♪ 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. the first earnings report since sundar pichai took over and first cloud results.

hotspot, tearing through 2020. we take a look at what has supercharged of the stocks. 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 momentum and trend for risk is -- risk assets 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 supported, 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 at a 16 handle down from an 18 handle just yesterday? vix 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. -- this chart 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. -- permanently impairing economic growth. that seems to be what the narrative is. 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 on big cap tech 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. that happened as corona was unfolding. 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 -- technical signals on tech shares, that's where a lot of the upper momentum is going. my question is do we have a horizontal or a vertical price-based consolidation. 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? do you buy the underlines or go via the options? or do you stay out of it? >> it has been unbelievable there. the puts are very expensive. haveive to the calls, they

put the whole skew inverted on tesla this morning. very rare to see. timing is everything on a 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 but have assets of the transform -- transformational nace or -- nature 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. even though the fundamental checks you can make are sound. taylor: that was michael purves.

coming up, we dive into tech earnings. alphabet shares wiped out gains since july after the company's operating profits missed estimates. we break down the numbers next. and if you like bloomberg news, check us out on the radio. you can listen on the bloomberg app, bloomberg.com, or in the u.s. on bloomberg xm. this is bloomberg. ♪

taylor: earnings from alphabet continued monday, suggesting the -- revenue from the key holiday quarter missed key wall street estimates. suggesting the google advertising business struggling to maintain growth. we broke down the numbers with mark bergen. >> from goldman sachs they were like best call ever because they

are monumental disclosures for the company. we saw a lot from the cfo about the cloud business and the optimism there. last year, they said this was largely cloud storage, which competes with aws. has been their biggest growth. you saw little enthusiasm for youtube but they talked about the potential market youtube has in digital advertising, as well as new ways to make monetization. whether it is pay description -- paid subscriptions or commerce. 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

-- deceptive content 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. the numbers they just disclosed were for advertising. this was for 2019. earlier estimates had higher optimism. there is an impressive growth rate. about how they have this big market with advertising. they have things to figure out with regulation and brain safety

. taylor: in the meantime, qualcomm came in with strong sales forecasts. beating estimates. 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. everything was up and positive. 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 the fourth-quarter gross 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. that is when people start to get excited. >> the equity price has had a pretty good year. 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

giving investment advice but you make a good point. hugeneral they have had a run-up. -- they are trading at high multiples if you are coming out, you had better be saying something that at least meets or exceeds expectations. if you want to justify that price. taylor: that was ian king. we also got reaction from the managing director of this 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. that revenue is going up sequentially which is one of the biggest jumps we have seen.

guidance -- the timing -- that start shipping late in the june quarter. they expect another big step function as the revenue starts into the september quarter. 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 -- you will start to see positive sales growth. apple is a large part of the smartphone market on samsung in terms of one of the leading smartphone vendors in terms of volume. qualcomm moved to intel and that really hurt qualcomm's ability to grow.

with 5g coming and apple moving back to qualcomm you should see very strong year-over-year starting much stronger into september. go into the december quarter and beyond you will see very strong reading seller and of their year-over-year growth. taylor: the earnings parade continues after the break with fourth-quarter results from uber. we find out how the company's ride pricing and food delivery business is affecting the bottom line. twitter out with surprising numbers. we discussed twitter numbers with the social network's chief financial officer. this is bloomberg. ♪

taylor: it was a better than expected quarter for twitter. beating estimates for revenue and the number of daily users. twitter gives credit to product improvements and personalized content. they have 152 million people logging in daily on average. 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. you do not have to know who you want to follow. you want toknow file -- follow the 49ers then we do the hard work for you. we have 1700 topics you can follow across six languages. that is a great example of some

of the things we have done. taylor: what has been the biggest challenge behind the improvements? ted: going back a couple of years, twitter was not good at moving fast at testing and having the confidence to try new things. -- we are more sacred moving faster and trying things, whether it is allowing people to come back and forth between a chronological and algorithmic timeline -- getting better at moving faster. >> seeing a bit of a , how are you still getting the type of big numbers you want to see? ted: launching and connecting with what's happening is resonating with advertisers. whether it's disney plus launching on twitter in the fourth quarter which we were so proud to be a part of. there were 9 million tweets

about disney plus in the fourth quarter where people were talking about forming an opinion about and engaging about a strategic service for an important partner for us. for the super bowl where 40 of 41 eligible advertisers were also advertising on twitter, launching new products and connecting with what's happening. those things really resonated in the end. taylor: within the business, you are not participating in political ads, but you still want to see engagement. how much growth can we see? even though you are not participating in political ads? 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. bystander reports are down. when you do these things and organize information, then people can trust what they see. they feel safe being a part of the conversation. elections are a terrific opportunity for us to showcase our improvements. taylor: mark mahaney said you are finally getting some of the investments wanted. maybe you had under invested in previous years. some under-investments led to a bad last quarter that led to personal damage. does this have an impact on results going forward? 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 a mobile application add format. givesimportant because it us a better path and more directive response. the second is to help people understand the benefits of a more personalized experience. our own principles around data getting them a great experience on twitter and online. there is an opportunity for us to get more personalized experiences. are you planning any acquisitions? >> we did eight in 2019. they are about technology and talent. we view that as a core competency. that can help us accelerate our objectives. this has been incredibly high.

