♪ taylor: i'm taylor riggs in for emily chang and this is the "best of bloomberg: technology." we bring you all of our top stories from this week. china put some of its largest cities on lockdown over the coronavirus. we hear how investors are dealing with uncertainty. a week of firsts for alphabet. sundar pichai took over and first cloud results. this ev maker is tearing through 2020. we look at the stock. concerns over the coronavirus dominated headlines this week. residents in wuhan have been

quarantined and some flights have been suspended. copper rebounded after a 14 day selloff and investors will be able to withstand the impact of the virus. markets rallied with the s&p back to market highs. amazon closed above $1 trillion, joining the 13 digit club with shares surging in the wake of a blowout earnings report. on tuesday, we were joined by michael purves of the capital group.

>> there's no question that the underlying lament and has been very strong. in context, it was only a few months ago when we had the bond market signaling a recession was coming. even though it still has been supportive, this concept of a recession narrative is fading. you could check a lot of risk on boxes right now, and obviously, the fed has been there and liquidity is strong. the resilience of this rally has been very strong. taylor: if anybody owns volatility analysis, it is you. what do you make of the vix handle down from just yesterday?

>> the curve right now is very flat. given how strong the lift higher today was, you may have expected a bigger contraction. i think that looking out into the future, the vix has a few things on its mind. one thing is that the coronavirus news flow can ebb and flow and all that, but there's also the view of looming political risk, as some of your colleagues have commented on. it is hard to price that risk, but it is certainly coming. the other issue to focus on is that the s&p is at interesting levels. that is the point where a lot of dealers or investment banks will

pivot. the markets have been very resilient. but seeing major volatility picking up in the near term is going to be different. it feels a lot different than 2018. >> i want to bring up this chat on bloomberg. we saw chinese equities selling off heavily when the market reopened. offshore investors are piling in. my question is, is it too early? the crisis is not over yet. >> it's funny. by way of comparing the

coronavirus and what it means for the markets, it is similar to large natural disasters or terrorist events where there are a lot of headlines and fears about how that will impact the economy but usually those things just fade. but with terrorist attacks, it becomes increasingly resilient. fortunately, there is some time there. there is an analog for viral outbreaks. there is a reasoned case they may have saved your life. the markets could look at this as a deferment of growth rather than anything permanently paring economic growth. i have my own near-term concerns but they are probably less to do with the coronavirus. >> what are they? >> it is very simple. if you look at the tech stocks, those have been leading in defining the rally.

i have been structurally bullish for a lot of reasons and continue to be so. but given the strength and magnitude of the rally we have had, i simply think we have overextended. some consolidation is memorable and we are waiting for big cap earnings to come in. i did not think they will be bad or amazing, i think the companies will just continue to generate a nice earnings growth. it's hard to measure it all, but i would argue that even if it never happened, upward momentum really continues to fade. if you look at various issues on tech shares, that's where a lot of the upper momentum is going. my fear is a horizontal or vertical price-based consolidation. but the market needs to process and digest those.

taylor: you talk about a stock that has gone from parabolic to vertical. we will be speaking to fundamental analysis in the next segment, but on the technical side, how do you play tesla? >> it is unbelievable. the puts are very expensive. i think the call inverted on tesla this morning. it was richer than the puts were. the timing is everything on shorting tesla. there will be a spectacular short at some point. some of your colleagues have commented on the options in the dynamics market. but i simply say this, one thing i find intriguing is that tesla both has this technology component to it and yet is also a new faction industrial company. ultimately, when you have these business models that are asset heavy, the ability for the cost of that capital to be mispriced is very high.

you are simply dealing with a different type of return on investments than other establishment giants. i think that is one theme. twice the market cap of gm and ford and so forth, i wonder if they will pull an aol-time warner, where they will merge with an established cash flow business with hundreds of years of history. i do think the tesla short thesis is one of those things where it is the ultimate sentiment stock. you have to be extraordinarily disciplined.

taylor: that was michael purves. coming up, we dive into tech earnings.

alphabet shares wiped out gains after operating profits missed estimates. we break down the numbers next. and if you like bloomberg news, check us out on the radio. this is bloomberg. ♪

taylor: earnings from alphabet continued monday, suggesting the google advertising business struggling to maintain growth. we broke down the numbers with mark spurgeon. >> it was, like, best call ever because they made monumental disclosures.

