China's Semiconductor Rally: Impact on Global Markets

China's semiconductor sector rallies as investors anticipate government stimulus to boost its geopolitical ambitions.

### Silicon Valley Insights: China’s Chip Rally and Cybersecurity Concerns
* 💹 China's semiconductor sector is experiencing a remarkable **$13 billion rally**, driven by investor optimism regarding potential government stimulus to support the industry, which is **crucial for its geopolitical ambitions**.
* 📈 Semiconductor Manufacturing International Corporation (SMIC) has seen its stock rise **over 28% in a single day** and approximately **65% over the past few days**, despite being blacklisted for U.S. investors.
* 🏦 Smaller chip competitors are also benefiting, with an overall **increase of 17%**, as traders anticipate a **flurry of activity** when the Chinese stock market reopens.
* 📉 However, the broader Chinese stock market has been in a **bear market since February 2021**, and while recent gains are promising, many areas remain **down for the year**.
* 🔍 Analysts are closely watching upcoming announcements from China regarding the extent of stimulus for the semiconductor sector, with expectations that this could signal **further market momentum**.
* 💰 Institutional and retail investors are showing renewed interest in Chinese tech, with **$6 billion flowing into China-focused ETFs recently**, indicating a **shift in market sentiment**.
* 🔒 Cybersecurity is a pressing concern, as evidenced by a recent attack on American Water Works, which serves **14 million customers** and raises alarms about **vulnerabilities in critical infrastructure**.
* ⚠ The U.S. government has warned about potential disruptive attacks from Chinese hackers, highlighting the need for **robust defenses against cybersecurity threats** in essential services.

### Amazon's Office Culture Shift and Apple's Market Challenges
* 🏢 Newly hired Amazon employees are now experiencing a more traditional office culture with three days a week in the office, but many feel this isn't **enough for effective collaboration and learning**.
* ☕ There has been a trend of employees engaging in "**coffee badging**," where they badge in for coffee and then work from home for the rest of the day, leading to concerns about **cultural integration**.
* 📄 Andy Jassy, Amazon's CEO, is passionate about **enhancing company culture**, as he emphasized in a detailed note to employees, despite some pushback suggesting this could be a strategy to "**thin the ranks**."
* 📉 In the tech market, Apple has received a downgrade from analysts due to skepticism surrounding the **sales performance of the latest iPhone models**, particularly the iPhone 16 and 17, which are seen as **overhyped**.
* 📊 Analysts are noting that the expectations for Apple's future innovations are becoming **increasingly cautious**, with many feeling that the company is **struggling to replicate the groundbreaking success of the iPhone**.
* 🔄 The discussion around Apple's product release cadence reveals a shift away from **annual updates**, with a focus on **more polished products**, but this could lead to **delays and challenges in maintaining market excitement**.
* 📉 Investor sentiment towards Apple is currently negative, with many analysts predicting **weaker demand and potential production cuts**, reflecting a broader **anxiety within the investment community**.
* 🎬 Meanwhile, the entertainment sector faces challenges as seen with the disappointing performance of the "Joker" sequel, which opened **significantly lower than expected**, highlighting ongoing competition with **streaming services and changing audience preferences**.

>> FROM THE HEART OVER. INNOVATION, MONEY, AND POWER COLLIDE IN SILICON VALLEY AND BEYOND. THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: LIVE FROM NEW YORK AND SAN FRANCISCO. THIS IS BLOOMBERG TECHNOLOGY. CHINA'S CHIP SECTOR SEES A $13 MILLION RALLY. WE DISCUSSED THE BETS ON BEIJING STIMULUS. ED: AMAZON'S LEADERS PUSH FOR A RETURN TO OFFICES TO PROTECT THE TECH GIANT'S CULTURE. CAROLINE: U.S. INFRASTRUCTURE HACK. THE LATEST TARGET AS OFFICIALS WARN OF THREATS FROM IRAN AND CHINA. BUT FIRST, WE TURN TO OUR TOP STORY ON THE MARKETS, WHICH IS THIS CHINESE CHIPMAKER SEMICONDUCTOR MANUFACTURING.

INTERNATIONAL LEADING THAT $13 BILLION SECTOR RALLY TO GLOBAL INVESTORS BET THE BEIJING FINANCIAL POLICY OR SUPPORT FOR THE INDUSTRY THAT IS CENTRAL TO ITS GEOPOLITICAL AMBITIONS. SMITH IS BLACKLISTED FOR U.S. INVESTORS BUT IT'S A BROAD RALLY. >> IT'S NOT JUST SMIC THAT'S RALLYING BUT THAT STOCK IS UP OVER 28% JUST ON THE DAY UP ABOUT 65% IN THE LAST FEW DAYS. SHARES HAVE BEEN TRADING IN HONG KONG BECAUSE THE STOCK MARKET IN THE MAINLAND CHINA HAS BEEN CLOSED ALL WEEK FOR THE HOLIDAYS SO THERE'S A LOT OF ANTICIPATION THAT WHEN THE CHINESE STOCK MARKET OPENS I GUESS TONIGHT FOR US IN THE U.S. BUT TOMORROW MORNING TUESDAY MORNING IN CHINA THAT THERE

WILL BE A FLURRY OF BETS. WE ARE SEEING TRADERS GETTING AHEAD OF THAT. SMALLER COMPETITORS IN THE CHIPS SPACE ARE ALSO UP AS WELL. SEMICONDUCTOR UP 17% RIGHT NOW. INVESTORS THINK THE CHINESE GOVERNMENT IS GOOD TO HAVE SOME KIND OF SEMICONDUCTOR INDUSTRY SPECIFIC STIMULUS. IF YOU LOOK AT THE CHINESE EQUITY MARKET, SINCE LATE SEPTEMBER, THINGS HAVE BEEN IMPROVING. GIVE US THE BIGGER PICTURE OF THIS PERFORMANCE RELATIVE TO U.S. TECH OR EUROPEAN TECH SO FAR IN 2024? EMILY: THE BIGGER PICTURE PERFORMANCE IS CHINESE STOCKS OVERALL HAVE BEEN IN A BEAR MARKET EVER SINCE FEBRUARY OF 2021. ALTHOUGH WE HAVE SEEN BIG GAINS SINCE LATE SEPTEMBER WHEN

BEIJING DID ANNOUNCE FISCAL AND MONETARY STIMULUS. WE ARE STILL DOWN FOR THE YEAR IN A LOT OF THESE AREAS, AND THAT'S A BIG QUESTION HERE: WHAT EXACTLY ARE WE GOING TO GET FROM CHINA WHEN THEY HAVE THAT CROSS CONFERENCE PRESS CONFERENCE LATER TONIGHT AND TOMORROW MORNING IN CHINA. AND WHEN THE STOCK MARKET REOPENS THERE. WAS A NOTE FROM BRENT DONNELLY, AND THE SUBJECT LINE WAS CHINA, CHINA. HE HAS A POINT IN HIS NOTE. HE SAID, HOW BIG IS THE STIMULUS? WILL THEY EVEN TELL US? TONIGHT'S CHINA REOPENING IS LIKELY TO BE SPICY. IS THE GOVERNMENT GOING TO PLEDGE SPECIFICALLY TO ADD STIMULUS TO THE SEMICONDUCTOR SECTOR? BUT THE BET IN THE MARKET IS THAT THEY WILL. CAROLINE:

THIS HAS BEEN A LONG-HATED AREA MORE BROADLY POSITIONING HAS NOT BEEN LONG CHINA AND INDEED CHINA TECH PORTFOLIO. >> ANYONE WHO'S GOTTEN IN BACK IN 2021 IS ACTUALLY STILL IN NEGATIVE TERRITORY. WE ARE SEEING SENTIMENT START TO I GUESS, AROUND AS ONE WOULD EXPECT THE STOCK MARKET GOES UP, ETF FLOWS FOLLOW SO IN THE LAST WEEK WE SAW $6 BILLION FLOWING INTO U.S. LIFTED CHINA ETF'S. EVEN ACROSS THE GLOBE INVESTORS ARE TRYING TO GET IN OR AT LEAST PLAY THE MOMENTUM RIGHT NOW. CAROLINE: EMILY -- ED: EMILY WITH THE REPORTING ON MARKET MOVES ON TECH. LET'S DISCUSS MORE WITH JANET. YOUR REACTION WAS TO UPGRADE YOUR CALL IN THE EQUITIES