we are always thoughtful about where we can acquire and accelerate our objectives. taylor: the ceo jack dorsey has been talking about -- 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, a bunch of us went on parts of that trip but not on all of it. leading in a decentralized way is essential to us achieving our objectives. nobody has any different role this year than they had last year. last year, jack visited 30 of -- taylor: coming up grab is , building a super app in southeast asia. we will hear from their president in an exclusive interview next.

bloomberg technology is livestreaming on twitter. global to follow our breaking news network on twitter. this is bloomberg. ♪

♪ taylor: welcome back to the "best of bloomberg: technology." i'm taylor riggs in for emily chang. becoming a southeast asian super app is what grab wants with services ranging from ride-hailing to fintech. grab acquired uber's business there in 2018 and have raised billions of dollars in funding from heavy hitters such as softbank's vision fund and toyota. we spoke with grab president ming maa about the firm's expansion plan. ming: we are closely monitoring the situation.

it is a situation that is evolving, it seems, hour-by-hour. for us, unlike greater china, which has seen the brunt of the outbreak, southeast asia has been largely untouched by the outbreak. having said that, safety is of primary importance. we are working with the government and regulators to prepare contingency plans in the event that we need to take action, so everything from contact tracing to notify the government of interactions between drivers and passengers, to preparing enough facemasks for our population. taylor: i want to switch to the fundamentals of the business over there. you are trying to become a super app. what sort of opportunities do you see in that market? ming: thank you for the question. 2019 has been an amazing year for us. you're all.

-- a year of execution. we are the region's largest super app. last year alone, we launched nine new services from on-demand video. today, we are the largest ridesharing platform. we have launched the first micro insurance products. the first numberless credit card. we launched the first bid for our partners. 2019 was a very, very busy year for us. in 2020, we were very focused on two priorities. the first is continuing the profitable growth we have seen in our core businesses. secondly, continuing to broaden out the portfolio products we offer in financial services. as a business, we are already profitable in some of our most mature verticals.

the key for us is to continue pushing profitability and we do that through our platform. the way that we think about restaurant partners is as an end to end partner. we are providing solutions and financing to help them grow that business, advertising to help reach customers, and that engagement model is how we drive loyalty and engagement on our platform. >> i want to get more details on your plans and financial services. you are applying for one of singapore's digital banking licenses. but what's next? are you looking at applying for licenses in malaysia and indonesia as well? ming: first of all, it's important to understand the context. the first seven years of our company was about solving the gap in transportation.

when we speak to the customers, you realize there is a large gap in wealth management and the ability to retire. our customers work hard but many struggle to save enough capital for a comfortable retirement. so our acquisition was about reinventing wealth management, democratizing personal savings to the point where accessibility and affordability is no longer restricted to just the very wealthy. it is available to the mass market. we think it is a large market opportunity. consumers in southeast asia hold over $2 trillion of investable assets. the challenge is, over 60% of that loses value over time because of inflation. we see the wealth management opportunity as an opportunity to create new services, new products that are better than just keeping assets in cash, but this is a very similar

opportunity. when you talk to our customers, over 40% are unhappy with their current banking partners. weather it is very expensive fees, hidden fees, wait long times for a service. we want to make banking as simple as ordering a ride. we are very happy with our partners. between the two of us, our ecosystems, we have touched every consumer, every enterprise in the nation and we are confident we can develop the lowest-cost platform for banking. taylor: that was grab president ming maa. uber has tackled conflicts with regulatory agencies around the globe and faced criticism over its uber eats business about its ability to turn a profit. we spoke to mike walsh shortly after the company released

fourth-quarter earnings on thursday. >> i am impressed by the fact that they are able to grow the numbers. one thing that was great to see is that they are closing businesses or selling businesses that are not number one or two in the industry. they are eliminating expenses while maintaining equity. taylor: they are also looking for full-year profitability by 2021. that is ahead of target. how much is the market demanding that? >> i think dara was under pressure as he committed he was planning to get to profitability quickly. i think he has a great team behind him that has been able to meet those objectives. >> you were talking about growth targets a minute ago.