we saw a lot from the cfo about the cloud business and the optimism there. last year, they said this was cloud storage, which competes with aws. we saw enthusiasm from youtube about the potential market youtube has in digital advertising, as well as new ways to make monetization. because some of the ad numbers fell below estimates out there. carol: we got comments from the ceo on youtube's growth. >> you may have seen our post about work to remove misleading information about the upcoming election. we are applying our policies to reduce misleading information about voting locations or censuses.

we are pleased with youtube's growth in advertising and subscriptions. carol: is youtube as big as we thought it was? >> there were some estimates for 2018 at 20 billion. they talked about a run rate for the subscription around 3 billion, so even adding all that up, that does not hit 20 billion. clearly, the numbers are not there. they have talked a lot about this big adjustable market advertising. they still have work on regulation and safety to make regulators comfortable. taylor: in the meantime, qualcomm came in with strong sales forecasts. that is thanks to its belief in 5g networks. the ceo says the third quarter will be flat. we discussed this with ian king. >> we had a nice report. then, the ceo says we are not

sure about the third quarter. the analysts wanted things to be linear throughout the rest of the year, and as soon as that expectation was confounded, the stock went down quite quickly. taylor: we spoke with a guest and i asked him about that. the third quarter is flat relative to second. is later pickup enough to reverse the declines? he seemed to think it was, but is there still concerned about

getting that type of growth? >> you have got the right context. they have had several years and quarters without growth. when is this going to finally pay out? anything that causes concern about that is a major, major -- you are pressing buttons people are worried about. >> the equity price has had a pretty good here come up around 40%. when you consider 5g is a long-term growth driver, is this just a time to get long and hold on?

>> i'm not in the business of investment advice, but you make a good point. tech companies, in general, have had a huge run-up in stocks. they are trading at high multiples if you are coming out, you had better be saying something that at least meets or exceeds expectations. taylor: that was ian king. we also got reaction from the managing director of this investment group. >> the key takeaway is how 5g could be beneficial to qualcomm's model. the positive point is the march quarter or q2 guidance going into these phones. this is one of the biggest jumps we have seen since covering qualcomm. june quarter guidance was flat with march, but if you look at the smartphone market and the timing of the second-generation

modem, they indicated they expect another big step function, which could be the first time they shipped back into apple for the upcoming 5g phone. taylor: is this pickup enough to take us out of what has been five straight years of negative sales growth? >> yes, i think he will start to see positive sales growth. it is right behind samsung in terms of volume. qualcomm moved to intel and that really hurt their ability to grow. we will see strong growth for qualcomm starting even in flattish june. they hinted at a strong 2021, so if you go beyond, you will see a strong acceleration of qualcomm. taylor: the earnings parade

continues with fourth-quarter results from uber. we find out how the company's food delivery business is affecting the bottom line. we discussed twitter numbers with the chief financial officer. this is bloomberg. ♪

taylor: it was a good quarter for twitter, beating estimates for revenue and the number of daily users. they give credit to product improvements and personalized content. they have millions logging in daily, 21% more than one year ago. i got details from the cfo. ted: we are so pleased with our daily active user growth. 21% growth means we are making it easier to find what people are looking for, allowing them to follow topics and not just accounts. we do the hard work for you. there is so much room to improve on, but we have 1700 topics to follow across six languages. there is so much to be done. taylor: what has been the biggest challenge behind the improvements?

ted: going back a couple of years, twitter was not good at testing and trying new things. we are much more comfortable moving faster and trying things. whether allowing people to move quickly between a chronological or algorithmic timeline or the changes to allow people to follow topics. taylor: there was some concern, given that alphabet and facebook had seen a deceleration in the advertising business. how are you getting the same business you want to see? ted: launching and connecting with what's happening is connecting with advertisers. whether it's disney plus launching with twitter, there were 9 million tweets about disney plus where people were

talking about, forming opinions about, and engaging on a new service. or the super bowl, where 40 of 41 eligible advertisers were also advertising on twitter, launching new products and connecting with what's happening. taylor: within the business, you are not participating in political ads, but you still want to see engagement. how much growth can we see? ted: elections are great times for twitter and it is always an election year on twitter. 600 million people voted in india last year. there were elections in japan, multiple times in the u.k., and elsewhere in the world. we are able to apply those learnings to other parts of the

world all the time. we label candidates in the states so you know who is tweeting. we remove suspicious behavior proactively. when you do these things and organize information, then people can trust what they see. elections are a terrific opportunity for us to showcase our improvements. taylor: mark mahaney said you are finally getting some of the investments wanted. some under-investments led to bugs. are you confident those have been fixed? ted: we had ads that were not working as expected and we fixed it quickly. remediation takes a few different forms. one is stuff we shifted, we share aggregated data, but there are things that are more important. one is to continue our work on an existing format that gives us a better path to advertising over time.

