♪ taylor: this is the best of bloomberg technology where we bring you all of our top interviews. coming up, earnings results from big tex. the latest from apple, amazon, facebook, and microsoft. plus, new evidence raises fears that coronavirus could spread undetected. we will head to a bio lab where researchers are working on antibodies.

and tictoc has a new rival in the u.s.. the hot new video sharing app that has skyrocketed to the top of the app store. first, it is tech earnings season with results from the industry's names. first, let's start with one of the top performing giants, apple. reported the highest quarterly revenue ever banks to strong iphone sales. iphone revenue was $56 billion in the holiday quarter compared with the average analyst 51.5 billion dollars. this looks to be a second highest ever iphone quarterly revenue. to get perspective, paul allen by analysts.ined >> i've used this as a game changer quarter. even the most bullish were thinking maybe a billion and a half. iphone isis shows the strong, not just in china, but look at a 5g super cycle.

stock is going to continue to go this as a clear best case scenario. >> let me come to you on this. it seems like the iphone was all that we really cared about this quarter, making sure that the cyclicality of the stock was dependent on the iphone revenue coming in strong. >> i think that is always going to be the case when you have one product that is so dominant as part of the portfolio. theainly the upgrades to display always helped to give it a boost during the holiday season. julie, we look at the iphone, the revenue was very impressive for the quarter, but is this really a sustainable rate for apple? i don't know if apple would

call it a criminal upgrades, but one of the things as we look forward, a lot of the upgrades you are going to see to the hardware are going to appear to be incremental. there is only so far you can go with cameras and displays and when you are depending on a lot of acquisitions, you look at the fact that apple continues to make an acquisition every two or three weeks, i think we will continue to see a lot of incremental improvements where it is may be hard for the consumer to articulate specifically why they like it better, they just know that the experience is great because so many things work so much better. taylor: that was julie and dan. facebook earnings came out wednesday. total revenue up 25% which appears to be the slowest rate of growth ever. last quarter, facebook revenue grew 29% year-over-year. for more, we spoke to debra williamson in seattle. facebook cruets at revenue at

exactly the race that we thought it was going to grow in 2019. thate not worried in respect. it is exactly where we think it is and we are expecting continued growth next year. everything is flowing, i think, because some of the issues that facebook has been dealing with quarter after quarter regarding privacy and regulations, content moderation, political advertising, all of these things are still weighing on the company but overall, i think things are still growing. user gainsnote, the are actually ahead of where we thought they were going to be for 2019. this is a company that is on anding to chug perform. taylor: every analyst was really excited about facebook in 2020. the political ask him of the olympics, the very strong backdrop. is this perhaps more of a later 2020 story when we could see a pickup in revenue than? >> i think we are seeing it throughout the year.

forefront on a quarterly basis. we look at the year-end total. we are thinking facebook ad revenue is going to increase about 22% this year. you are exactly right, political advertising is part of that. it is not a huge portion. things like the olympics will add a boost. gainsl it is continuing among your average advertiser who is continuing to spend on facebook because of the accurate targeting, because the audience is still there, and because instagram is still growing. >> overall, these results don't look too bad. but we do have to shave down on this right now. i get the sense that we are all roaming around to find some reasons for that. what is your very? theory?at is your >> the markets, the stock market is not something that we directly comment on. all i can say is that i really

believe that facebook has shown itself according to our forecast to beat our forecast for numbers in terms of number of users this year, and this is a company where even though it has had problem after problem, it is continuing to outperform the estimates that are put out for it. it is hard to say exactly why the market is down at that point. taylor: thanks to debra williamson. now to tesla reporting better than expected revenue in the accelerated rival of its next electric, the model y. over 7el 3 brought in billion dollars in sales, beating analysts estimates. all of this leading the company to its second consecutive quarterly profit. that is a pattern, giving way to positive results. 500,000g production, deliveries in 2020.

