Breaking Down SpaceX’s First Earnings Report | The Close 8/4/2026

The countdown is on. Everything you need to get the edge at the end of the market day. This is the close. Reluctant or not. Record highs or record high. Live from studio two here at Bloomberg headquarters in New York. I'm Romaine Bostick. We check in on the markets as we count you down to those closing bells. The S&P 500 setting up for its 26 record high of the year, 54th in 12 months. And right now it's on as strong as four day run going all the way back to April 2025. Of course this does coincide with that drift lower in oil prices, which of course is tied up with that drift lower in yields. And oil is indeed the story. Once again, we want to focus on that because we are back on that downward channel from those march peaks back down below that 200 day moving average, which puts back down one year inflation expectations to near two year lows. The risk, of course, is that well, we've been here before. That downward channel we saw back in early April, it did give way to a spike back to those near year to date highs by the end of the month. Similar store from mid-May to mid-July. And with the rhetoric from various players in the Middle East sounding the same as before. The lingering question right now surrounds the follow through ambassadors, though. Well, they've learned not to look a gift horse in the mouth, and, unlike recent past, runs to record highs. This equity rally much broader sort of coming into today, Microsoft, Amazon and Apple combined made up 65% of the point gain in the S&P since the most recent low back on June 10th. However, after that, the dispersion, it's actually relatively even 337 names contributing over the past eight weeks, including visa, RTX, JNJ, Coca Cola, Home Depot and DoorDash. That is breath. Furthermore, the rally back to a record has been despite multi-week declines in Tesla, micron, Oracle, SanDisk, Nvidia and IBM. Now, curiously, though, the US record run is being match if not pace outpaced by, of all things Europe stock market. Remember them well, they haven't forgotten Europe, the only major region to have actually experience meaningful improvement in risk appetite in recent weeks. The Stoxx Europe 600 closing today at a record high. The German Dax, the French CAC doing the same as well, all supported by fresh capital inflows on the back of way better than expected earnings. I haven't seen such a strong earnings season in Europe in years. Um earnings revisions breath has shot up to the high teens, so the net percent of analysts upgrading their numbers is very high. It's higher than the U.S. now. Um, if you look at earnings revisions by sector, almost every sector is now in the green, by the way, including luxury, which is unusual. Um, and we have earnings growth consensus for this year. I think some people drop off their chair when they hear this, but it's 17%. I mean, Europe normally does 0 or 1%. We're doing 17% growth this year. Um, so we're seeing we're seeing more interest in European equities, in part because of the strong earnings season. And that sets up the global rally here as we move closer to the closing bells in the U.S. with the non-US Lydia, portfolio manager of global equity over at Invesco. And Ananya, before we get to what's happening here in the U.S., I do want to get your thoughts about sort of the global nature of this rally, and I am curious if some of the gains that we've seen in Europe is that tied to the eye race, or is it kind of divorced from that altogether? It's hard to find pockets of the market that are entirely divorced from the eye race of this point. Um, so much of what we're seeing in Europe is part of the year. Um, Europe has several semiconductor companies that are fully involved in the race. Um, but on the flip side, Europe also has health care companies, which are one of the two pockets that are divorced from the heiress, and then part of the earnings upgrades that we will just listening to from your, uh, from the clip you played. Um, I also from energy companies that Europe has a lot of. So give me a sense here. When we start to talk about if not outperform and certainly matching performance that we've seen in Europe and to a certain extent even in and some of the pockets of emerging markets, even if you exclude, uh, Korea in that, uh, is that something that sustains itself for much longer, or is this just one of those cycles where people sort of discover that there is life outside the U.S. until they get scared about something and they come right back to U.S. assets? If you think that the eye trade is one that sustains itself for much longer, which, you know, I think most of us tend to think, although obviously there will be hiccups and bumps along the road. Um, absolutely. What we're seeing in Europe, um, in pockets of Europe and certainly in East Asia, is highly sustainable. Much of the semiconductor trade is actually the value chain is coming out of Korea. Um, Taiwan, Japan, even the Netherlands. And those companies, uh, really making here while the sun shines. Um, we've discovered as a world that some of them have bottleneck assets and not a lot of competition. So this has legs. When we talk about legs overall to the eye race, there's been a lot of talk how we're kind of moving. Investors are moving their attention away from, uh, just the companies that are sort of trafficking and the large language models more to sort of physical eye, uh, and uh, sort of the, and use cases. Are you seeing opportunities there at all? You know, with the eye trade. Um, it's almost a game of, um, you know, what Warren Buffett calls, uh, the manic depressive market where Mr. Market wakes up every day in a different mood. And so overall, you see the market moving from the limbs to the physical trade to bottlenecks. But essentially, the market is that there is method to the madness. And what the market is trying to do is figure out what is the one job that the market has always had. What is the core earnings power of this business model and where does the value accrue? And the data points are coming in so fast and so furious that it seems to change on a daily basis. And it can feel manic and it can feel volatile. But that is essentially the journey that the market is on. This earnings season, which still isn't over, but has it given us any more clarity on that earning on what that earnings power is? Yes. So the July trade, the first cliffhanger is will they won't they? As far as the hype, the scale of CapEx goes. Right. Um, God forbid that they scale it back as far as all the bulls are concerned. And so this earnings season definitely gave us clarity that hyperscale CapEx continues. It also gave us some clarity that the market is beginning to sift through winners and losers, and is appropriately punishing companies that where the free cash flow is questionable and rewarding, companies where there's free cash flow. And so we have clarity that the trade continues. And increasingly we're getting clarity around who the winners and losers are. Where are the bottlenecks. But on the bottlenecks, what the market is constantly grappling with is, you know, a bottleneck on the existing new supply comes on. So that's where some of the volatility is, um, you know, below the level of the hyperscalers and the core players. Are there any concerns? Looking at the economic picture and more importantly, the macro and yield picture, are there any concerns about that? If the cost of capital does materially increase that that sort of disrupt the I trade? I know we had a little bit of a scare last week when yields here in the U.S., long term yields spiked, although this subsided a lot, primarily because of the drop in oil prices. Historically, all big bull runs have come to an end, with the fed pulling away the punchbowl and raising rates. But in this case, there are a couple of nuances. Um, first of all, let's just say the fed increases rates by 25%, even 50%. Is that enough to stop hyperscale CapEx? The consensus view and I agree, it's probably no, because if you can see returns on invested capital on for the hyperscalers on that investment, the markets are supportive. They will continue to probably invest. And then, um, macro is always important. If something breaks in the macro then all bets are off. But right now it's the micro driving the macro, right? It's the eye, um, minutia of hyperscale CapEx, bottleneck spend, etc. that