CONTEXT ON ASIA X JAPAN. WHEN YOU'RE WEIGHING UP THE FACTORS IN CHINA TECH, WHAT WERE THE THINGS YOU WERE LOOKING AT SHORT, MEDIUM, AND LONG-TERM. >> THANK YOU FOR HAVING ME. WE HAVE BEEN SKEPTICAL OF CHINA AS MANY PEOPLE ARE, BUT I THINK IT'S REALLY HOW UNDERVALUED CHINA HAS BEEN VERSUS THE U.S. OR OTHER DEVELOPED MARKETS. AND THE FACT IS POSITIONING HAS BEEN VERY LIGHT TRADE FOR US. WE HAVE BEEN UNDERWEIGHT FOR QUITE A SUSTAINED PERIODS OF TIME, SO I THINK THAT IS SHIFTING, AND THE CHINESE MARKET IS VERY MOMENTUM-DRIVEN, VERY LIQUIDITY-DRIVEN, SO WE HAVE SEEN BOTH HAPPENING. AND I THINK WE WOULD LIKE TO PARTICIPATE IN THIS RALLY. THIS PROBABLY HAS MORE TO GO, AND IN TERMS OF CHINESE TECH, OBVIOUSLY VERY UNLOVED VERSUS THEIR U.S.

COUNTERPARTS PER THEY ARE DIFFERENT BUT STILL WE THINK THERE IS STILL LARGE UPSIDE POTENTIAL FROM HERE. HAVING SAID THAT WE JUST UPGRADED I THINK THERE'S STILL A LOT OF QUESTION MARKS FOR THE LONGER TERM. ED: EMILY'S REPORTING JUST IN THAT CONVERSATION WAS LARGELY ABOUT SOME OF THE DOMESTIC CHIP NAMES IN CHINA WHAT'S YOUR ATTITUDE TOWARDS THE SEMICONDUCTOR SECTOR IN MAINLAND CHINA? JANET: I THINK IT IS OBVIOUSLY A VERY STATE-SUPPORTED SECTOR. IT HAS BEEN FOR A WHILE LONG-TERM. SO I THINK IT MAKES SENSE FOR INVESTORS TO FAVOR THE SECTOR GIVEN THE NEW SEMICONDUCTOR STRATEGIC AREAS OF THOSE EQUITIES HAVE THEY SHOULD DO WELL GIVEN HOW IMPORTANT THAT IS. BUT ULTIMATELY WE HAVE TO

UNDERSTAND A LOT OF DEVELOPED ECONOMIES ARE LIKELY TO STILL BE SKEPTICAL AND HAVE RESTRICTIONS ON ALL SORTS OF THOSE COMPANIES' PRODUCTS. I WOULD PARTICIPATE IN THE RALLY AND THINK IT DOES HAVE FURTHER TO GO, BUT I WOULD BE A BIT MORE CAUTIOUS OVER LONGER-TERM, AND WE HAVE TO KIND OF UNDERSTAND WHEN IT IS NECESSARY. CAROLINE: TO THAT POINT, DO YOU THINK PEOPLE ARE PROTECTED TO THE DOWNSIDE ENOUGH? DO WE THINK A LOT OF PEOPLE GET BURNED ONCE AGAIN? JANET: IT IS POTENTIALLY POSSIBLE. WE'VE SEEN THAT PLAYED OUT BEFORE IN THE PREVIOUS BULL MARKET CYCLE. WE'VE SEEN THAT PLAY OUT AGAIN AND AGAIN, BUT I THINK IT COULD LAST FOR QUITE A BIT, AS I SAID, GIVEN HOW MUCH THE POSITIONING, HOW UNDERWEIGHT IT

IS FOR GLOBAL INVESTORS. SO I WILL SAY IT COULD HAVE FURTHER TO RUN IN THE NEXT COUPLE OF MONTHS AT LEAST I THINK. I THINK THE CHINESE AUTHORITIES' HANDS ARE TIED. THEY WILL HAVE TO PROVIDE MORE STIMULUS. THERE IS A CHANCE FOR SOME INVESTORS TO GET THERE. WE HAVE TO MONITOR CLOSELY. CAROLINE: THERE'S BEEN INSTITUTIONAL MONEY FLOWING IN. AND ALSO RETAIL. I WANT TO GET A CHECK MORE BROADLY OF SENTIMENT TOWARDS SEMICONDUCTORS GLOBALLY. TECHNOLOGY GLOBALLY. WHERE ARE WE SEEING THE OPTIMISM, STILL IN INSTITUTIONAL MONEY OR IS IT RETAIL WE QUESTION THE LONGEVITY? JANET: I THINK BOTH. FOR EXAMPLE, WE STILL AT THE GLOBAL SEMICONDUCTORS. THAT'S MOSTLY U.S.

PLAY. SO, I THINK THERE'S A LOT OF STRUCTURAL SUPPORTIVE DRIVERS BEHIND THAT. WE ARE VERY HAPPY TO GET EXPOSURE TO THOSE HIGH-QUALITY COMPANIES. FOR INSTITUTIONS, I THINK IT WILL BE DANGEROUS IF YOU DO NOT PARTICIPATE IN THE SEMICONDUCTOR THEME. I THINK FOR RETAIL INVESTORS, ONCE THE MOMENTUM IS BACK, I THINK THAT WILL DRAW IN MORE PARTICIPATION, PARTICULARLY IF INTEREST RATES ARE BEING CUT, THE ECONOMY CONTINUES TO EXPAND, AND HOPEFULLY LESS SPENDING OUT THERE ON THE HEADLINE SPRAYED. I THINK THAT COULD HELP. OVERALL, WE STILL LIKE THE SECTOR PREYED. WE HAVE STAYED INVESTED, AND WE CONTINUE TO ENCOURAGE INVESTORS TO ADD IN MORE MONEY. VALUATIONS ARE TURNED.

ATTRACTIVE IN THE PAST COUPLE OF MONTHS. ED: WHEN YOU GOT TO YOUR DESK THIS MORNING IN LONDON, HOW BIG OF A FACTOR OR RISK WAS TRADE RISK OR SUPPLY CHAIN RISK FOR TECHNOLOGY INVESTORS AROUND THE WORLD. JANET: OBVIOUSLY, IT IS PART OF THE CONSIDERATION, GIVEN THAT THE CHIP INDUSTRY, THE SUPPLY CHAIN, IS VERY COMPLICATED. AND IF THERE'S WIDESPREAD TRADE PROTECTIONISM, THEN OBVIOUSLY, THAT'S NOT GREAT. BUT FUNDAMENTALLY, THE DEMAND IS STILL STRONG. AND I THINK WHAT WE ARE A BIT MORE REASSURED NOW IS IF YOU LOOK AT THE POLLS, THE PROBABILITY OF TRUMP WINNING THE ELECTION HAS GONE DOWN. OBVIOUSLY, IT'S A TIGHT RACE, BUT IT GIVES US COMFORTS TO BE MORE

POSITIVE ON CHINA EQUITIES STORY AND ALSO THE GLOBAL SEMICONDUCTOR. I THINK FUNDAMENTALLY IT'S ULTIMATELY ABOUT THE LONG-TERM BUILDUP OF AI INFRASTRUCTURE AND HOW STRATEGICALLY IMPORTANT THAT SECTOR IS GOING FORWARD. >> HOW IMPORTANT WOULD -- WAS THE 4% NUMBER ON THE 10 YEAR YIELD AND THAT MACRO CONTEXT FOR THESE AI BETS? JANET: THE THING IS WE SAW YIELDS GO BACK TO 4%. SOME SMALL TO MID-CAP STOCKS COULD BE STRUGGLING A LITTLE BIT TODAY BUT WE STILL SEE SOME OF THE KEY SEMICONDUCTOR STOCKS ARE RISING. IT'S VERY COMPANY SPECIFIC BUT WHAT WE THINK IS A STRONG ECONOMY GOOD JOB MARKET IS ULTIMATELY GOOD. FOR CORPORATE EARNINGS, ETC.. I WOULDN'T LOOK TOO MUCH INTO THIS ONE-DAY MOVE FOR EQUITIES.