the second is to help understand the benefits of a personalized experience on twitter. if we balance our own principles around data privacy and transparency with local regulation, giving them a great experience over time, there is an opportunity to get more experiences. taylor: are you planning any acquisitions? >> we did eight in 2019. we view that as a core competency. to find great teams who can help accelerate objectives and bring them into the company. we hope we can do more of that

when we are always thoughtful about how we can accelerate objectives. jack dorsey has been talking about going to africa to do work there. are you the de-facto ceo? ted: we are distributed all around the world as we meet with our shareholders to execute our business. last year, jack visited 30 of our offices. leading in a decentralized way is central to us achieving our objectives. note he has any different role this year than they had in the past. taylor: that was twitter cfo ned siegel. grab is building a super app in southeast asia. we hear from them next. we are livestreaming on twitter. be sure to follow our global breaking news network on twitter.

this is bloomberg. ♪ sometimes your small screen is your big screen.

and with the xfinity stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. download your dvr'd shows and movies on the fly. even record from right where you are. whether you're travelling around the country or around the house, keep what you watch with you. download the xfinity stream app and watch all the shows you love. beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity.

every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond. ♪ back to the best of bloomberg technology. i am taylor riggs in for emily chang. becoming a southeast asian super app -- that is what they want foodservices ranging from pick up 2 -- they have raised billions of dollars in funding, included the latest $4.8 billion from heavy headers like toyota. my poly -- colleague paul allen spoke with -- about the firm's expansion plan. monitoring thely

situation. it is a situation that is evolving hour-by-hour it seems. for us though, unlike china which has seen the brunt of the outbreak, southeast asia has been largely untouched by the outbreak. having said that, safety of course is of primary importance to us and we are working with the regulators and government to prepare contingency plans in the event that we need to take action. we are seeing some contact tracing where we will be able to notify the government of interactions between drivers and passengers and provide enough facemasks a four hour driver population. taylor: you're trying to become a super app going into insurance into lending. what sort of opportunities do you see in that market? ming: 2019 has been an amazing year for us. it has been a year of execution.

we are now the region's largest super app. helpyear alone we launched -- online video to online health care services. we are the largest ridesharing platform, the largest food delivery platform. we launched the first micro insurance products, the first numberless credit card, and to the first bid for a national -- digital bank license in singapore. in 2020, we are very focused on two priorities -- the first is continuing the growth that we have seen in our core businesses. the second is continuing to broaden out the portfolio of services. as a business, we are already profitable in some of our most mature verticals. we have to push profitability.

the way we do that is through our be end be platform. the way we think about our not onlyt partners as a delivery provider, but payment solutions, we're helping to provide financing, advertising, and that engagement model has helped us drive greater loyalty and engagement on our platform. paul: i just want to get a little more detail on your plans and financial services. despot grahamed invest -- bought graham invest. are you looking to apply for licenses in indonesia as well? tog: it is important understand the context -- of the first to seven years of our company was about solving the gap in transportation. when you speak to our customers, we realize there is a large gap

in wealth management into the -- retire.retired many of our customers struggle to save enough capital to have a comfortable retirement. was howisition of bento do you democratize -- was about how do you democratize this, where accessibility and affordability is not only -- is available to the mass market? it is a large market opportunity. consumers in southeast asia hold $2 trillion of investable assets, but over 60% of that is still in cash accounts that lose value over time because of inflation. we see the wealth management opportunity as an opportunity to create new products that is better than just keeping your assets in cash. the digital bank opportunity is

also a similar opportunity. over 40% of our customers are unhappy with their current banking partners, whether it is very expensive fees, hidden fees , you go to bank branches and wait a long times for services -- we want to make banking as simple as ordering a ride. cover and touch nearly every consumer and enterprise in the nation. with our footprint, we are confident we can develop the lowest cost platform for banking. .aylor: that was ming ma sinceas had a rough run its initial public offering last may. it has tackled conflicts with -- companiesrp. around -- regulatory organizations around the world. we spoke earlier with uber mike walshrk --