is more, uh, preoccupying equity investors right now than, uh, interest rates. But see, as long as we stay in even bands, as long as we stay in even bands, you think that's going to continue for a while. That's where we're at right now. So the consensus view is that the fed hikes into the end of the year. But I think we have a few data points and a lot of wood to chop before we can be sure of that. Um, you know, every day the headline changes around what's going on in the Middle East that impacts oil, that impacts the cost of capital. So so we'll see. But right now, it all looks like walls of worry that, uh, not insurmountable that the market will probably climb. So equity investors are definitely much more focused on the spending in the eye right now. All right. And on your great to have you here on the program. Ananya Lodi, a portfolio manager of global equity at Invesco, kicking us off to the close. When we come back after the break, we're going to talk about the big deal and a cultural collide in the world of creator driven media. Richelieu Denis is the founder and chair of the sundial Group, joins us in just a second to talk about a key strategic investment. And from culture to horticulture, Scotts Miracle-Gro has a new growth algorithm, its CEO, Nate Baxter, just coming off the heels of his Investor Day. He's going to stop by the program here to tell us what he had to say to those investors. And after the bell tonight, we're going to hear from SpaceX full coverage of the company's first earnings report. As a public company, we're going to hear from former Tesla board member Steve Wesley, former Harvard researcher Jenny O'Sullivan, as well as Ross Gerber and so much more. Stick with us. This is the close on Bloomberg. The media landscape shifts and for some folks, try to keep up. Earlier today, we sat down with Richelieu Dennis, the founder and chair of the sundial Group of companies, as his brand, Essence Ventures, makes a strategic investment and Off Script Worldwide, the parent company of revolt. Now the move brings together two storied brands in a play to boost scale across several generations of audiences. Here's what he had to say. The beauty of the brands that we look at are they have to be brands that have a cultural resonance and value to the communities that we serve. So there has to be deep trust has to be authentic, and it has to have the, um, what we like to call the North Star. Right. And that North Star, uh, for us, that North Star is. Can you use a business to develop a community? Right. And does that fit within our framework of community development? And so as we look out, as we look out beyond sort of what's happening in the next 12 months, 18 months, but looking at it to say, okay, what we need to have 50 years from now, what can be relevant 50 years from now, what can drive economic value 50 years from now. As well as cultural value and heritage. Revolt is stands out and what they're doing at off script we love. Well, give me a sense here. When we talk about culture. That's the essence is an iconic brand that, uh, I think every black family, every certainly every black woman had on their, uh, coffee table back in the days that brand has, is extended to a new generation. Revolt kind of came about after the fact, speaking to a newer, younger generation. What's the thread they're combining? Yeah. So the the thread for us is multi-generational, right? We we look at like I said, we're looking 50 years out. We want brands that are here 50 years out. We want to build businesses that are here 100 years from now. So multigenerational becomes a big, big part of that strategy, right? And so if you take a look at essence, right? Essence is now truly a multigenerational brand, right? You go to festival, you see it in person. You look at our data, You see it in the data, right? We're truly serving multiple generations. Right. With that, with that brand, with the content. With the festival, all the experiences there. Right. Revolt has revolt is now on its second generation, if you will. Right. Whereas essence is probably pushing on its fourth generation. Right. And so we like brands that have that type of staying power. Right. In addition to that, where it fits in is, you know, essence women, women, women, women, right. Refinery29. Women women. Women, women. Women are driving the economy. They are making the decisions in the household. They are influencing. But what revolt has are the men that they care about, right? And the men that care about them. And so what we're now able to do is to offer to the entire marketplace a sort of nucleus around youth culture, multigenerational youth culture. And then underneath it all now infrastructure and scale. Essence Fest is one of the biggest festivals out there. Huge economic impact for the city of New Orleans, where it's been held now for, what, 30 years or 30 to 32 years or something? Uh, but I know the contract with New Orleans is over. There's been some talk as to whether essences will actually return when you have quantifiable economic impact in the hundreds of millions of dollars. Yes. Why is there a debate about whether you'll be back? No, I don't think the debate is whether or not will be back. And or let me rephrase that. Whether the debate is whether or not we'll be back in New Orleans. Right. So we just we just had festival July 4th weekend. 505,000 people showed up, according to the, the the, um, uh, the papers in New Orleans and the people that are keeping the data there. Right. We had, you know, 50, 60,000 people come through the convention center a day, free, right? Over 460 hours of programming for those for those people that came by free, right. The economic impact is tremendous. With with our partner hotels, we're running 95 plus hotel occupancy in the middle of the night, in the middle of summer and one of the hottest weekends of the year. So we're driving a tremendous amount of economic impact there, and we're working with the city so that we continue to do that and we continue to grow, right. It's not the question isn't whether or not we will essence will be back. The question is, hey, will it be back in the city of New Orleans? Do you think it will be there next year? We are working like hell to make that happen, right? We're going to work because our community deserves what it is that we that we bring to market. And New Orleans has been a partner for 32 years. They've been a good partner for 32 years while. And we've seen investments shrink, right? We certainly expect that we will be able to come to terms and continue what we're doing. We're excited. We're excited about next year. I am curious how you merge and sort of how you balance out the content creation side of the business, the live event side of the business and everything that goes in between. I know you didn't disclose details, financial details of the deal with off script. Do you want to disclose that? No. Okay. Um, but but give me a sense here because, I mean, you bought a refinery. Obviously you have refinery $0.29. I mean, is the return, the potential return that you get off of this partnership, this minority investment in off script. Is that going to potentially be as accretive as those other deals that you've made? So I think so, um, because what we're now able to do is to bring infrastructure together, bring capabilities together. And I said earlier, drive that scale. Right. So we're we're excited about the opportunity to be able to do that. And I think one of the other things is we don't need to own everything, but what we do need to be able to do is to be able to access everything. This gives us the access that we need. This gives us a great team over there to to work with alongside our great team over at, at uh, at essence. We now have the opportunity to to merge our, our inventories, our product, to go to go to clients with, with bigger offerings and better offerings. So that's that's very exciting. And the other thing for us is it's also important that these brands that have been driving our culture are here when we're not here. Right. So so we're also looking at it through those lenses. That was Rich Dennis, the founder and chair of the sundial Group of companies, talking about his minority investment in off script. And you can catch the full interview by going to Bloomberg.com. Slash videos. And when we come back, we turn back to the public markets and take a closer look at McDonald's