IF THEY ARE DOWN OR STRUGGLING A LITTLE BIT. STILL QUITE COMFORTABLE TO BE OVERWEIGHT IN THE U.S. IN THE U.S. SEMICONDUCTOR SPACE. CAROLINE: THANK YOU. COMING UP, U.S. WATER INFRASTRUCTURES UNDER ATTACK. MORE ON THE LATEST CYBERATTACK ON AMERICAN WATER WORKS. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: AMERICAN WATER WORKS SAYS ITS COMPUTER NETWORK SYSTEMS WERE HACKED. THE COMPANY WHICH SUPPLIES DRINKING WATER AND WASTEWATER SERVICES TO 14 MILLION PEOPLE SAY PARTS OF IT SYSTEMS WERE DISCONNECTED OR DEACTIVATED AS THEY WORKED TO CONTAIN THE CYBERATTACK. FOR MORE, JORDAN ROBERTSON JOINS US NOW. WE HAVE HAD WARNINGS FROM

GOVERNMENTS ABOUT THIS, HOW BROAD IS THIS ATTACK FROM YOUR PERSPECTIVE. >> THANKS FOR HAVING ME. THIS COMPANY THAT WAS BREACHED IS THE BIGGEST PUBLICLY TRADED WATER AND WASTEWATER COMPANY IN THE U.S. IT SERVES 14 MILLION CUSTOMERS ACROSS HALF OF THE STATES IN THE U.S. AND IT'S POTENTIALLY A VERY BIG DEAL. WE DON'T HAVE A LOT OF DETAILS OR SPECIFICS ABOUT THIS PARTICULAR ATTACK JUST KNOW THE COMPANY HAS DISCLOSED THIS MORNING IN A REGULATORY FILING WHICH IS IT HAS BEEN A VICTIM OF A CYBERATTACK AND ITS DISCONNECTING OR DEACTIVATING SOME SYSTEMS. WE DON'T HAVE A LOT OF ABOUT THE ATTACK. WE DO HAVE CONTEXT AROUND ATTACKS FROM WATER TREATMENT FACILITIES WHICH IS THE U.S. GOVERNMENT HAS BEEN ADVISING FOR MONTHS IN PARTICULAR THAT

CHINESE GROUPS HAVE BEEN INFILTRATING U.S. WATER SYSTEMS IN POSSIBLE PREPARATION FOR MORE DISRUPTIVE ATTACKS. WE DO NOT KNOW IF THIS IS ONE OF THOSE OR IF IT IS ANOTHER TYPE OF BREACH, BUT GIVEN THE CONTEXT AND THE SIZE OF THIS WATER COMPANY, IT'S POTENTIALLY A VERY BIG DEAL. CAROLINE: CAN YOU GIVE US THE CONTEXT OF THOSE CRITICAL U.S. SERVICES? WE GOT REPORTS IN THE WALL STREET JOURNAL ON FRIDAY ABOUT POTENTIALLY AN ATTACK ON PROVIDERS OF INTERNET WIRELESS, BUT ALSO MORE BROADLY. JORDAN: WHAT'S HAPPENING NOW IS A LITTLE BIT DIFFERENT THAN WHAT'S HAPPENED IN PREVIOUS YEARS WITH REGARDS TO CHINESE HACKING. FOR MANY YEARS, THE U.S. GOVERNMENT'S ISSUED WARNINGS

ABOUT CHINESE HACKING FOR ECONOMIC ESPIONAGE. AND ALSO REGULAR ESPIONAGE, SPYING ON GOVERNMENT AGENCIES AND MILITARY CONTRACTORS AND THINGS LIKE THAT. WITH THE GOVERNMENT HAS BEEN WARNING A WHILE ABOUT NOW IS THERE ACCUSING CHINESE HACKERS PARTICULARLY A GROUP CALLED VAULT TYPHOON WHICH IS THE NAME OF THE CYBERSECURITY PROFESSIONALS HAVE GIVEN THEM. OF PRE-POSITIONING THEMSELVES INSIDE CRITICAL NETWORKS TO CONDUCT POTENTIALLY DISRUPTIVE ATTACKS. AT SOME PREDETERMINED POINT IN THE FUTURE. IN THE MILITARY THEY CALL THIS PREPARING THE BATTLE SPACE. IT'S A VERY DIFFERENT TYPE OF ATTACK THAN WE'VE SEEN IN THE PAST FROM SOME CHINESE GROUPS SO THAT'S WHAT THE U.S. GOVERNMENT HAS BEEN WARNING.

ABOUT. IN THIS CASE, WE DO NOT KNOW YET IF THIS IS WHAT LED TO THESE CHINESE ATTACKS AT ALL, OR IF IT SOMETHING ELSE POTENTIALLY LIKE RANSOMWARE. BUT GIVEN THAT CONTEXT AND THE U.S. GOVERNMENT IS REALLY BRINGING THE BELL AND RAISING THE ALARM ABOUT THESE CHINESE ATTACKS, THERE IS PAIN CLOSE ATTENTION TO SEE IF THERE'S SOMETHING DEEPER INVOLVED. >> YOU ARE DEEP ON THE CYBERSECURITY BEAT. THIS COULD BE A SECTION OF OUR BLOOMBERG TECHNOLOGY AUDIENCE THAT GOES, THEY ARE ATTACKING WATER INFRASTRUCTURE, SO SPEAK A LITTLE BIT MORE ABOUT THAT. WHY WATER INFRASTRUCTURE, AND DO WE HAVE REPORTING ON THE COMPETENCE OF U.S. COMPANIES, OF THE U.S. GOVERNMENT TO DEFEND AGAINST IT.

JORDAN: THE ANSWER TO YOUR FIRST QUESTION, WE SAW WITH THE ATTACK ON COLONIAL PIPELINE SEVERAL YEARS AGO. YOU DON'T HAVE TO ATTACK AN ACTUAL PIPELINE TO DISRUPT CRITICAL SYSTEMS, WHETHER THE U.S. OR ELSEWHERE. YOU ONLY HAVE TO DISRUPT THEIR I.T. SYSTEMS. IN THE CASE OF COLONIAL PIPELINE, WHICH DISRUPTED GASOLINE SHIPMENTS ACROSS THE EASTERN U.S., IT WAS THEIR I.T. SYSTEMS, THEIR BUILDING SYSTEMS WENT DOWN AS A RESULT OF RANSOMWARE ATTACKS. THERE'S A LOT OF DAMAGE AND DISRUPTION THAT HACKERS CAN DO BY SIMPLY DISRUPTING EVEN JUST THE I.T. SYSTEMS OF SOME OF THESE CRITICAL INFRASTRUCTURE PROVIDERS, WHETHER IT'S ELECTRICITY PROVIDERS OR WATER PROVIDERS, WHETHER IT'S GASOLINE SHIPMENT COMPANIES, SO THERE'S A

POTENTIAL GREAT ADVANTAGE OF FOREIGN NATION COULD HAVE IF THEY DECIDE TO DISRUPT IN THAT WAY. WITH REGARDS TO THE COMPETENCE OF CRITICAL INFRASTRUCTURE PROVIDERS, WE'VE DONE A LOT OF REPORTING ON THIS TOPIC AND ANSWER TO YOUR QUESTION IS IT VARIES. THE LARGEST COMPANIES, THE LARGEST ELECTRICITY SUPPLIERS IN PARTICULAR TENDS TO BE PRETTY GOOD AT CYBERSECURITY THEY'VE GOT BIG BUDGETS. BUT AS YOU GO DOWN THAT LADDER FOR THESE SOURCES IN PARTICULAR IT REALLY JUST VARIES. THERE ARE SOME VERY LARGE CRITICAL INFRASTRUCTURE DIVIDERS -- PROVIDERS THAT ARE JUST NOT AS GREAT AS OTHERS. ED: WE ARE GRATEFUL FOR THAT REPORTING, THANK YOU. UKRAINIAN HACKERS SAY THEY CARRIED OUT A CYBERATTACK THE