are there limits to growth? we have heard coming up in the call the law of large numbers. does that suggest uber might be getting toward the ceiling of ride numbers? >> they still have a huge potential for market share. the numbers are still only 30% or so of u.s. ride-share or internet users. they have got huge global potential for rides. >> you mentioned uber has been selling some parts of the business. we have just heard from the cfo, saying that they would lean in to an opportunity to take a bigger position in the market. does that suggest they are looking for things to buy? >> it does. what i heard was that the company is going to double down in markets where they could be

number one or two. that may mean acquisitions in some markets. taylor: that was the structure capital managing partner mike walsh. later, we tell you more about the company that beat uber in china and the woman who spearheaded the world's second most valuable startup. and this week, we got the first real look at how disney's new streaming service is faring. we bring you the numbers next. this is bloomberg. ♪

taylor: we got our first indication of how disney's new

streaming service is faring on tuesday. subscribers of disney+ soared to 26.5 million, topping estimates and signaling a fast start as they challenge netflix. we spoke with lucas shaw in los angeles. lucas: they updated the numbers for the different disney streaming services this quarter, something netflix does not do. you know they have 28 million customers, espn has seven, hulu grew by the smallest amount. disney in just one year has become the second biggest player in tv streaming after netflix. you could say amazon is bigger because of the number of prime customers, but netflix is still far and away the biggest. but disney has impressive growth and a strong viewership

based on the data bob iger shared about the popularity about different shows people were watching. >> how about the costs? it is expensive to make this wonderful new content. how is that looking? >> no question, it is a major investment. the losses from the direct to consumer unit rose north of $600 million in losses. but that is to be expected. i don't know that investors are going to be too worried about that. this is the game netflix has been playing for a long time. the bet is that this will work. one reason disney moved into streaming was because it needed to show investors that it had a growth opportunity. cable tv had been such a growth engine for this company and it needed to direct investors to a new area. the direct to consumer business

grew from 900 million to 4 billion this quarter. that is just staggering growth, almost as much as netflix grew overall. that is something bob iger can point to and say, this is the future. long-term, they will need to get costs under control. they have time to figure that out. we don't know if it will be profitable. i think investors will give them a pass in the short term. taylor: wall street watchers have been scratching their heads over tesla shares. the stock has been on a tear on tuesday, tesla close at a record high of $887 before pulling back later in the week. a portfolio manager told bloomberg this week that the recent run-up is inexplicable. >> everybody has a pain threshold.

when a stock becomes unmoored from valuation because of dynamic growth aspects, you just have to walk away. taylor: we also discussed recent moves with an analyst. >> investors might be worried about coronavirus. that is a short-term focus. we are long-term investors. we put out our latest research on tesla. our expected value of the stock is 7000. it is a leader in electric, autonomous vehicles. that is the future of the auto market. what we have seen over the last year is traditional autos have struggled to produce ev on par with tesla's cars and they are really just running away from the competition. >> 7000, that's a very impressive prediction and a long way from where we are now. does tesla really have that much

of a head start on battery technology? >> in electric vehicles, they are the leader. they are riding down the battery cost decline curve. we have done a lot of work to predict the future declines of batteries. for every cumulative double in production, you get a corresponding reduction in cost. tesla's growth margins could go from 20% today to up to 40% and a best case scenario. they also have not lost share in the electric vehicle market. they are sitting around an 18% share. we think they are at least three years ahead of other automakers. that is dollar per range that you get out of the car. they are the only automaker collecting data from their vehicle and this gives them a massive advantage. taylor: besides the advantage,

how do you get to a fair value of $7,000 in the next few years? how do you get that share value number? >> we have devised a probability matrix. this is all on our website. we have looked at the past year and seeing what tesla has done in shanghai. they have built a factory in less than a year and they are now shipping cars. tesla has shown they can scale in a capital-efficient manner. we have set probabilities to each of those that help us arrive at that $7,000 mark. our bull case is really driven by autonomous driving. this could be a huge opportunity for tesla. this will transform if they pull it off. this could be a huge opportunity for tesla that is totally going to be worth trillions of dollars globally. taylor: steve eisman told us the

stock is no longer trading on a valuation. he had to walk away from his short positions. what do you do with a stock like tesla when it no longer trades on valuation? >> tesla has been misinterpreted for a long time. we are only hearing this story in terms of what people are talking about for tesla. you can't value it like a traditional automaker because the future of the auto industry is changing. electric vehicles will make this a more consolidated market. a lot of automakers will go out of business. tesla is in a great position to take advantage and be the leader of the future. if you look at autonomous driving, that means software-like multiples because they are getting software like margins off of that business. taylor: coming up, one of the most powerful women in tech.