out with its earnings report today. It beat on several metrics but a bit of a slowdown in same store sales growth. We're going to catch up with Mizuho next session when we come back after the break. To get his assessment of what might come next. This is the close on Bloomberg. Time now for our top calls. The big movers on the back of analysts recommendations. We start off with Nike JP Morgan, which cut its overweight rating to neutral four months ago today, downgrading again, this time to underweight. The analysts saying Elliott Hills win now turnaround strategy taking longer than anticipated and will continue to weigh on finances beyond this year. The shares, which rallied 2% yesterday, giving pretty much all of that back today. Next up Palantir, Deutsche Bank upgrading to, uh, upgrading after Palantir's quarterly results and full year forecast came in ahead of estimates, the analysts are seeing Palantir operating several steps ahead of the rest of the software space and converting AI demand into real customer value those shares up 30% their best day going back to 2024. And we're going to end with Walmart Oppenheimer downgrading to a neutral equivalent on what the analyst says may be a second quarter comp sales number that could mistreat expectations. When the retailer reports in a couple of weeks, the $440 price target being removed, the shares go up slightly on the day. And those are some of our top calls. Another stock we're watching is McDonald's. They opened higher but have been drifting lower as the session goes on. The restaurant chain did beat on several key metrics and named a longtime executive, Sky Anderson, to take over its U.S. business. This after posting the slowest U.S. comp sales growth since the start of 2025. Nic set John joins us right now, managing director and equity research analyst covering the restaurant sector over at Mizuho. Uh, what was it like 1.3% comp sales overall, point 8% here in the U.S.? Let's talk about the U.S. business. That's a considerable slowdown from where they were the previous 3 or 4 quarters. That's right. And more importantly, you talked about July. That was slightly, uh, negative. And so they're clearly a traffic sure donor, uh, within industry. And it comes down to having a route to value problem. Uh, so, you know, pre-COVID, they were clearly the value leader. Uh, and I think they've lost their way a little bit. They're trying to figure out how to get back to being the value leader. Um, and it's a tough road. It's a tough road. But here's what Chris Fancy said on the conference call. He said that they were hurt by inconsistent execution across its restaurants, saying we don't have a strategy problem. We simply did not execute. Do you buy that? Well, they did they didn't execute. And the franchisees, about about a third of their franchisees didn't buy into the under $3 menu, meaning they just didn't want to lower prices. What is McDonald's see those days? Because I mean, over. I think in the past, a lot of people looked at McDonald's as a value proposition. And I know there's been a lot of hate made online over the past two years about the cost of a meal at McDonald's, certainly relative to, as you're alluding to, some of its competitors. Are they trying to be a value play, or are they comfortable going up in terms of the income spectrum, if you will? I think they're trying to have their cake and eat it too. Mhm. Uh, so they're raising prices another 3 to 5% this year. Uh, and that's because they want to add that they have to the franchisees. They can't control franchisee pricing legally. The franchisees can take as much pricing as they want. And what they're dealing with is beef inflation. They're dealing with labor inflation. So they're trying to protect their margins as much as they can. Uh, but at the end of the day, that's a lot more pricing than fast casual or casual dining is taking, which is why casual dining is winning at the moment. Um, and at the same time, they're introducing, uh, value offers, uh, value offer points, uh, and they're trying to get the franchisees to be on board. But like I said, a third of the franchisees did not participate in the under $3 menu rollout in April, which was one of the execution issues that they pointed to. So what what does, uh, Chris Lipinski and his team sort of articulate in terms of how they can maybe get comp sales, uh, back up to something that's a little bit more commensurate with what we had seen for the previous year, a year and a half or so. I think they're trying to focus on value. I think they're, you know, I think the word they used was emergency. Uh, and so I do think we're going to see a lot more digital offers. I think we're going to see a lot more advertising and social media focus on on value. But that came up on the call, that idea that that he seemed to think the CEO seemed to think that maybe they, uh, did quite sort of, uh, take advantage of advertising in the way I wasn't quite clear what he meant. It didn't seem like it was more advertising. It was like he just wanted more effective advertising. Well, I think there's two parts of I think one of it was the he mentioned awareness, uh, of the under three menu. And I think they underperformed expectations regarding the FIFA sponsorship. Uh, and so on both of those accounts, I think that there was poor execution. Uh, I am optimistic that, you know, as we go into Q4, uh, we'll see more effective advertising, uh, particularly under this new management team. Uh, but at the end of the day, I think this isn't necessarily a marketing issue. I think it's, uh, it's a value perception issue. All right, Nick, great to have you here. Great to have you on set. Thanks for having me. Nick Yam, one of the best in the business, managing director and equity research analyst over at Mizuho. A closer look at shares of the McDonald's still in the growing up. About by about 3/10 of a percent here on the session. Now as we move closer to the closing bell, we're going to take a look at another company, Scotts Miracle-Gro, turning over a new leaf. The company's new CEO Nate Baxter, in town for an investor day. He joins us next right here on the close right here on Bloomberg. 3:30 p.m. Here in New York. This is the countdown to the close of Romaine Bostick as the countdown to those closing bell. If you want to take a look at gardening product maker Scotts Miracle-Gro unveiling new growth targets in its Investor Day today. Fresh off a new CEO appointment, the company says the adjusted EPs and sales targets are part of a, quote, growth algorithm with legs into 2029. And to put a finer point on that, the company putting out those midrange financial targets for fiscal 2027 through fiscal 2029, average annual adjusted EPs growth of 5 to 8%. Fresh off that Investor Day right here in studio two is the CEO and president of Scotts Miracle-Gro, Nate Baxter. Great to see you, Nate. Thanks for having me. I know you're getting settled into the job. You had to come talk to the Wall Street Hawks. How did they treat you today? Everybody was great. Yeah. You know, the reality is I've been having conversations for the last 18 months with our investors. So while the title has changed, the underlying strategy is still consistent with what I've been talking about for the better part of two years. Well, let's talk about the underlying strategy. When I see EPs growth of 5 to 8%. That doesn't seem aggressive, but it's not necessarily low either. Given all of the complexities going on in the world today, what gives you the confidence that you can make that? Well, we do recognize it's sort of conservative. It's sort of in the sweet spot of a value investor. If I look at the last couple of years, we've had a lot of volatility in the markets, a lot of events between tariffs and the war in Iran that we just couldn't predict. So our point of view is we're going to be fairly conservative, but we are going to turn into a growth company. We have we believe that the underlying initiatives that we outlined today are going to get us to where we need to be. But we also wanted to be honest with investors about growth. I told the team, I think we can outperform that. But our focus right now, especially from a capital allocation standpoint, is getting that leveraged down a little bit. So with regards to the growth strategy and forgive me, I don't mean to be flip about it, but when I think about the products you sell, obviously