TOOK DOWN ONLINE BROADCASTS OF RUSSIAN STATE TV AND RADIO CHANNELS, ACCORDING TO OFFICIALS IN KYIV. AT LEAST 20 RUSSIAN BROADCASTERS WERE AFFECTED. THE CLAIMS COULD NOT BE VERIFIED BY BLOOMBERG NEWS. PRINT THE DISRUPTIONS TO THE BROADCAST COINCIDED WITH RUSSIAN PRESIDENT PUTIN'S 72ND BIRTHDAY. CAROLINE: BACK IN THE U.S., STATE AND LOCAL OFFICIALS ACROSS THE COUNTRY ARE BRACING FOR A OF POSSIBLE DISRUPTIONS, OCCLUDING CYBERATTACKS AND DISINFORMATION, UNRULY CROWDS AHEAD OF THE U.S. ELECTIONS NEXT MONTH. YOU WENT TO ARIZONA AND YOU ARE FOCUSING ON THE COMPUTER SYSTEMS IN PARTICULAR AROUND VOTING IN ARIZONA. WHY, REMIND US?

>> ARIZONA FOUR YEARS AGO WAS THE SCENE OF ONE OF THE BIGGEST FLASHPOINTS IN THE 2020 ELECTION. THERE WAS AN ASPECT TO WHAT THEY DID AT THE TIME THAT THEY REALLY LEARNED FROM GOING FORWARD. ONE OF THE FIRST THINGS WAS PHYSICAL SECURITY AS WELL AS CYBERSECURITY. A FENCE WENT UP TO PROTECT THE WORKERS INSIDE AND THEN THEY BEGAN THE SYSTEM OF TRYING TO REACH FOR UTMOST TRANSPARENCY. AT WHAT HE FOR OUR LIVESTREAM CAMERA BUT DOESN'T EVEN HAVE TO WORK OUTSIDE OF ELECTION SEASON AND THAT IS GOING 365 DAYS A YEAR, 24 HOURS A DAY, SEVEN DAYS A WEEK. THEY ARE INVITING PEOPLE TO COME IN TO TOUR AND LOOK AT THE COMPUTER SYSTEMS, TO SEE THAT EVERYTHING IS SERIALIZED, EVERYTHING IS TRACKED.

ALL THE NETWORKS OR AIR GAP SO THEY ARE NOT ACTUALLY CONNECTED TO THE INTERNET. WHATEVER WAYS PEOPLE MIGHT THINK THERE IS A POSSIBILITY THAT THEIR VOTE COULD BE HACKED, THE PEOPLE IN ARIZONA ARE DOING THEIR UTMOST TO REALLY PUSH BACK AND TRIED TO DISPUTE A LOT OF THOSE CONSPIRACY THEORIES. ED: FOUR YEARS AGO I WAS THERE POSTED ON THE ELECTION TRAIL IN MARICOPA COUNTY AND I THINK IT IS WORTH DISCUSSING THE BASICS OF WHAT WE ARE TALKING ABOUT. IT IS A BUILDING. IT HAS WINDOWS AND BRICKS AND MORTAR AND THEY ARE MAKING MODIFICATIONS TO IT BECAUSE INSIDE THE BUILDING THEY WILL COUNT VOTES. TAKE IT FROM THERE AND RUN WITH THE REST OF THE STORY. JAMIE: TO GO INTO THIS BUILDING NOW.

FOUR YEARS AGO, WE LITERALLY CONSPIRACY THEORIST ALEX JONES MADE IT INTO THE BUILDING A COUPLE OF DAYS LATER. ONE OF THE PEOPLE WHO WAS A PROTESTER IN THE JANUARY 6 ATTACK ON THE CAPITAL WAS IN THE PARKING LOT. HEAVILY ARMED PEOPLE WERE IN THE PARKING LOT. AND NOW YOU CANNOT GET IN THERE WITHOUT ACCESS TO SECURITY CLEARANCE. THE ROOM WHERE ALL THE BALLOTS ARE TABULATED IS A PLACE WHERE YOU CAN ONLY GO IN IF YOU HAVE SECURITY CLEARANCE. EVERY SINGLE MACHINE IS AUDITED AND TRACKED AND CHECKED. THEY HAVE LITERALLY DONE EVERYTHING THEY CAN TO GET AHEAD OF ANY POSSIBLE QUESTION ABOUT ANY IRREGULARITIES OR REDUNDANCIES. THERE IS A MACHINE THAT SIFTS THROUGH THE BALLOTS AND IF ONE OF THOSE BALLOTS WEIGHS JUST A

LITTLE BIT DIFFERENT TO THE REST. THEY BASICALLY WILL GET RID OF -- THEY WILL CANCEL OUT THE BATCH. THEY ARE REALLY DOING EVERYTHING THEY CAN HEAR. ED: TERRIFIC REPORTING, THANK YOU VERY MUCH. COMING UP, AMAZON'S RETURN TO OFFICE PUSH. WE WILL DISCUSS THE CONTROVERSIAL DECISION. THAT'S COMING UP NEXT, THIS IS BLOOMBERG TECHNOLOGY. ♪ >> THIS IS A FIRST LOOK INSIDE THE WORLD'S FIRST HUMANOID ROBOT ASSEMBLY PLANT. HERE AGILITY ROBOTICS WILL HAVE A -- AND IS DESIGNED TO WORK AT FIRST AT WAREHOUSES INCLUDING AMAZON. FACTORIES ON FORMER AGRICULTURAL LAND ON THE OUTSIDE OF OREGON'S CAPITAL. JONATHAN HEARST PROVIDES -- AND OF COURSE THERE IS AMAZON WAREHOUSE NEARBY. THE FIRST DESIGN WAS IN A POD

CALLED THUMPER. SOPHISTICATED SPOTS WITH ARMS FOR SENSORS. SIMULATE STACKING TOTE BINS AND LISTING THEM ON CONVEYOR BELTS. ONE DIGIT TRIED TO PLACE A STACK OF BINS ON TOP OF ANOTHER BUT WAS OFF BY A SMALL MARGIN. THEY PAUSED AND WATCHED AS THE SOFTWARE TRIED TO WORK OUT WHAT TO DO AND GAVE UP. THE COMMUNICATION SYSTEM AT FIRST AGILITY DIDN'T PUT HEADS ON THE ROBOTS PRINT THEY STARTED WITH THE GOAL OF BUILDING THE THAT MOVING HUMAN SPACES. THE FIRST DIGIT MODEL STARTED WITH LIFTING TOTES AND THEY ARE ADDING OTHER DEVICES. THEY WILL BE ABLE TO CHURN OUT 10,000 ROBOTS A YEAR. THEY ARE STILL DOCUMENT AND ASSEMBLY PROCESSES FIGURING OUT WHICH TOOLS SHOULD GO WHERE.