ierre joined us to discuss. tesla generated $1 billion of cash flow, more than twice what wall street was expecting it was still 30% higher than what we were anticipating. they concert a new factory in a quarter and keep ramping and generate that much revenue. he could be a turning point. the second thing that i found absolutely amazing and what we managedtoday is tesla to make a new factory with stable growth margins. that means the underlying gross margin of the mother tree has continued to expand. that is why it's going from being world-class to doing even

better than that. let's talk about that new factory in shanghai because one thing is bound to come up, when it gets underway in about 45 specifically the cost of the new china plan does not appear to show up in the financials. what is your opinion of that? >> as you can imagine, it is probably the one question asked on the call. that it isw is affecting the gross margins. you,ne thing i can tell the mother tree ramp, in the getting into the numbers was in the order of $150 million.

that is why we have to be looking for. so, what question are you asking on the call? i think we just covered probably the one that comes first to mind, what is the rough and volumeat we can with the improvement in gross margins of the company? that is what will give you the best indication of where the gross margin of the company is heading toward the end of the year. coming up, more on earnings. we will take a look at amazon's fourth-quarter results, next. and if you like bloomberg news, check us out on the radio. this is bloomberg. ♪

taylor: the latest to report earnings of amazon. a biteseem to be taking out of its robust holiday earnings. amid intensifying competition from microsoft and alphabet, aws in hiring thousands of salespeople and engineers. to analysts.spoke there were several positive takeaways in a quarter. the revenue number was above expectations and guidance. more importantly, the operating income number really blew away all analyst consensus including hours. even more remarkable, they were going into the holiday without spending heavily on one-day day shipping, that was really

remarkable against those odds. i think the amazon web services business continues to hold in the place of competition from microsoft, cloud offering. we know that microsoft has been getting market share, but i think amazon web services has gotten a lot of special attention in terms of the potential of growth. i think this quarter they will he answered all doubts, about 34% growth. 26.5% operating margin. amazon web services really at the forefront of them on innovation. you look at the other areas, prime membership group, you get a sense that it was actually a major catalyst for that. a lot of positive takeaways. remarkable execution.

>> amazon web services was one that was going to be watched closely, expectations were firmly managed to say the least. 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. markets, somenal of the stocks growing to the margin markets. like india, a notable call out there. cloud the pentagon infrastructure contract to microsoft was a big blow to aws, which they are still litigating. that being said, i think this is a huge addressable market that will be big enough for the three major players. the way, amazon is still the dominant player in the space, despite competition from microsoft and google cloud. this is a business that i think

is going to hit probably around -- pretty soon. you can envision aws being a huge chunk, perhaps half of the equity valuation of amazon stock. which is why our stock of over one trillion would be says a lot about what we see here. taylor: i wt to tke alook at a chart that i'm showing at my terminal. if you think we are just in the early stages of what is going to be a big market opportunity, why are we only growing at 33%? that is a question we get a lot from investors. the simple answer here is the law of large numbers. magnitude, theof microsoft cloud. that really answers the question. that being said, there is a lot to be said about how microsoft this has really reinvented

area. they are doing a lot of things right. quibbles with the trump administration and the pentagon did not help the perception. , the market i would say is still in growth. it should serve the dominant player is very well. want you tolly, i come and take a look at another chart that i'm showing here inside my terminal. close ont the thursday, so it is not yet reflecting the post-market movements. but if it were, this would be a trillion dollar company. is that valuation justified? >> i think so. that is why we kept of our

recommendation in the face of all the chatter with the anti-trump and government investigations. 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 antitrust. you know what you're getting into. but the core of business remains intact. ,he shift to enterprise cloud aws on the cutting edge of innovations, artificial intelligence. us,one point that jump at 40 million active users for fire tv. you get a sense of building a big ecosystem, alexa and echo. hurt that theyt just got seven or eight golden globe nominations. creation withnt