iconic brand, the branded products, but that doesn't seem like a growth story unless I'm missing something. Well, I think you have to look at it a couple ways. So we do believe there's a lot of organic growth possible. Our average household penetration is only about 10%. So if you look at the 85 million households out there only being penetrated by 10%, we have a lot of organic opportunity. Now, the question is, how do we convince consumers to engage with us in our category? So I think that's one of the fundamentals. The other is it. We know channels, consumers are shopping channels that they didn't before. You know, you come out of the pandemic. I think we had something like less than 5% of our total point of sale. That was through e-commerce. Now we're up to 13%, 300 ships alone this year. So what we're realizing is we need to go to where the consumer is, especially the younger consumer, and they're in totally different channels. We'll talk to me a little bit about that, because what is sort of I mean, you talked about this at the Investor Day. You talked about this in your earnings last last week, I believe, as well about digital advertising and your approach to it. Um, what does this mean? You're just making like, you know, funny things on TikTok or is it a little more sophisticated at that? No, I mean, we certainly don't want to we don't want to cheapen the brands. It's it's more sophisticated than that. What we're recognizing is we need to meet the consumer where we are. You know, we used to be a traditional media company. You would buy those upfronts, you would have a fixed date. The cost was sunk, you would run it. The weather might not be great. Not necessarily the right way to do your media strategy. So we've now pivoted where 80% of our media is digital. And it does two things that are really important. One is we get to tailor it for individual consumers. And the second thing is we get to be really agile with it. We can decide on a Monday if the weather is not going to be good in Chicago this weekend, we can pull back or we can redirect it. So it allows us to be much more effective. And we've seen a commensurate increase in the media ROI as a result of that. Is your marketing primarily created in-house? Are you relying on on third party? It's a hybrid. We have a for the social stuff. We'd like to do it in-house because you need to be able to respond to what's happening out in the world. But we have a whole bunch of partner agencies. We don't do the traditional AOR, you know, model. We actually pick a lot of partners, and we let our people sort of direct us. And it's been hit or miss. You know, we've got great agency partners. We have some that are are good for a period of time and then we want to move on. But one thing it's a little bit like I it's changing so quickly. We've got to be flexible with who we partner with on these initiatives. Talk to me about your input cost. I mean, we've seen commodity prices up, including for urea. Um, obviously, um, it does not seem like there's going to be an end in sight right now for those to come down with regards to the situation in the Middle East, as well as some of the other weather related factors, how have you factor that in to that 5 to 8%? So yeah, certainly certainly been a challenge. I mean, I think we talked about in our Q3 earning Q3 earnings, we had a little bit of a headwind this year. We absorbed most of it through cost out, but about 15 million of it did fall on the bottom line on, uh, in Q3. For next year, we're doing a few things. One is we've got a great team that does pretty, pretty sharp hedging. And so we do hedge urea, uh, diesel when it's available. Uh, but more importantly, we work on how to minimize those inputs. And we're also going to have to take some pricing this year. And that's a delicate balance. We've got to look at volume trade offs with that. But we have great relationships with our retail partners. And given we're in the mid-single digit range of pricing, we think we can figure out a way to navigate that. What's the relationship like? Um, with, uh, the retailers, uh, and where you put product first is what maybe you're trying to sell directly, uh, through your own channels. Well, let me be clear. We don't really, uh, endeavor to sell a lot directly through our own channels. It's a pretty small. It's a rounding error for us. Um, and it's not something we're focused on. Our launch program is the biggest, but our retail partners are pivoting very quickly to e-com. So if you look at the big three, which is what we've traditionally talked about, footsteps in those brick and mortar stores flat to down actually last quarter they were slightly positive, which was a great sign to see. But they are pivoting quickly. So we are now in the mode of developing products for all of our economy, consumers and retail partners. And that's a big part of what we talked about today, which was innovation. Uh, I do just have to ask you, obviously, when I think of the products that you sell at Scotts Miracle-Gro, I think, you know, you're a homeowner, you're going out into your backyard or into your front yard and applying and applying the products here. Uh, we know that the homeownership rate has gone down. We know the turnover of homes has gone down as well. I assume that has to have a direct impact on your business. How do you compensate for the slowness that we're seeing in that space? Well, the good news it's all part of how we go capture that next generation. So that next generation, they are not yet homeowners. They are apartment dwellers. They have condos. So we've pivoted hard into indoor gardening, something we've always done, but we haven't talked about it. And we have a whole new suite of products that came out. The other big win that we talked about at Investor Day today is in the grocery aisle. We typically have not been present in the grocery aisle with our controls products. Um, and so we now are winning business at some of our bigger partners in the grocery aisle. That's a big deal for us. And then if you look at our partnerships, we've talked about a partnership with a small company called Murphy's they're doing on skin natural mosquito, uh, um, prevention and uh, repellent. We're finding new channels with them. So I think, you know, this growth story, you just to go back to what you asked me in a minute earlier, it's really about getting the right products in our consumers hands. So we've got our traditional consumer that likes the traditional product that you just mentioned. But we have the next generation consumer. They want natural, they want organic, they want things that are safe for pets and kids. That includes apartment dwellers. That includes people that aren't yet homeowners. And when I look at the home ownership, I don't look at it as a as a headwind. Today, I look at it as it's going to be a tailwind when that dam breaks, when we start to see more turnover in the home ownership. So we don't we don't look at it as a negative. We just know that there'll be something down the road coming where we can engage that next gen consumer as they become homeowners. All right Nate, great to have you here. Thank you very much. Nate. Uh, Nate Baxter there he is, the CEO and president of Scotts Miracle-Gro. Uh, we do have some breaking news. This involving SpaceX and Nvidia. SpaceX saying that it's partnering with Nvidia after all. Who is it? Uh, SpaceX basically saying that it will, uh, is partnering with Nvidia to design a satellite compute payload and says that the Star Line satellites will include Nvidia's Rubin GPUs. And just an update. Of course, SpaceX does report after the bell tonight, so maybe we'll get some more details on that. You see the move higher there in space. It's now up about 9% heading into that print When we come back, we're going to check in on some other stocks that have been soaring. This on the back of a report that the Trump administration is aiming to protect U.S. data center infrastructure. It's putting a big bid under a lot of big stocks, including Corning, Momentum and Coherent. That's our stock of the hour. And it's coming up next right here on the close right here on Bloomberg. Time now for our stock of the hour. And we're looking at a whole basket of optical equipment makers that includes Marvell Corning, Cisco and Sienna all rallying today after Reuters reported the Trump administration is drafting a ban on data center