THE FIRST ROBOT ASSEMBLED HERE WILL BE COMPLETED SOMETIME THIS MONTH. CAROLINE: TALKING OF AMAZON A RARE DOWNGRADE CITING CONCERNS OVER THE, PLEASE MARGIN TRENDS INTO NEXT YEAR SAYING GROWTH IN THE CLOUD COMPUTING BUSINESS IS UNLIKELY TO HELP MUCH. WELLS FARGO SECURITY CUT TO EQUAL WEIGHT TO OVERWEIGHT AND CUT THE PRICE TARGET TO 180 THREE DOLLARS. ONE OF THE LOWEST ON WALL STREET EVER PRINT WE WILL HAVE MORE ON THAT LATER. ED: AMAZON DECIDED TO BRING QUARTERLY -- EMPLOYEES BACK TO THE OFFICE FULL-TIME. SOURCES ARE TELLING US THERE IS A REASON FOR THAT AND THE REASON IS CULTURE, EXPLAIN THAT? >> ANDY JASSY IS SAYING NEW HIRES AND AMAZON DOUBLED IN SIZE THROUGH THE PANDEMIC THE

NEWLY HIRED AMAZON EMPLOYEES STARTED GETTING THE CHANCE TO LEARN AND UNDERSTAND THE CULTURE THE WAY THEY WOULD IF THEY WERE WORKING IN THE OFFICE ALL WEEK LONG. THEY ARE CURRENTLY AT THREE DAYS A WEEK, THERE'S A LOT OF WHAT THEY CALL COFFEE BADGING GOING ON. PEOPLE BADGING AND, GRABBING A COFFEE, HEADING HOME AND DOING THE REST OF THE DAY HOME SO THREE DAYS IS NOT ENOUGH TO HAVE THAT OVERLAP OF PEOPLE WITH YOUNGER EMPLOYEES ARE GETTING THE OPPORTUNITY TO LEARN. CAROLINE: THIS IS SOMETHING ANDY JASSY IS VERY PASSIONATE ABOUT. >> THAT'S WHAT HE IS SAYING. HE WROTE A VERY LONG NOTE TO EMPLOYEES EXPLAINING IT AND THEN THE PUSHBACK YOU MENTIONED

CULTURE MULTIPLE TIMES. THE PUSHBACK IS YOU'RE TRYING TO PLAY MORE PEOPLE OFF AND THIS IS A WAY TO THIN THE RANKS. THE TRUE ANSWER IS IT'S PROBABLY A LITTLE BIT OF BOTH. THEY WANT TO PUMP THE CULTURE AND THIN THE HERD. CAROLINE: SPENCER, WE THANK YOU. APPLE GETS A DOWNGRADE AS ANALYSTS CONTINUE TO DOUBT HYPE AROUND THE LATEST IPHONE. THIS IS BLOOMBERG TECHNOLOGY. >> WELCOME BACK TO BLOOMBERG TECHNOLOGY. ED: TAKING A QUICK LOOK AT MARKETS. IT'S HARD TO SUMMARIZE WHAT'S GOING ON BEYOND STRONG JOBS DATA ON FRIDAY FOR THE MONTH OF SEPTEMBER PARING BACK THE INCREMENT WE EXPECT TO CUT RATES. MODESTLY LOWER BASICALLY FLAT.

THE SEMICONDUCTOR INDEX IS FLAT. THERE ARE SOME SINGLE NAMES MOVING TO THE OUTSIDE. BITCOIN PUSHING ABOVE 63,000 U.S. DOLLARS PER TOKEN PRINT. THERE'S A LOT OF ANALYST NOISE OUT THERE. APPLE WAS DOWNGRADED OVER IPHONE SALES PESSIMISM FOR THE ANALYST SAYS HIGH EXPECTATIONS FOR THE IPHONE 16 AND 17 ARE PREMATURE AND ANALYST NOTE ON AN IPHONE 17 THAT DOES NOT EVEN EXIST YET. CAROLINE: ONE THAT WE WILL BE DIGGING IN WITH ANOTHER ANALYST AT THE MOMENT. BUT LET'S TALK ABOUT WHAT DOESN'T DOES NOT EXIST. MARK IS WITH US AND YOU BEEN WRITING OVER THE WEEKEND ABOUT THE CADENCE WITH WHICH APPLE GIVES US PRODUCTS AND ULTIMATELY ABOUT THE TIMING MISMATCH PERHAPS WITH WHAT'S ACTUALLY ON THE MARKET.

>> IT'S INTERESTING BECAUSE MY POINT OVER THE WEEKEND, I THINK, IS VERY MUCH CONNECTED TO WHAT ANALYSTS ARE NOW SEEING. SOME OF THESE ANALYSTS ARE LATE TO THE GAME. THE ISSUE IS NOT NECESSARILY IPHONE 16, APPLE AND AI, OR THE IPHONE 17 VACUUM. I THINK THIS IS A COMPANY THAT IS SLOWLY PUSHING AWAY FROM THE INNOVATION SO MANY YEARS UNDER STEVE JOBS AND SO MANY YEARS UNDER TIM COOK AFTER JOBS. IT FEELS LIKE WE ARE AT A POINT WHERE, IN THE NEXT COUPLE OF YEARS, THEY ARE MOVING OUT OF THESE IDEAS. THEY ARE BEHIND MIXED REALITY. THEY'VE BEEN BEHIND, BUT THEY DO HAVE THESE CORE COMPETENCIES THAT CONTINUE TO KEEP THIS BUSINESS HUMMING: THE IPHONE, THE IPAD, AND THE APPLE WATCH. AND I THINK LOOKING AT THE

PHONE JUST AS THE ISSUE A LITTLE BIT TOO NARROW. THIS IS THE COMPANY THAT'S BEEN SEARCHING FOR THE NEXT BIG IDEA CATEGORY, AND THERE'S REALLY TWO SIDES OF THE COIN. AND DOES THAT EXIST. AT THIS POINT, I'M THINKING THE IPHONE IS NOT REALLY SOMETHING YOU'RE ABLE TO REPLICATE. THAT'S A ONCE IN A GENERATION, AND I'M NOT TALKING ABOUT A 10 OR 20 YEAR GENERATION. AND SO MAY THE EXPECTATIONS FOR SOME. >> UNLESS IT'S A DIFFERENT FORMFACTOR FROM SMARTPHONE WILL GET INTO LATER IN THE SHOW. THE UMBRELLA POINT OF THE NEWSLETTER IS APPLE HAS BEEN RELEASING A NEW GENERATION OF PRODUCT ANNUALLY, AND IT'S MOVED AWAY FROM THAT. BUT THERE WERE ADVANTAGES TO DOING ANNUALLY. THE TEAM KNOWS WHAT'S COMING,

INVESTORS KNOW WHAT'S COMING, AND THERE'S A HOLIDAY PR MARKETING CAMPAIGN THAT CAN GO ON. WHAT'S THE ADVANTAGE OF NOT DOING THAT? >> IT'S SLOWLY INCHING AWAY FROM THAT. AND I THINK THERE'S TWO REASONS. THERE ARE SO MANY PRODUCTS NOW IN THE PIPELINE. THERE'S SO MUCH STUFF, AND THE WAY THEY'RE FUNCTIONALLY ORGANIZED AS AN ENGINEERING ORGANIZATION MAKES IT SO EVERY TEAM HAS TO TOUCH EVERY NEW PRODUCT BEFORE IT'S RELEASED. BY, THERE'S NO IPAD DIVISION OR APPLE WATCH DIVISION. THIS IS A VERY CROSS-FUNCTIONALLY DESIGNED ORGANIZATION. THAT'S WHY THEY'VE BEEN SO SUCCESSFUL. THAT LEADS TO PRODUCT DELAYS, TO SOFTWARE DELAYS. NOW THEY KNOW THAT'S WHAT'S HAPPENING. AND SO APPLE INTELLIGENCE ROLLING OUT BETWEEN SEPTEMBER

AND JUNE. IT DIDN'T ALL COME OUT ON OCTOBER 28 WHEN I EXPECT APPLE INTELLIGENCE TO BE RELEASED. YOU SAW THE APPLE WATCH ULTRA TO BE RETAINED THAT MODEL FOR TWO YEARS IN A ROW SIMPLY SOME NEW BANDS AND UP COLOR OPTION. THE IPHONE SC IS UPDATED EVERY TWO TO THREE YEARS. YOU ARE SEEING THAT UPDATED EVERY YEAR. SO THEY'RE SLOWLY INCHING AWAY FROM THE ANNUAL CYCLE. WHICH IS SOMETHING IT CAN KEEP UP ANYMORE. YOU'RE GETTING MORE POLISHED PRODUCTS. GENERATIONAL REGENERATION POTENTIALLY IN MORE UNPRODUCTIVE ABILITY FROM APPLE. OVERALL IT'S A MIXED BAG BUT I LEAN TOWARDS THESE GENERATIONAL UPDATES BEING A GOOD THING. THE ONE PRODUCT AND DON'T THINK WILL BE IMPACTED BY THIS THERE SO LOCKED INTO THAT YOU CAN REALLY BACK YOUR WAY OUT OF IT.