shortly after the company released fourth-quarter earnings on thursday. >> i am impressed that they are able to grow the numbers. one thing that was great to see was that they are selling businesses that are not number one or two in the industry. ofy are eliminating a bunch expenses while maintaining some equity in those businesses. taylor: they also have this profitability target. full year profitability by year 2021. how much of that is the market demanding that? mike: a lot of it. -- he was planning to get to profitability quickly. he has a great team behind him. you are talking about growth a minute ago -- growth target a

minute ago. uberthat suggested that could be getting towards the ceiling in terms of ride numbers? mike: i still think they have a huge potential for market share. the numbers are still only 30% internetthe u.s. users. it has huge internet -- huge potential. >> you mentioned uber has been selling off some parts of the business. he sold the india delivery business off to -- off. if they saw an opportunity to take a bigger position in the market, are they looking for things to buy if the opportunity presents? he clearly stated, or at least i heard that the company is going to double down in

markets where they can be number one and two. that might mean acquisition in some markets. taylor: that was mike walsh. later this hour we will tell you more about the company who beat uber in china and the woman who spearheaded -- became the world's most profitable start up. we got the first real look at how disney's new streaming services faring. we will bring you all of the numbers next. this is bloomberg. ♪

taylor: we got our first indication of how disney's new streaming service was faring when we got numbers. it challenges netflix is on the line dominance. we spoke with bloomberg's lucas in los angeles. >> they went and updated the numbers for they different disney streaming services so far this quarter. that is something that netflix does not characteristically do, so now we know disney plus has 28 million subscribers. all told, disney in just one year has become the second biggest player in tv streaming after netflix. we do not know how many prime customers are actually watching video. impressive andly strong viewership based on some of the data that bob iger shared

about the popularity of different shows and how long people were watching on a weekly basis. >> how about the costs though because it is expensive to make all of this new content. a majoro question it is investment for them. of 600 million dollars in lawsuits. that is to be expected. i do not know that investors will be too worried about that. this is the game that netflix has been playing for a long time. the bet is that in the long term this will work. of the reasons is disney moved into streaming was to show investors that it had a growth opportunity going forward. cable had been such a growth engine for this company, it needed to direct investors to a new area that would be that moving forward. the direct consumer business

grew from 900 million to 4 billion in this quarter year-over-year. that is staggering growth, almost as much as netflix grew as a company over year. that is something that bob iger could point to and say, "this is the future." byy have forecasted that 2024, the division will be profitable. i think investors will give them a pass in the short term. .aylor: that was lucas shaw wall street investors have been scratching their heads over tesla shares. -- stock has been on a tear on tuesday tesla closed at a record high of $887. that was before pulling back later in the week. bloombergmanager told this week that the recent run-up in the stock was inexplicable. painerybody has a threshold when a stock becomes on more from valuation because

it has certain dynamic growth aspects to it, you just have to walk away. discussed theo recent moves with tosha keeney, analyst at arc investments. worriedtors might be about the coronavirus, but i think that is a short term concern. we recently put out our latest research on tesla. our expected value for this stock is 7000. that is because it is a leader and that is the -- in electric autonomous vehicles into that is the future. it's data library in terms of autonomous driving is running away from the competition. paul: 7000 -- that is very impressive and a long way from where we are now. does tesla really have that much of a head start because it ships

a far fewer cars at the moment. vehicles,electric tesla is the leader. that is because they are writing down the battery cost decline curve. future predicted the decline of batteries. for every cumulative doubling in production, you get a corresponding reduction in cost. we think that tesla's growth margins could go from around 20% the best case% in scenario. they also have not lost share in the electric vehicle market. they are sitting right around 18% share. they are at least three years when of other automakers it comes to battery efficiency. they are the only automaker that is collecting the data front -- data from their vehicles. that's a huge advantage.

taylor: how do you get to fair value of $7,000 in the next few years? we have devised a probability matrix. this is all on our website, this research. we looked at the past year, we saw what tesla did in shanghai. they built a factory in less than a year. tesla has shown that they can scale in a capital efficient manner. we look at a few key factors -- capital efficiency and autonomous driving. we set probabilities to each of those that helped us arrive at that $7,000 mark. autonomous driving is the real driver. it will totally transform the business model if they pull it off. they will get software like margins in a market we think could be worth trillions of dollars globally. longer the stock is no