components imported from China. Bloomberg TV markets correspondent Melinda joins us right now to talk a little bit more about this. And obviously we're talking about some very specific components. First of all, let's start with this Reuters report. What exactly do we know about this ban or potential ban. Potential ban. Right. So we do know that China has essentially dominated this space. We've been seeing all this attention on AI chips, but you also still need to talk about the optical component that goes into it. And that's how these chips are actually able to communicate with one another. Now, if China's kind of been dominating this space, the U.S. is, of course, really concerned about those national security concerns that we've been talking about in many areas. But separate to that, also the AI race and us essentially trying to get ahead of China. Now, Wall Street is still a little bit skeptical as to whether or not this will actually pan out, being that China has been a leader in this space, and it would take a lot to actually see this come to fruition. But as a result, we are seeing a lot of those U.S. based companies rallying on the idea that they could potentially take market share from some of these Chinese based companies on market share, assuming they have the capacity and I assume prices go up. And last time I checked, prices to build out data centers are already pretty high. We were listening the companies and one confused me. So you got Corning coherent? Uh, a couple of others. I'm forgetting. Marvell. I'm confused. Do they make optical equipment? Well, when I had to dig into a little bit. So this one actually does not actually make optical components, but where it could potentially benefit is due to the demand for those optical components. So essentially it does supply many of the networking chips that power AI data centers. And that's the way that they essentially are weaved into this rally here. So stronger demand for optical infrastructure more broadly will essentially also help support Marvell broader networking efforts and capacity there. I just want to say, um, the Chinese Embassy in the U.S. responded to this report and urged Washington to, quote, listen to the objective and rational voices of the business communities in both countries. Uh, and it goes on, blah, blah, blah. But this does get the idea. And I don't mean to be glib about it, but this idea that right now we're already facing a lot of supply constraints when it comes to the, uh, the components and other things needed to build out these data centers. And now we're adding potentially another cost there. I know investors why the knee jerk reaction would be a bit. The stock's up. But what confidence that they have that this stuff will get bought at some point. There's got to be a price ceiling that the potential customers are just saying you know this just isn't worth it. Well that's the question because there's a bit of a push and pull. We've been talking so much about affordability and whether or not these companies should be taking on the amount of debt, the amount of cash that's needed to actually see the eye build out into fruition. But, I mean, we have also seen Nvidia making a bet on this. They did actually invest about $2 billion in lumen some and another name in the space. So maybe if Nvidia is backing it co-signing it, it also gives investors on Wall Street some sort of hope that this is something that is worth betting on. If you think about the idea of how you can really squeeze out all that, you can get out of this, I trade Nvidia co-signing a lot of things on the back. But just before you came on the air, we were talking about apparently now, you know, SpaceX said, yeah, I have a partnership and I just I mean, not to, to, to get too off topic here, but we are going to hear from space later tonight, uh, which depending on who you believe is either a rocket company or an AI company, I think, uh, Elon Musk would say we're basically an AI company. And at some point we'll have our data centers out in orbit. Uh, is there a sense that investors are stealing, willing to embrace the AI trade wholesale, or are we at this stage now where it really is just everyone's just parsing it and picking and choosing? Well, we are seeing investors being really choosy, specifically when they're thinking about what areas of tech that they want to invest in. It feels like every single day we're getting a bit of whiplash when we're seeing a rotation out of tech, and then also just a bit into some of these more, uh, individual sectors within the tech space. But I mean, space, of course, is going to be one of those earnings reports that everyone parses very, very carefully given the fact that this was the biggest IPO of the year. This is their first ever quarterly earnings report. But also the stock has really been on a rollercoaster ever since at IPO. So there's a lot of things that investors will be digging into when we take a look at this report that comes out later this afternoon and we'll be taking into that here. Right here on the close right here on Bloomberg. Space, in our view, sort of has almost a bit of an identity crisis. Um, if you think about it, they have so many different parts of the business. And um, for us, the crown jewel is really the launch piece of the business. Without the bottleneck rocket capability, it's difficult to think of the connectivity business being, um, available. The, uh, I orbital data centers wouldn't even be a topic of discussions without it. And then when we think about valuing a business such as this, you have the piece that we call the no knowns and known unknowns, a lot of focus on the various components of the space business and how it all got together. Julie Zhu over at MoffettNathanson yesterday, making that point as we await the earnings from what was the largest IPO of the year and more importantly, less about the earnings and more about how Elon Musk is going to communicate his vision for this company, particularly with the stock trading below its 135 IPO price. As for the rest of the market, we are setting up for record highs for the Dow Jones Industrial Average and more importantly, for the S&P 577 48 and change up about 2% right now. This will be the first record high for the S&P since June 2nd. A decent bit coming into space heading into those earnings. But a big part of the reason why you're seeing some of the optimism around the broader market is sort of three fold. One, of course, it is some of the earnings that we've gotten that have provided a big boost to sentiment, but also this downdraft that we continue to see in oil prices, crude below 76 bucks a barrel. And that is putting downward pressure on yields as well. Right now, your 30 year yield camped out at just under 5.2%. Let's bring in John Belton, portfolio manager and managing director for growth portfolio at the Belly Funds. And John, I do want to talk a little bit about some of the earnings that we've gotten so far and to kind of put them into context as to where we stand with regards to sentiment around the eye trade, uh, and this big tech trade, it seems, at least as of late, the more the bigger beneficiaries in this market have been the hyperscalers, or at least some of the hyperscalers who have kind of shown some degree of proof of life that, yeah, there is indeed a return, uh, up ahead for all of this CapEx investment. Yeah. And I think that's what you've been seeing kind of propelling the market the last couple of days to to your earlier comments. Yes. There's been some potentially positive news yet again in the Middle East, subject to change. Um, but what's really changed over the last couple of days for the tech trader in the tech tape has been hyperscale earnings from Microsoft, from Amazon, and I even think from meta as well. I've been really positive on a number of fronts. And you know, those bellwethers, I think all the doubt that existed about kind of the AI CapEx cycle, at least for now, I think the markets become more comfortable with things. So how are you kind of evaluating things right now, John? So when you look at sort of what the potential ROI might be on that CapEx spend for something that maybe you hold in your funds, are we looking at it too narrow, or is it just simply okay when it shows up in the bottom line on EPs in some way, or in margin expansion? Or is there some nuance that maybe, uh, maybe folks should be looking to? I mean, I