the likes of netflix and hulu. and amazon's cloud rival microsoft reported second-quarter earnings above the highest analysts estimate wednesday. cloud demand continuing to dominate. fromoke to glenn o'donnell forrester in new york. microsoft is the fastest-growing player in the cloud computing field. amazon is still the big dog in the fight with the cloud service, but microsoft is coming on very strongly. a clear number two player behind aws and everybody else bringing up the rear. is year-over-year growth pretty astounding, even in a world of cloud computing. we don't see that slowing down at all in the near future. >> in terms of that enormous

pentagon, there is 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 of that. if you get a big deal like that, everybody wakes up and says there must be something going on there. indeed, that has happened. pretty strongly with microsoft as a cloud provider. will they be more big deals like that? >> we doubt that there will be gigantic deals in clouds. it tends to be just a bunch of really small details, but occasionally you get something like this. the contract with government, $10 billion over a certain amount of time, that is a lot of money. mostly i think it is just raising awareness that microsoft

is a really serious player here. also coming revenue in better. is there something specific microsoft is doing or are we just in the midst of a bull market? >> there has been a lot of refreshing computers. the older systems are slowing down and people want to get a new computers. most of those are running windows. the growth is probably attributed mostly to that, plus with the end of windows 7 support, and a lot of people were sort of forced into going with new machines to support windows 10. that is probably part of it. taylor: thanks to glenn o'donnell, analyst at forrester. and later, nations around the world are taking drastic measures to stop the spread of the deadly coronavirus. we will go inside one biotech firm where scientists are racing to create antibodies, next. u.s. tikcok has a new rival and it is a favorite --

reboot of an old favorite, vine. we will take a closer look at it, next. this is bloomberg.

taylor: seeking and i feel valuation just over $744 million a drop from the heyday of what $1 million. the startup plans to sell a .3 5 million shares for $17 and $90 each. this makes the assessment short of the $1 billion needed to be a unicorn company. founded in 2014, casper

popularized the so-called "bed in a box" industry. i was joined by liana baker in new york to discuss the first closely watched ideal of the year. >> it is about a 30% drop and it's all about the timing. came inlion valuation march, 2019. that was before the whole wework debacle and the aftermarket performance of lyft and all these unprofitable internet focused companies that just did not impress public market investors. it make sense that the advisors on the ipo are trying to tell the company look, why don't you have a more conservative valuation? these investors have more scrutiny for these companies. taylor: is this being seen as a bellwether for future tech startups that are trying to go public? >> definitely, we are still in january and is going to be a long year ahead. that first consumer brand name that people know, casper is

everywhere. it performs well, it could mean that companies like post mates otherordash and unprofitable names that are known by consumers that advertise a lot, they will see whether it is more about the market for them to also go public. >> so the biggest issue, everyone thinks that they have a website, so now they are a tech company. is this a tech company or a mattress company? >> it is a great question. if you go through the ipo filing, it is in the tech- enabled business. there is an origin center in san francisco and they are trying to develop new products size mattresses like special lights. the company is investing in technology but at the end of the day, they make mattresses and they have opened retail stores all across the country, so it really is one of those companies that is in the eye of the beholder whether it is valued like a tech company or a consumer company.

it harkens back to the mealket craze. blue apron, hello fresh. it is hard to say. taylor: should we become for the by the fact that revenue for 20% in losses only were 5% in the same time period? >> there were some highlights in the filing in the financials. it has pretty good margins in the range. it does make money off these mattresses. the retail locations are very profitable. it is making money, it is just right now not able to turn a profit and it says it may never turn a profit which is something that is pretty common in a of perspectives. taylor: have they given us any hint that they can be profitable if they wanted to? >> there is no indication but investors may want to look at one of their rivals through a reverse merger ipo. that company is profitable. i'm sure that casper would like

investors to look at that as some sort of model for that. we only have about 30 seconds. i wanted to get your thoughts on you can be inory, the bit more lenient with in the venture capital world. do you assume now more money flowing in to startups, and creating more private, lofty valuations? is just a new avenue for them to invest directly in venture capital funds. investingan sachs be as much as private companies in venture capital? probably not, but it is definitely something to watch. later, is the up u.k. setting itself up for conflict by giving huawei access to five g networks? and bloomberg technology is live streaming on twitter. check us out. be sure to follow our global

