counterintuitive way to look at this. as tiktok comes under the microscope about being so dominant in america and having so much control over user data, they can turn around and look at byte and say we are not the only ones in the game. quite often would you look at it from a legal standpoint or from a regulatory standpoint, it helps to have a solid

competitor out there. they might still some appetizer money and pressure them to -- some advertiser money, this might be a good thing for byte and tiktok. >> is the older demographic of byte one of the reasons its interface is so simple compared to tiktok? >> it is too early to know what it will be for byte. there is probably room in the older demographic. we are talking about 25 and above as an old demographic. there is room for both. they will probably find the demographic that works for them. taylor: coming up, what did we learn from all of the earnings from u.s. tech giants this week? that is our conversation, next. this is bloomberg. ♪

taylor: wrapping up big tech's big week in reporting results. one common theme was china.

apple ceo tim cook said tuesday the company has closed more stores in china as the coronavirus spreads. tesla is expecting a production delay in the country. we spoke to the ceo of a company. >> the overall numbers are starting to get incredibly large here. the total addressable market for basically 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. it is growing like a weed. i don't think people understand ow large the addressable market is for all of these

services is going to be. when you look at broad macroeconomic trends such as capex spending in the u.s., it is being replaced by spending on software and what drives all that software? cloud services. >> if the total addressable market is high, why are the not seeing higher than 34% growth rates? >> they are dealing with two competitors in google cloud. they are good competitors. that growth rate is going to match the growth rate of large productivity software packages. some of those big companies are seeing growth rates in the 30% to 40% range year-over-year on the top lines. there are smaller productivity software and enterprise software names that are growing 70% year-over-year and we will continue to see start ups that make it big that continue to

come to market with $6 billion ipo's and above. we just saw data dog come to market with a successful ipo. there will be a wave of these that come out. the really big players like salesforce and others, these are mature-ish businesses but we can be happy they are growing 30% year-over-year. >> plenty of highlights in the earnings report from amazon but i want to focus on a low light, the international aspect of the business. in australia, amazon was expected to arrive on the retail seemed like godzilla and pre-much sang without a trace. >> the funny thing about amazon is from quarter to quarter, the bottom line numbers tended to matter to investors here. but in any given quarter, it is hard to tell what they are spending money on and how much they will spend, which obviously impacts the bottom

line. when it comes to international, it has not been a massive part of the business to date but they will continue to invest in all of these attempts and that is why at the end of the day, amazon continues to have long-term success. though, short-term it is hard to call those numbers, while the revenue they blew out of the water again. >> one day delivery has been a big thing for amazon. can the spending on that continue? >> the market is telling you it can and basically giving them a long lease to spend whatever they want. from quarter to quarter, it is important to note the market oes care about bottom line numbers. if you are an investor here, are you going to dig into the numbers and prod bezos on how

much he is spending on that attempt? he has proven long-term he is enough to make enough of these big bets into winners. he admits if you are not losing big on some of these, you are not going fast enough or not betting big enough. some of these businesses are seeing rising costs. wage growth will eat in. it is hard to get on his case. >> in terms of exposure to the coronavirus, how does it shape up? >> for apple, i have to say, it is horrible this is happening, it is better it happens now then five months from now, when apple will be seriously ramping up the 5g pipeline. it is better to get it over with now because it won't disrupt their ability to put product in the market at that point. more broadly on a macroeconomic cale, this will have a

ignificant impact, given how much everything is leveraged to chinese growth, which will come down significantly. for tesla, it might be a bit ore acute, but we don't know exactly what it will look like yet. it does not look, based on the way tesla is trading, that they are discounting deliveries, especially in china as the stock continues to rocket. expectations for delivery and revenue for this coming quarter continue to tick up for tesla. everything looks good there. >> elon musk enjoyed once again yesterday, going ahead with these concerns about the coronavirus and over tesla supply chain, could the shorts have the last laugh? >> here is how i see the last couple years of tesla and it bleeds into going forward.

basically must faked -- musk faked it until he made it. he got through that. e put up the numbers that were needed to get the company to profitability. the company is seeing tremendous momentum right now in the product pipeline. if that gets disrupted, if the growth its root -- gets disrupted, i don't think investors will ding him too much for that because he seems to have proven he can make the business profitable and the demand for the car is there. taylor: that does it for this edition of the best of bloomberg technology. we will bring you all of the latest in tech throughout the week. tune in each day at 5:00 in new york and 2:00 in san francisco.

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francine: rothschild is one of the most famous names in the world of finance, tracing back over 250 years. from the jewish quarter in frankfurt, the family expanded across europe, becoming bankers for royalty and government for generations. a long history comes with preconceptions. so how do you modernize such a storied brand and its business?