think every company here is different, right? I think you've got companies like Meta and Alphabet where I infrastructure is clearly helping accelerate their core advertising businesses. So for those companies, this is a story of revenue acceleration. And uh, under that margin expansion and it's really been earnings acceleration that this AI infrastructure has been driving. So you can look on a backward looking basis and just calculate what's the ROIC been for these businesses over the last couple of years. And it's very, very positive news. Um, I think looking forward is really what the market is starting to question. Given the size of the CapEx expert aspirations over the next couple of years, are they going to be generating similar returns moving forward as they've generated over the last couple of years? I'm curious how you look at a company like space. Uh, you know, there's been obviously a lot of hay made, uh, about its, uh, multiple 400 plus times, uh, forward, uh, earnings, 26 times sales. Uh, you know, I understand there is sort of this, uh, uh, kind of, uh, Elon Musk lever the idea that a lot of people believe he'll pull a rabbit out of his hat one way or the other and make good on some of these promises. But when they report tonight, I mean, looking at this as a space launch company, as an AI company, as something in between. What? Yeah, it's a unique company, so I don't think it has to fit any sort of, you know, predefined definition, um, that, you know, you think of, uh, for a different company. It's, it's a, it's a totally unique company, I think. But I think about space. I think there's sort of two relatively mature businesses as things stand today, or two businesses where you at least know what they are, the, the launch business and the connectivity business, or Starlink. And I think you can kind of pencil out what are the earnings look like for those businesses over the next several years under a set of assumptions and sort of get to some, you know, idea of what those businesses can generate and earnings over time. The I segment, I think, to me is still the earliest and most nascent. We still don't know what what sort of shape that's going to take. There's a couple of different pieces under the hood. So going to be interesting to hear tonight how they sort of frame all the moving pieces for that business. Is there a sense here that when we talk about what Elon Musk might be trying to do with this company. And let's just set aside the rocket business, because that obviously has a singularity to it that is unmatched. But at least on the AI front, I mean, he's kind of late to the party. I mean, everybody is trying to build data centers. I understand he's looking more at the orbital side of this here, but does it matter that he might be a little bit late to the game? Well, that, I think is the key question because I think, you know, within AI, again, there's a lot of moving pieces. There's a lot of different pieces, I should say. But grok and I think Brock's, uh, ability to penetrate this large enterprise AI market is key for the stock. And that does seem to be an area where they are, to use your words, a little late to the party clearly behind anthropic, OpenAI and Google as well. Um, so he's going to have to talk about how he plans on catching up there. But they have demonstrated some core competency in other areas of AI. So like these Colossus data centers, they've built the speed and complexity, uh, at which they've, built those facilities and brought on a ton of compute. I think they're now approaching two gigawatts of compute there. So they have demonstrated some real capabilities and competency in that area of their AI business on the infrastructure side. So are you comfortable, John, kind of where we stand right now in this AI space. I mean, just before you came on Nvidia, we learned through space that they're partnering with Nvidia. Nvidia is partnering with everybody. There's been a lot of talk about the circularity of these various investments and deals. And uh, you know I mean, are we just kind of passing the buck around or is this sort of a genuine sort of ecosystem, a genuine flywheel that is going to sort of benefit everyone involved or most people involved? I think it's best to look at this from a high level and just think very simplistically. What is the utility of AI technology? What is I good for? We know today AI is good in digital media or digital advertising. We know it's good in digital commerce. Uh, we I think the seeing the use case is broadened out from there is going to be key for the eye trade going forward. John Belton, portfolio manager over at the Gabelli Funds, as we marched to the closing bell, was a record high for the S&P 500 and SpaceX's earnings after the bell. The closing bell. Bloomberg's comprehensive cross-platform coverage of the U.S. market close starts right now. And right now, we are two minutes away from the end of the trading day. Romaine Bostick taking you through to that closing bell with a global simulcast. We're joined now by Carol Massar. And, Senator, welcome to our audiences across all of our Bloomberg platforms. Television, radio. Our partnership with YouTube, a broader market Carol Massar, at least with the S&P 500 set to log its first record high since June 2nd. But we're keeping an eye on earnings from AMD and from SpaceX. Yep, those are the two big ones right now. Still up about 9.6% ahead of that earnings release, our quarterly update, if you will. It's definitely a risk on trade, but there's a lot at stake. Investors want some specifics when it comes to SpaceX's business. We'll see whether or not we get there and we'll see what kind of mood Elon is in. As Max Chaffin reminded us, sometimes it's upbeat, sometimes it's not. SpaceX is not the only company reporting after the Bell, but it's certainly, I think, fair to say, the most highly anticipated one we'll hear from AMD, we'll hear from, uh, Paramount's Skydance booking Holdings will give us some sort of potentially potential view on how travel has been and how we expect travel will play out for the remainder of the year. Uh, and Viasat, interestingly enough, a competitor to, uh, SpaceX's Starlink business is reporting to. Yeah, I do want to point out, though, I was taking a look at the implied market moves and all the earnings, all the companies that are reporting earnings and an implied move of about 8%, which is high space right now. Implied market move after the bell. Ah, tomorrow in the cash session 15% here. And of course, we talk about a company that's not only going to be driven a stock that's going to be driven by the earnings, but the idea that with about 640 million shares now available for trading, keep in mind the two days you're going to add as many as 911 million more shares to that. And that seems to be where some of the concern short interest now, well over 200 million shares record high for the Dow Jones Industrial Average here on this Tuesday afternoon, up more than 900 points, a 1.7%, a record high for the S&P 500, up 1.8%. The Nasdaq Composite up about 2.6%, the Nasdaq 100 up 3.3, and the Russell 2000 Carol Massar closing out the day 1.9%. All right. As we wait for space, booking is out and let's get to the outlook. The company says it says third quarter revenue at constant FX up 5% to 7%. Third quarter gross bookings up 4% to 6%. And now we have Paramount out as well. Yeah a Paramount guidance on now out with their earnings as well for the most recent quarter. The company did say that year over year revenue did rise about 16% to 6.91 billion. That looks like a beat. It looks like on the bottom line, also a beat as well. Here's your forecast for the full year, the company says expect total revenue of $30 billion. It says expect EBITDA of $3.8 billion, which actually looks a little bit light. And for the current quarter, the company says revenue 6.95 to $7.15 billion. That's the range on Paramount's guidance. Looking at some highlights here in the investor letter, the company said that second quarter was the best quarter for retention in Paramount Plus's history. It was powered by debt and ranch UFC and, of course, the FIFA World Cup. Non-exclusive. Across six countries in Latin America, they gained about 2 million new Paramount Plus subscribers in the quarter. Now 81.6 million worldwide, the company says it's raising its full year 2026 outlook, as you mentioned, uh, to, uh, 3.8 to 3.9 