how jean liu led didi chuxing to how jean liu led didi chuxing to victory against uber in china. we will have more. this is bloomberg. ♪

taylor: with a valuation over $50 billion, didi chuxing is one of the most high-profile companies in china. the company's president helped to drive uber out of china. we take a look at how their leader became successful in a country where women are not always seen. >> jean is the president of didi chuxing, one of the world's biggest ride-hailing service completing up to 30 million rides per day, that is about 10 million more rides per day than

uber. they are the second-most valuable startup. the valuation has been called into question following uber's disastrous ipo. they are said to be trading privately 40% lower than their peak. investors are starting to doubt if car-hailing companies can ever turn a profit. this is how jean liu took on uber and made them one of the most profitable companies in china. she was born into a prominent family in beijing in 1978. her father is a chinese tech icon, the founder of lenovo. >> part of her personality comes from the fact that her father is one of the most famous people in china and she has been trying to make a name for herself. >> she majored in computer science at harvard and spent 12 years managing asia investments at goldman sachs. in july of 2014, she joined a two-year-old startup aiming to end china's traffic problems.

>> she came to my office and said she wanted to resign. i asked her why. she said, i can't work here if i get pregnant. the commute is killing me. she was spending three hours switching between buses and subways everyday. there are many people like that in china. 800 million chinese who ride 1.4 billion times every day. >> she brought her financial expertise to the company and raised billions to compete against its largest local rival. she later brokered a merger with them. months after the completion of the deal, she was diagnosed with breast cancer. she survived and returned to work to face one of the biggest battles of her career. didi was facing uber, which was already big in the u.s. and starting to expand globally.

>> the money they brought in was bigger than our market cap. we were scared for a moment and there was this big decision. whether you get in or not. -- whether we'd give in or not. >> didi did not give in. instead, the company fought an all-out battle against uber. they bought out drivers in an attempt to crush one another. gaining market share turned into a question of having money to burn. >> first of all, we worked really hard. the product team stayed in the office for three months. we slept in the office and we rolled out four product lines. secondly, if we think we understand the market more. >> for example, many of china's cities restrict the use of private cars to reduce traffic and pollution, so she focused on taxi hailing. they also had the support of china's two mobile paying giants. they helped smooth transactions

and help subsidize drivers. a year later, they both realized they had to stop the costly war and concentrate on building their businesses. in august 2016, they received billions in funding from apple, a deal largely brokered by jean liu. uber also acquired a small stake in didi. since then, didi have started to dominate the domestic market. >> she was instrumental in brokering the apple deal. when she met tim cook, she was saying that didi's logo is an orange and apple being another fruit company, they were bound to do great things together. 22 days later, they announced apple was investing billions -- investing $1 billion into didi. >> they soon began competing globally in australia and japan. they now complete an average of

4 million rides a day outside of china. they have also handled proxy operations for uber with grab and lyft. >> didi and uber have an interesting relationship. after the merger, they did have this short period of truth and were observers on each other's boards. that has come to a halt. didi did form strategic alliances with grab, lyft, but it has not been working as closely as people envisioned. >> just like uber, didi has ambitions beyond ride-hailing. they are venturing into on-demand food delivery, bike sharing, smart city solutions, driverless cars, and the lucrative business she helped build. but those ambitions may be kept in check by year-long company overhauls triggered by the alleged murder of two female passengers. the company's safety record was

thrown into the spotlight as thousands of users publicly deleted the app. regulators cracked down on the drivers and cars allowed on their car-pooling service. >> [speaking mandarin] >> it was a huge setback for didi. they had to halt the carpooling service. it was very lucrative for the company, and after that, they went through a series of events. trying to step up security measures. they finally resumed the service last year. >> despite new success with the company, helping it grow to a massive start up with 13,000 staff, there are questions about the business. investors are doubting they

can ever turn a profit. they face stringent regulatory crackdowns and competition from regional operators, even after muscling uber out of china. the outbreak of the coronavirus could also dampen prospects as the government has imposed travel restrictions. people are traveling less within cities. >> it is another make or break year for didi. a lot of her legacy depends on whether she can prove didi can be profitable in the long run. ♪ 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 5:00 p.m. new york, 2:00 p.m. in san francisco. bloomberg technology is livestreaming on twitter. check us out @technology and follow our global breaking news network. this is bloomberg. ♪

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♪ david: as a child, he grew up doing mathematics and was perplexed by anomalies that did not make sense to him, even the rules for scrabble and monopoly. so he changed the rules. he could not make mathematics work for him in the way he would have liked and in a way that would let him follow in the footsteps of his actuary father, so he turned to economics. richard thaler got his phd at the university of rochester where he entered faculty until he discovered work of daniel kahneman and amos tversky and made his way to stanford to study with them. this led him to new ways of using economics to explain the way people actually behave rather than how theory says they should.