IT'S TOO IMPORTANT, AND THE STOCK PRICES ROCKETING. IT'S REALLY THE PERIPHERALS AROUND THE MAIN BREADWINNER. ED: I WOULD SAY IT'S A MUST-READ FOR THE WEEKEND. THANK YOU VERY MUCH. LET'S GET MORE ON THIS TALK ON APPLE. JORDAN IS WITH US. THERE'S A LOT OF NOISE THIS MORNING ABOUT WHAT IS IPHONE 16 OVERHYPED, JEFFRIES EVEN MENTIONING 17, WHICH IS FICTIONAL AT THIS POINT. IT DOES NOT EXIST AS FAR AS WE KNOW. WHEN YOU SIT DOWN AT YOUR DESK AND GET THE CALLS FROM CLIENTS, HOW ARE YOU REACTING TO ALL OF THAT? >> THIS IS A RITE OF PASSAGE FOR APPLE EVERY SEPTEMBER-OCTOBER. EVERYONE LOVES TO GO OUT AND DO THEIR CHECKS FOR HOW LONG DOES IT TAKE TO GET A

PHONE ONCE YOU PLACE THE ORDER. AND THAT'S THE LEAD TIME ANALYSIS TO TRY AND JUDGE DEMAND. I THINK IT IS KIND OF NONSENSE. PEOPLE LIKE TO DO THOSE, OF THE PRESS AND MEDIA PICK THEM UP BUT AT THE END OF THE DAY YOU DON'T REALLY KNOW HOW WELL THE CYCLE IS UNTIL NEXT SPRING AND THEN BY THEN EVERYONE'S LOOKING AT THE NEXT VERSION. IT'S ALWAYS KIND OF ONTO THE NEXT THING AND I THINK FROM THE STANDPOINT OF WHERE I'M FOCUSED IS NO ONE REALLY EXPECTS THE 16 TO BE SOME GAME-CHANGING IPHONE CYCLE. IT'S NOT GOING OUTPERFORM EXPECTATIONS OF ANYTHING. IT'S EXPECTED TO UNDERPERFORM. THAT'S WHY THE STOCK HAS BEEN LAGGING. BUT MOST IMPORTANTLY IS KIND OF THE 17 WITH THE NEXT PHONE NEXT FALL. THAT WILL BE THE SECOND ITERATION OF THEIR AI SOFTWARE.

WHICH HOPEFULLY IS THEN GET TO DRIVE MORE OF A REPLACEMENT CYCLE AND GET PEOPLE EXCITED. >> COULD YOU SUMMARIZE WHAT INVESTOR ATTITUDES ARE TOWARDS APPLE HOLISTICALLY RIGHT NOW? >> THEY ARE NOT GOOD. I THINK EVERY DAY YOU GET ANOTHER CELL SIDE REPORT THAT IS NEGATIVE OR CAUTIOUS IN TERMS OF SUGGESTING DEMAND IS WEAKER THAN IT WAS A YEAR AGO. THE PHONE ISN'T SELLING WELL. THEY WILL START CUTTING UNIT PRODUCTION BY DECEMBER, AND THAT PERMEATES ACROSS THE INVESTMENT COMMUNITY. MOST PEOPLE ARE LIKE, IT IS A MAJOR STOCK. I HAVE TO PAY ATTENTION. I HAVE TO HAVE SOME WAITING IN MY PORTFOLIO RELATIVE TO MY BENCHMARK. BUT MOST PEOPLE JUST TAKE A VIEW THAT UNLESS I TAKE THIS SURPRISE, I CAN UNDERWEIGHT.

THE STOCK AND NOT WORRY ABOUT MISSING ANY ALPHA. THAT'S WHAT THEY ARE DOING. THEY'RE GOING INTO OTHER NAMES, PARTICULARLY THE MAG SEVEN. THE SETUP WORKS BETTER. SO ALL I'M SAYING IS THE SENTIMENT COULDN'T BE THAT MUCH WORSE THAN IT IS NOW. >> IT'S ACTUALLY ABOUT 4% OFF OF ITS RECORD HIGH IN TERMS OF SHARE PRICE. STILL OFF OF $3 TRILLION. IS THIS JUST GOOD TO BE SIDEWAYS TRADING? WE SORT OF PRICED IN THAT ANXIETY. >> THAT'S A GREAT POINT, AND THAT'S WHAT I WAS NOTING TODAY. WHO WOULD'VE GUESSED APPLE SHARES WERE UP 17% THIS YEAR. IT'S A LITTLE BELOW THE MARKET, BUT IT'S BETTER THAN A LOT OF OTHER NAMES, PARTICULARLY IN SOFTWARE, AND IT'S BETTER THAN GOOGLE. IT IS ACTUALLY BETTER THAN

MICROSOFT. SO I THINK AGAIN THAT SHOWS YOUR POSITIONING AND SENTIMENT IS ALREADY DOWN. AND EVERY TIME WE GET A NEW UPDATE OR WE GET CLOSER TO THE EARNINGS REPORT LATER IN OCTOBER, I THINK THIS SURPRISE TO THE DOWNSIDE FACTOR GETS MORE AND MORE PRICED IN OR EXPECTED. SO AGAIN, IT COULD BE AN UNDERPERFORMER AND A LAGGARD. I DON'T THINK IT'S CAN ALL OF A SUDDEN THE RATE AND TRADE DOWN MATERIALLY. I THINK A LOT OF PEOPLE WHO MIGHT BUY THE STOCK IF IT EVER GOT CLOSER TO $200. >> JORDAN KLEIN GETTING CALL SPREAD THINGS FOR ANSWERING TODAY. MEANWHILE, TECH DATA 2024 IS KICKING OFF TOMORROW AND THE COMPANY PLANS TO SHOW HOW THE GROUP IS INTRODUCED AI APPLICATIONS INTO THEIR

PLATFORMS. >> IPHONES, NINTENDO SWITCH, EVEN RING DOORBELLS, BOX, -- FOX, IS MAKING THESE AND MORE. ALLOWING TO BUILD AN ENORMOUS BUSINESS. GENERATING NEARLY $200 BILLION IN REVENUE LAST YEAR. BUT THE MARKET FOR MANY TYPES OF ELECTRONICS, IN PARTICULARLY SMART, IS MATURING. FOXCONN WANTS TO MOVE OFF THE VALUE CHAIN TO THOSE THAT GENERATE BETTER PROFITS. AI SERVES AS ONE AREA WHERE IT'S MAKING PROGRESS. SALES HAVE RISEN AS FOXCONN WORKS WITH THE LIKES OF NVIDIA, MICROSOFT, AND AMAZON ARTIFICIAL INTELLIGENCE INFRASTRUCTURE. SEMICONDUCTORS IS ANOTHER FILL WITH A FOCUS ON OLDER, LESS SOPHISTICATED CHIPS. AT PRESENT, THESE MOSTLY GO TOWARDS IN-HOUSE NAMES INCLUDING EEEV'S.

THIS IS AN ADDITIONAL SPACE FOR THE TAIWANESE COMPANY WANTS TO COMPETE. WITH A VALUE PROPOSITION SIMILAR TO WHAT IT ONCE HAD FOR APPLE. THEY CAN MOVE PART OR ALL OF THE CAR IN LESS TIME AND AT LOWER COST. >> WE BELIEVE DESIGN MANUFACTURERS GO THE SAME WAY AS THE SMARTPHONES. SO WE WILL HAVE 40 TO 45 -- >> GOLDMAN SACHS IS OUT -- SAYS OUTSOURCING COULD BE WORTH $140 MILLION BY THE END OF THE DECADE. BUT WITH FOXCONN STILL DECIDING ON A MAJOR CUSTOMER'S GRANDEST AUTO AMBITIONS ARE YET TO BE REALIZED. >> THAT WAS BLOOMBERG'S ANNABELLE ON THE PUBLICLY TRADED ARM OF THE COMPANY WE ALL KNOW AS FOXCONN. COMING UP AR GLASSES PICKING UP EXPANDING ITS RETAIL FOOTPRINT.