billion in adjusted EBITDA. All right guys, Amgen. Let's go to that second quarter adjusted EPs 629 a share. That is a beat. 562 is what the street was expecting. Let's go to the outlook. Amgen seeing fiscal year revenue of 38.2 billion to 39.4 billion. That is above its earlier estimate of 37.1 to 38.5, and sees fiscal year adjusted EPs of $22.30 to $23.50 a share. And that is to above its estimates. And you're seeing shares of Amgen, which are already up about 19% year to date now with a gain of about 1.5%. Space. That first number coming the second quarter revenue, 7.8 billion and remain. That is above the estimate of 6.81 billion. Absolutely. Here we're going to wait for some of these other numbers to trickle out. This is going to be a complicated report. Remember we're basically talking about three primary businesses. Their space business which is effectively the launch the connectivity business, which of course is Starlink and the AI business. And a lot of people not only want to see what it did on the quarter, but more importantly here what type of long term forecast the company will give with regard to that. Also, Tim, uh, the obviously, the idea of where we might go with regards to a more of a mash up, a lot of speculation about what could happen with Tesla, whether that gets absorbed into space, and the idea here as to what sort of deals and partnerships SpaceX can actually announce to keep investors placated in the short term. We got a little taste of that just a few moments ago, Tim, when they announced that they are partnering with Nvidia to use Nvidia's Reuben chips here, uh, on these orbital data centers that is trying to build out. Yeah, that's the star mind AI one satellite compute payload. Uh, the company partnering with Nvidia to design the satellite compute payload. I want to remind people, too, that that connectivity business is the vast majority of its main business in terms of revenue. 20 in 2025, for the year, 61% of the business was connectivity. That includes the enterprise consumer versions of Starlink. SpaceX accounts for about 22% of the business, and I, as of 2025, was about 17% of the company's revenue. Another headline coming SpaceX second quarter eye segment operating loss of 1.26 billion versus an estimate that the street was looking for a higher number, $2.39 billion. Right now, we're seeing SpaceX shares, which rallied big time today, just up about 8/10 of a percent remain. Absolutely. And these numbers continue to trickle out here. The company says that EBITDA in the most recent quarter, $3.5 billion. That's well above what the street was looking for for $2 billion. Again, that's for the company as a whole. It also says that it reached 12 million Starlink subscribers at the end of the second quarter. And here's your CapEx number, which, of course, a lot of people are paying attention to 18.37 billion, basically $18 billion in CapEx. Now, that's backwards looking. That is for the second quarter. It'll be interesting to see what the next couple of quarters look like here. The company did say that it did end the second quarter with $100 billion in cash and cash equivalents. Yeah, the answer was actually for higher than that, the estimate for $18.6 billion. Some other numbers to highlight here. SpaceX reached 12 million Starlink subscribers at the end of the second quarter. As you mentioned, the I segment operating loss $1.26 billion. The estimate was for a loss of $2.39 billion. Shares bouncing around in the after hours, uh, now just down about 1.3%. But shares surged in today's trading session, still off quite a bit from that high earlier this year. The estimate for second quarter Starlink subscribers was 12.19. So that was uh, that was within expectations. The company also expecting that cursor deal to close this quarter. That is the third quarter of the year. Once again, these headlines are continuing to trickle out. SpaceX shares down just by about, uh, 2.6%. Our team putting its first story out on the Bloomberg uh, SpaceX's revenue exceeded Wall Street's expectations in the company's first quarterly financial report following its blockbuster IPO back in June, the satellite space in AI conglomerate reported revenue of $7.8 billion, greater than the 6.81 billion that analysts polled by Bloomberg expected on average, unveiled an operating loss of 1.26 billion from its AI business, better than the consensus expectation for a loss of 2.39 billion. But we should point out it was the largest IPO we've seen, quite a roller coaster after a couple of days, initially out of the gate when it IPO out of moving higher. We've seen the stock pullback and short interest has been very high. And that is something to keep in mind as this company goes through the release and the analysts call to see what kind of short covering if the news is really upbeat. Well, that's what I'm curious about too, is how much of the share price reaction today is even going to be actually tied to the earnings themselves? You know, I think it's over 200 million shares were shorted just coming into today. My guess is that number went higher as we got closer to this earnings report. You have a 600 plus million shares now out. They are floating around and you have a lockup expiry in two days. That's going to potentially add 911 million more shares. Not to mention you get almost double that when you get towards the end of the year. So that's going to put potentially put some downward pressure on this stock. But of course a lot will depend on the conference call which kicks off in about 30 minutes time. And we're going to hear from Elon Musk. And he's going to have to say look you know I got a plan. Either you believe me or you don't. That's the Elon premium that Max was writing about for the Businessweek daily newsletter earlier today. Uh, I also want to point out that we're seeing a relatively muted reaction as of now just to these numbers. Like you said, to remain a lot of it will likely come on the call. And going into as of this morning, the options market was pricing a move of upwards of 14% to the upside or the downside. Getting a little more information from the company about the most recent quarter government contracts. Interestingly enough, uh, $6 billion in multi-year U.S. government contracts. That's for Star Shield, our own Dana Hall reporting SpaceX shares up right now by about 1%. And let's not forget Lauren Gresh, who wrote a preview and covers this company and the space industry, said, you know, what's really important is getting also updates on Starship specifically. Are there any technical setbacks? Because this is certainly key in terms of getting satellites out into the suborbital or if they've only been suborbital, but getting them further out. And that's part of the idea of getting either data centers in space. But this is so important certainly to the company story going forward. All right. Right now, folks, uh, shares of SpaceX just up about 1% in the aftermarket. That is a wrap are cross-platform radio, TV, YouTube, Bloomberg Originals, covering, uh, those earnings out from SpaceX and more, um, remain continuing there. Of course, on the close on Bloomberg TV. And Tim and I back here on Bloomberg Businessweek daily on radio and more. We will see you again, same time, same place tomorrow. Our coverage of SpaceX's earnings, its first earnings report as a public company continues on the revenue side for the quarter. For the full company, $7.8 billion in revenue. Here is how it actually breaks down on the connectivity business. The segment revenue. They're coming in at about $4.29 billion, well above what the street was looking for on the space segment. It does look like net sales came in at 962 million, above what the street was looking for, on average of 873.7 million on the AI segment. It's third large business as part of this company, $2.56 billion. The street was looking for $2.0 billion. Of course, this is still a money losing company, with the space segment reporting an adjusted EBITDA loss of for the quarter. But of course, we have to get to that conference call to learn a little bit more about what the future holds for Starship and, more importantly, for how Elon Musk puts all these pieces together into one coherent company. Ross Garber joins us right now, co-founder, president and CEO of Gerber College, Kawasaki Wealth and Investment Management. And Roth, I don't even know how much, uh, usefulness it is to