trading on valuations. what do you do with a stock like tesla when it no longer trades on valuations? tesla has been misinterpreted for a long time. one on the economist at driving front -- we are only hearing this story be a more common theme and you cannot value it like a traditional automaker because the future of the auto industry is changing. electric and autonomous vehicles will make a more consolidated market. a lot of automakers will go out of business and tesla is in a good position to be the leader of the future. if you look at i, tonya miss driving, that means software driving,t autonomous that means software like multiples. of the coming up, one most powerful women in tech --

how jean led didi chuxing to victory in china and more. we will explain more next. this is bloomberg. ♪

overr: with a valuation of $50 billion, didi chuxing is one of the most high-profile companies in china. jean liu help to drive uber out of china and expand beyond the border. we take a look at how she became successful in a country where women are not always seen in the ceo suite. mostan liu is one of the powerful women in tech. she is the president of a didi chuxing. the company operates one of the most -- world's biggest ride-hailing services. didi is also the world's second

most valuable startup. 's valuation is being called into question following uber's disastrous ipo. it is said to be trading privately 40% lower than its peak. -- jean liujean you took on uber and made didi one of the most high-profile companies in china. jean liu was born into a prominent emily in 1978. her father is a chinese tech icon, the founder of lenovo. a type a personality. her father is one of the most famous people in china and at she has been trying to make a name for herself. computeriu majored in sciences in harvard and managed investments at goldman sachs. she joined didi when it was two years old to solve china's

massive traffic problems. didi, there ised this woman coder coming to my office. she said, "i got pregnant." the commute that is killing me. she was spending three hours switching between buses and subways every day. there are many people like that in china -- 800 million chinese. >> she brought her financial expertise to deedee. she helped the company to raise billions of dollars to compete against their local rival. diagnosed with breast cancer. she survived and return to work to face one of the biggest battles of her career. didi was facing its strongest competitor ever -- uber, which was already big in the u.s. and

a starting to expand globally. >> the money they brought in was bigger than our margin caps. we were scared for a moment. it was a big decision whether we give in or not. >> instead jean liu and her company fought an all-out battle against uber. the companies spend billions at discounting rides and recruiting drivers, gaining market share became a question of who had more money to burn. >> we worked really hard. the product team stayed in the office for three months. we rolled out for product lines after uber came in. second delay, we think we understand the market more. think weondly we understand the market more. >> didi focused on taxi hailing, but uber did not seem to understand that. the support of

china's biggest transaction apps. deedee andr, both uber realized they had to stop the costly -- didi and uber realized they had to stop the costly war. , a dealght uber china largely brokered by jean liu. who were also acquired a small stock in didi, retreating from the chinese market. >> she was instrumental in brokering the apple deal. when she met tim cook, he said was an orangego and apple being another fruit, they were meant to work together. triumphed over uber in china, they soon began -- didi triumphed over uber in china they soon began to expand

globally. they launched property wars against uber through investments in many of its international lyft.- competitors like have anand uber interesting relationship. after the merger, they had this short. period of-- short oe truce. that has come to an end. 80 formed strategic alliances didi formed strategic alliances with lyft. >> like uber, didi has visions beyond ridesharing. they want to invest in the lucrative -- those ambitions may be kept in check by a year-long company overhaul triggered by the alleged murder of two female

passengers. the companies a safety record was thrown into the spotlight. regulators cracked down on the type of drivers and cars allowed in the car pulling service pitch. ch.hit foreign language] >> it was a huge setback for deedee. it was a very -- didi. it went through a series of revamps trying to step up security measures. he finally resumed that service last year. theespite new success with company, helping to grow it into a massive start up, there remain serious questions about the business. lostompany is said to have

$1.6 billion. it faces stringent regulatory crackdowns and competition from regional operators even after pushing uber out of china. the outbreak of coronavirus could also dampen didi's prospects since the country has imposed travel restrictions. >> it is make and break for deedee. john lose legacy -- didi. legacy depends on whether she can prove that didi is profitable in the long run. thisr: that does it for addition of the best of bloomberg technology. we will bring you all of the latest in tech throughout the week. five :00 newday, york, 2:00 in san francisco. they are livestreaming on twitter. technology.t @ this is bloomberg.

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♪ child, he grew up doing mathematics and was perplexed by anomalies that did not make sense for him, even the rules of monopoly. so he changed the rules. he could not make mathematics work for him in the way he liked, so he turned to economics. richard thaler got his phd at the university of rochester where he went on to faculty on way tountil he made his stanford. this led him to new ways to using economics to explain the way that people actuall