AROUND THE WORLD, WE WILL SPEAK TO ITS CEO COMING UP NEXT. THIS IS BLOOMBERG TECHNOLOGY. ♪ AT APPLE, SPOTIFY, AND I HEART. THIS IS BLOOMBERG. ED: THE LACK OF A RED BOTTLE -- REBUTTAL WITH TAKEOVER SPECULATION BY TENCENT SUGGESTS THE DOORS OPEN TO A POTENTIAL BUYOUT. BLOOMBERG INTELLIGENCE RESEARCH POINTS TO POTENTIAL REGULATORY HURDLES GIVEN THE CURRENT GEOPOLITICAL BACKDROP. I THINK THIS MORNING YOU HAVE HEARD FROM UBISOFT TO HAVE ISSUED A BRIEF STATEMENT ABOUT THE REPORTING JUST SUMMARIZE WHAT THEY SAID. >> THEY BASICALLY SAID THAT UBISOFT IS USED TO REVIEW ITS STRATEGIC OPTIONS. THAT'S OPTIONS PLURAL. AND YOU SEE MORE ON THE REPORT IN TALKS FOR PRIVATE REPORT.

WITH TENCENT. BUT THEY JUST SAID THEY ARE BASICALLY WORKING ON OPTIONS. AND ALSO SAID THE MANAGEMENT WAS WORKING ON ITS CURRENT STRATEGY. >> REMIND US OF WHAT THE STRATEGY MIGHT BE ONE SHARE PRICE IS HALVED PERHAPS IT ASSESSES OPTIONS. >> THEY SAID THEY WOULD FOCUS ON THE OPEN WORLD GAMES, THAT'S A POINT THAT'S BEEN DIFFICULT FOR THEM RECENTLY BECAUSE THE RECENT STAR WARS GAME THAT DID NOT WORK VERY WELL AND THE NEXT ONE THE BIG ONE HAS BEEN PUSHED BACK TO FEBRUARY SO IT DOESN'T SAY MUCH ON THEIR STRATEGY OPTIONS RIGHT NOW. JUST UNDERSTANDING THE TALKS ARE UNDERWAY AND TODAY ACTUALLY THE COMPETITOR DIDN'T REALLY LOSE THE GAME IT'S ALL ON THE MARKETS ON FRIDAY WHICH SAYS A LOT BUT NOW THEY'RE SORT OF

WAITING FOR THE NEXT STEP. CAROLINE: JUST FINISHING THE DAY A LITTLE BIT THERE, WE THANK YOU SO MUCH. SHARES SURGING AFTER IT WAS DISCLOSED EXOTICA HAS TAKEN A STAKE. THE EYEWEAR MAKER BEGAN TAKING NIKONS SHARES. THE RISE OF SMART WEARABLE EMERGES. EARLIER THEY PLAN TO INVEST MORE THAN $600 MILLION BY 2030 TO BOLSTER ITS LENSES AND OTHER OFFERINGS. ED: WE STAY IN THE REALM OF SMART WEARABLE SPREAD AR GLASSES MAKER IS ANNOUNCING IT WILL EXPAND ITS IN-STORE RETAIL PRESENCE OFFERING SALES ACROSS EUROPE, ASIA AND THE UNITED STATES. HERE WITH MORE IS THERE CEO AND COFOUNDER. WHAT WE ARE TALKING ABOUT IS THE HEIR TO PRO AND THE PUCK THAT GOES WITH IT TO CONNECT

WITH WHATEVER COMPUTER DEVICE YOU WANT IN THOSE GLASSES. BUT LET'S START WITH THE NEWS, WHICH IS YOU ARE BACKING PHYSICAL RETAIL. YOU WANT PEOPLE TO GO INTO A STORE, PICK UP THE GLASSES, AND BUY THEM. WHY THAT STRATEGY? >> PREVIOUSLY, OUR PRODUCT WAS AVAILABLE ON AMAZON. THIS IS SUCH A NEW, COOL GADGET. WE WANT PEOPLE TO COME INTO THE STORE AND TRY IT FOR THEMSELVES. >> I KNOW WHERE THAT'S FROM. >> I TRY THE ORION META-AR GLASSES. THE TECHNOLOGY DIFFERENCE BETWEEN WHAT META ANNOUNCED LAST WEEK AND WHAT YOU'RE DOING IS BASICALLY YOU CAN CAST ANOTHER DEVICE INTO YOUR GLASSES. IT DOESN'T HAVE ITS OWN OPERATING SYSTEM. HOW MUCH OF A LIMITATION IS THAT FOR YOU? WHERE DO YOU WANT TO TAKE THEM TO COMPETE WITH ORION, WHICH ISN'T GOOD TO BE SOLD IN ITS CURRENT FORM.

FIRST OF ALL, YOU HAVE TO GIVE A LOT OF CREDIT AND EVEN SNAPCHAT FOR THOSE BIG TECH COMPANIES GETTING INTO THE SPACE. THIS IS VERY IMPORTANT. VALUE-BASED THE FUTURE OF THE MARKET. WHAT WE ARE TRYING TO DO IS WE ACTUALLY DELIVER SOME PRODUCT THAT PEOPLE CAN USE TODAY, SO THAT'S WHY THIS PRODUCT STRATEGY WE ARE TAKING IS GIVING A FULLY SPATIAL COMPUTING IN THAT SPACE THAT'S MORE COMPLICATED. TO RAISE THAT AND PROVIDE A KIND OF PHILOSOPHY. SO PEOPLE CAN EASILY USE OUR GLASSES AND ALSO LOOK LIKE SUNGLASSES THIS WAY SO THEY CAN PLUG INTO YOUR CELL PHONE OR YOUR LAPTOP. SO THIS TURNS INTO A MUCH BIGGER HIGH-RESOLUTION VIRTUAL DISPLAY. AND THAT HAS BEEN PHENOMENAL. I SAW PEOPLE GOING FROM THIS TRADITIONAL FLAT SCREENS TO THE

VIRTUAL SPACE. >> PEOPLE ARE BUYING THESE IN NUMBERS. 430,000 WAS THE NUMBER ON THE SCREEN. WHERE ARE THEY BUYING THEM. WHERE IS THE CONSUMER FOR YOU, IS A MORE CHINA-BASED, ASIA-BASED OR IN THE U.S.. >> THIS IS A GLOBAL FOOTPRINT SO YES AS YOU MENTIONED WE ARE NEARLY HALF OF THE ENTIRE AR GLOBAL MARKET SHARE AND PEOPLE ARE LOOKING FOR CONSUMPTION SO THEY CAN STREAM MOVIES AND PLAY GAMES CONNECTING THOSE TWO IS A GOOD WAY TO GO. AND PEOPLE ARE EVEN CONNECTING FROM LAPTOP PRODUCTIVITY. >> SO WHAT THEN OF MANUFACTURING, WHERE THESE BEING MADE AT THE MOMENT FOR YOU ARE HEADQUARTERED OVER IN CHINA BUT YOU ARE A GLOBAL COMPANY WITH A GLOBAL FOOTPRINT BUT WHERE EXACTLY ARE THESE BEING SUPPLIED FROM. >> RIGHT NOW THIS IS MANUFACTURED.