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♪ 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 recently initiated development of a potential vaccine. >> we have a very powerful and productive platform to identify anti-bodies. anti-bodies are proteins that

circulate 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, modify 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 called mab114. there are tests in the congo by the nih. it is showing and ability to reduce lethality. 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 it? >> we have a number of antibodies we have isolated against sars. those are both coronaviruses. 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 bats. there is the possibility they could also neutralize the new wuhan virus. 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 are

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 potential for getting worse, or could we end up in the situation like sars where it effectively disappeared? >> i hope it behaves like sars and will eventually disappear. the 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 than 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 it 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 per year. >> i think that is a really good point. in the u.s. right now, you have a higher chance of dying from flu than 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 to get data 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. we are local but think globally. the u.s. is certainly an important priority. we know this is transmissible and does not really respect borders. it is very much like what we see with the flu every year. >> why would a vaccine be different than an antibody? >> that is a really good question. they are related, of course.

the anti-bodies that would be manufactured originally came from an immune response. the anti-bodies will mostly be deployed if someone is sick. that can be quite challenging. it is not necessarily a given that 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 would be, 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.

our 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 iphone 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, which 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 radioactive 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 state-sponsored actors. motivated u.s. fears. this is a deal the u.s. should be able to get behind in private, if not public. the commissioner of internal markets and services is expected to unveil similar guidelines. taylor: that was alex webb. a new rival of tiktok has emerged and its predecessor is no stranger to fans of video

sharing apps. it was created by the person who also cofounded vine in 2012 and sold it to twitter. it is among the top apps in iphone's app store in the u.s. this week. we spoke to our bloomberg opinion columnist in new york. >> that is the thing with vine, it was going a few months before twitter 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. the people running get at the time were opposed to running branding ads. 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

delayed and now it has hit the streets so to speak under the interesting name of byte. tiktok, its biggest rival is called bytedance. 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 they're 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. bytedance is one of those few examples of a chinese company having a big impact overseas, especially in north america. the name, well maybe it is a coincidence, maybe it is not. 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 at 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 they are trying to get influencers. the battle between tiktok and byte to get key creators will be intense. >> what is the aim for bringing this back? they keep emphasizing they have a modest budget. are they trying to make money or is it just for nostalgia? >> i think he is trying to make money. there was a feeling vine was great and when it went away people were heartbroken. there is an older demographic. 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. is 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 when 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 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 the demographic 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. azure is growing like a weed. i don't think people understand how 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 they not seeing higher than 34% growth rates? >> they are dealing with two competitors in google cloud and microsoft, which 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 that 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 arm of the business. in australia, amazon was expected to arrive on the retail scene like godzilla and pre-much sank without a trace. >> the funny thing about amazon is from quarter to quarter, the bottom line numbers tend 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. costs have risen. can the spending on that continue? >> the market is telling you it can and basically giving them a long leash to spend whatever they want. from quarter to quarter, it is important to note the market does 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 able 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 betting big enough. some of these businesses are seeing rising costs. you see that with wage growth in the u.s., that will eat in. it is hard to get on his case. >> in terms of exposure to the coronavirus, how does it shape up? apple addressed this in earning calls. >> for apple, i have to say, it is horrible this is happening, it is better it happens now than 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 scale, this will have a significant impact, given how much everything is leveraged to chinese growth, which will come down significantly. for tesla, it might be a bit more 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 burning the shorts once again yesterday, going ahead with these concerns about the coronavirus and over tesla's 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 musk faked it until he made it. he committed securities and accounting fraud, but he got through that. he 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 gets disrupted, i don't feel that 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. along history comes with preconceptions. so how do you modernize such a storied brand and its business? on this episode of "leaders with lacqua," i meet ariane de rothschild. ariane de rothschild, thank you so much for joining us here. how tough t