IN THE SAME KIND OF PLANT AS THE APPLE VISION PRO. WE WANT TO LEVERAGE THAT KIND OF MANUFACTURING CAPABILITY AND EFFICIENCY IN CHINA. ESPECIALLY FOR THIS KIND OF NEW INDUSTRY AT THE VERY EARLY STAGE. ED: REALLY GREAT TO HAVE YOU WITH US IN SAN FRANCISCO, THANK YOU VERY MUCH FOR ENJOYING THE SHOW. THE JOKER SEQUEL FLOPS ON ITS OPENING WEEKEND HAULING IN LESS THAN HALF OF WHAT THE FIRST FILM EARNED IN 2019. WE HAVE THE STORY, THIS IS BLOOMBERG TECHNOLOGY. ♪ >> A MIXED OUTLOOK FOR NETFLIX ON WALL STREET, THE STREAMING GIANT WAS DOWNGRADED TO UNDERWEIGHT FROM EQUAL WEIGHT AT BARCLAYS BUT UPGRADED TO OVERWEIGHT FROM NEUTRAL. BARCLAYS IS QUESTIONING THE COMPANY'S VALUATION AS PIEPER

SANDLER GETS BULLISH ON MOMENTUM FROM ITS ADVERTISING STRATEGY. NETFLIX REPORTS EARNINGS NEXT THURSDAY. >> BOY, WAS IT A ROUGH START FOR THE JOKER SEQUEL. THE WARNER BROS. FILM OPENED AT $40 MILLION SALES, MUCH LOWER THAN THE PROJECTED $60 MILLION, AND COST $190 MILLION TO MAKE. LET'S DISCUSS WITH WHAT WENT WRONG. WHY DID NO ONE RUSH TO SEE IT. >> THEY REALLY GAVE DIRECTOR TODD PHILLIPS FREE REIN WITH THIS MOVIE, AND IT SEEMS LIKE IT WENT A BIT OVER-THE-TOP. THERE'S BEEN A LOT OF NEGATIVE WORD-OF-MOUTH REVIEWS; CRITICS ARE NOT LIKING IT. SO, WE THINK THAT CUT INTO PEOPLE SEEING IT IN THEATERS THIS PAST WEEKEND.

>> THE BAR WAS HIGH BECAUSE THE FIRST JOKER ALMOST HIT 100 MILLION IN ITS OPENING WEEKEND AND DID EVENTUALLY GROW -- GROSS ONE BILLION. IF ANYONE WATCHING BLOOMBERG TECHNOLOGY SAW IT AND LOVED IT. YOU KNOW WHERE TO FIND DESPERATE WE WELCOME YOUR FEEDBACK. IS IT THE WHOLE MOVIE THEATER VERSUS STREAMING DEBATE, THE BATTLE FOR EYEBALLS IN A BUSY WEEKEND. >> I THINK WE'VE SEEN SOME SUCCESSES IN RECENT MONTHS. DUNE TWO, BETELGEUSE BETELGEUSE. WARNER BROS. MOVIES DID REALLY WELL, THERE OBVIOUSLY IS THIS FIGHT TO GET EYEBALLS AWAY FROM STREAMING AND PEOPLE BACK INTO THEATERS AND THIS WAS A HUGE MESS. PEOPLE WERE EXPECTING THIS TO

LIVE UP TO THE EXPECTATIONS THE JOKER SET IN 2019. ED: I THINK THE FILM IS MORE THAN TWO HOURS LONG, ISN'T IT. >> PEOPLE WERE TAKEN ABACK THAT THIS IS A MUSICAL, THAT LADY GAGA WILL BE SINGING, AND THERE ARE SONGS, AND IT'S NOT AS GRITTY AS MAY. THE FIRST ONE WAS PRETTY >> YOU WERE SAYING IT TOOK EVERYONE BY SURPRISE. BUT THERE IS SOME FISK -- FIERCE COMPETITION. WHAT HAS GOT PEOPLE ELECTRIFIED? >> PEOPLE WERE INTO THE WILD ROBOT FILM, PEOPLE WERE LOOKING FOR MORE POSITIVE STUFF THAT THEY COULD ENJOY. GO TO WITH THEIR FAMILIES. SO IT WILL BE INTERESTING TO SEE AS WE GET CLOSER TO THE HOLIDAY SEASON HOW MOVIES FARE.

IN THEATERS. >> THIS COMES AS HOLLYWOOD ITSELF REELS FROM STRIKE ACTION, A LOT OF THAT TO DO WITH WHAT WE TALK ABOUT DAY IN AND DAY OUT, ARTIFICIAL INTELLIGENCE. WHERE DID THIS MOVIE GET MADE AND HOW AND WAS IT AS SYNONYMOUS TO THAT ISSUE. >> WITH THIS FILM THERE WAS A LOT OF ANTICIPATION AROUND IT. IT WAS FILMED IN NEW YORK, LOS ANGELES AND NEW JERSEY. THERE WAS A LOT OF EXCITEMENT PEOPLE LOVED JOAQUIN PHOENIX AS THE JOKER IN THE FIRST ONE AND I THINK IT JUST KIND OF GOT OUT OF PROPORTION. IT'S VERY DRAMATIC THERE'S A LOT OF COURTROOM DRAMA SCENES VERSUS THE CRIME THAT WE SAW IN GOTHAM IN THE FIRST ONE SO I DON'T THINK IT IS APPEALING TO

PEOPLE THE SAME WAY. >> EVERYTHING ABOUT THE MOVIES. >> RECAP ON THE PODCAST EXACTLY WHERE TO FIND IT. THAT SHOUTS OUT TO THE TEAM IN NEW YORK CITY AND THE CREW OUT HERE IN SAN FRANCISCO. THIS IS BLOOMBERG TECHNOLOGY.

China's Chip Sector Rally and Amazon's RTO | Bloomberg Technology

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Bloomberg Technology

China's Chip Sector Rally and Market Impact

China's chip sector is experiencing a $13 billion rally, driven by global investors betting on Beijing's financial support for the industry.

Semiconductor Manufacturing International (SMIC) is leading the rally with a 28% increase in stock price, while smaller competitors are also seeing gains.

The Chinese stock market's reopening and anticipated government stimulus for the semiconductor sector are contributing to the positive momentum, with investors showing increased interest in Chinese tech equities.

American Water Works, the largest publicly traded water and wastewater company in the U.

, was hacked, affecting its computer network systems and leading to the disconnection of some systems.

The company serves 14 million customers across half of the states in the U.

, making the attack potentially significant.

government has been warning about such attacks on water treatment facilities for months.

water systems, raising concerns about potential disruptive attacks.

government has warned about a group called Vault Typhoon, which is pre-positioning itself in critical networks for future attacks.

companies to defend against such attacks varies, with larger providers generally having better cybersecurity measures.

Arizona's Efforts to Secure Vote Counting

Arizona is taking extensive measures to secure its vote counting process, with all machines audited and tracked, and access to the building restricted to those with security clearance.

The state is using a ballot-sifting machine to ensure consistency, canceling out batches with any weight discrepancies.

These efforts aim to address and dispel conspiracy theories about potential vote tampering.

Apple's Shift in Product Release Strategy

Apple's semiconductor index is flat, with some single names moving up, while Bitcoin surpasses $63,000.

The company's recent downgrade is due to analyst pessimism about iPhone sales and high expectations for the iPhone 16 and 17.

Apple is gradually moving away from its annual product release cycle, leading to product and software delays, while still focusing on core competencies like the iPhone, iPad, and Apple Watch.

Investor Sentiment Towards Apple and Foxconn's Business Strategy

Investor attitudes towards Apple are currently negative, with concerns over weak demand and underperforming phone sales.

Despite this, Apple's shares have risen 17% this year, indicating some resilience in the stock.

Foxconn is shifting its focus to more profitable areas, such as AI and semiconductors, in response to the maturing electronics market, with plans to compete similarly to its former role with Apple.

Ubisoft's Strategic Review and Tencent's Interest

Ubisoft is exploring its strategic options amidst takeover speculation from Tencent, with the company's share price halved.

The gaming giant is focusing on open-world games, but has faced challenges with recent game launches.

Meanwhile, a smart wearable glasses maker is expanding its retail presence globally, aiming to offer customers a hands-on experience with their products.

Manufacturing Efficiency in China and the Joker Sequel's Struggles

A company is aiming to leverage manufacturing capabilities in China, similar to those of the Apple Vision Pro, for a new industry.

The Joker sequel had a disappointing opening weekend, grossing $40 million, far below expectations.

Negative reviews and a surprising musical direction contributed to the film's lack of success, amidst fierce competition for audience attention.