even go through some of the numbers on a quarterly basis backwards looking. I know a lot of investors are looking to figure out kind of whether Starship sort of fulfills that promise and whether what's going to be attached to these rockets, presumably, uh, whatever sort of servers and other sort of, uh, orbital data center type of equipment are going to be along for the ride sometime soon. Well, I think it's going to be sooner than what people think. Judging from the last Starship flight that we saw, which I would consider pretty successful. And and when you look at the size of this thing and the fact that they're now getting it in and out of space without exploding and landing pretty well into the water, um, we're pretty close to having a reusable massive rocket ship, other than many of the technology challenges that they still face to get this to work, let's say, over and over again in scale. But just the fact that they've gotten this far is very encouraging, and I don't think people should doubt whether or not this is actually going to happen. It's just went. Yeah. And I think that seems to be the consensus. And we certainly seen some degree of a proof of life with regard to that. The question though becomes, uh, in terms of monetizing this further beyond just being sort of a taxi service, if you will, uh, into space. Uh, how much of this gets monetized by SpaceX itself with regards to what it's able to put there? And that flows back into the company for its own, uh, for its own coffers? Yeah. And I thought it was interesting because I thought the most important announcement from SpaceX was their deal with Nvidia to build these, you know, their calling star mind, uh, data centers in space. So really, they're putting the hardware pieces together to do something that's never been done before, which works because they have Starship and they have Starlink. So by putting the data centers in space, it really adds a whole new element of what can be done through Starlink. As far as not only just connectivity and internet access, but also, uh, sending and receiving data. So it's a very exciting, you know, idea or premise to be able to do this. And only SpaceX can do it. And I think that's what makes this investment compelling isn't really what it's doing today. But what will this look like in five years? And it could be pretty damn impressive. Were you surprised that they would make that announcement on, uh, with regard to Nvidia and using those Rubin GPUs? I wasn't surprised because they have a very close relationship with Nvidia. What I'm surprised about is how rapidly they're moving forward with the development of these satellite based data centers, which, you know, obviously has never been done and is technical. You know, the challenge from a technology perspective is massive. So so, you know, they're moving forward full speed ahead. And I think it's a, you know, a really exciting prospect. And and it's a high risk investment because obviously all these things can fail. But on the other side, it's a high reward investment if they succeed. And so I think investors need to weigh both of those, uh, cases. And when looking at the stock today, but considering is trading below the IPO price. Individual investors who want to buy the stock certainly are getting at it at a discount compared to everybody else. Um, let's talk about the eye of business obviously created after the merge. EXi uh, with space. Um, we should point out they're also saying in the release that they do plan to close the cursor merger, uh, sometime this quarter in the third quarter. Uh, this has been a bit of a drag, and it seems like there were a lot of investors that would have liked to see SpaceX, uh, go public with just, uh, uh, the launch business and the connectivity business and not necessarily EXi. Are you comfortable with maybe what his vision is for how she she fits into all of this? Well, I, I've been sort of excited as a painful thing because I sort of think Tesla should have owned Z and I. I know Elon didn't want Tesla to own it because he didn't control Tesla so well. He does, but shareholder wise. And so X is a part of space X. But the way I look at it is Elon is really good at building factories. And I and X I is going to be successful whether they use the compute or sell the compute. And so the fact that um space x or x I is investing, you know, billions of dollars into building these data centers, it's going to pay off one way or another, because the demand for compute is so much larger than the supply of compute. And Elon super good at this. So, you know, I think investors are so short term minded to be worried about CapEx during this incredible technology boom period. We would need the CapEx to be spent if we're going to be competitive. And that's exactly what SpaceX is doing. And I think if you take Z out of the business, yeah, it's more profitable. It's easier to sell on the short term, but on the long term, you're missing one of the great opportunities to be able to provide compute from space, which is actually, you know, potentially massive as far as an opportunity. So, you know, I think it should be part of space. And investors just have to be patient and let this stuff play out. Uh, Starlink coming in, uh, 12 million subscribers at the end of the second quarter. Its only profitable business. Uh, the company says it has approved for Starlink of $66, uh, for the most recent quarter. Uh, I mean, this is kind of the the one part of the business that doesn't really have to prove itself. Uh, I am curious as to whether there is a growth story for Starlink or has it already sort of matured? Oh, no. I mean, Starlink is just beginning in so many ways. You know, Starlink is a critical system in, in pretty much everybody in America should have it as a backup for their internet access as a as a fire survivor of the Palisades fire. Starlink saved us. You know, like, without Starlink, I can't even tell you what would have happened during that fire. So it's literally a life or death critical system and you should have it as your backup internet. So there's a massive market, even in America, that doesn't have Starlink. And then when you talk about globally, it's it's huge. But there's another element to Starlink that people have to understand, which is the military element to Starlink, which is one of the reasons Ukraine is having so much success with their drone attacks all throughout the country of Russia, is because they now have Starlink satellite antennas on the drones. And same with the US drones. And by doing that, it gives us a guidance system that's global that can be managed anywhere in the world. And it creates a weapon that is almost unstoppable. And we're seeing this right now in real time. And this is due to Starlink. So the military side of Starlink is only also just begun because we haven't even built that many drones yet. Like, if we're going to be prepared for the future of combat and war into the 21st century for real, Starlink is going to be just a critical element to our military and our success in this new autonomous, you know, military world. So Starlink is just at the beginning, whether it's, you know, internet service on a boat. Or a backup service at your house, or putting it on a drone to go blow up the wild berries factory in Russia. This stuff works incredibly well, and I just there's no competitor for us. Always appreciate it. Ross Gerber, Co-Founder, president CEO of Gerber Kawasaki Wealth and Investment Management. Space tech share is now taking a lake lower, down about 7% in the after hours trade. Meanwhile, Advanced Micro Devices, the chip maker, just reporting earnings. Its share is now down about 9% in the after hours trade, providing third quarter revenue guidance for the current quarter of 12.7 to $13.3 billion. Now, the low end of that range is above the average of street estimates. Let's drop back, though. Here are the second quarter numbers for the second quarter, the company did report a beat on revenue $11.5 billion. The street was looking for 11.3 adjusted $1.66. The street on average was looking for a $1.62. Operating margin did expand 27% versus a range at well 26.9 was the estimate. So pretty much on the nose, uh, the CapEx number coming in at about $808 million. The street was looking for $299 million there. Uh, back to the third quarter on that forecast. So they are saying that they do see adjusted gross margin for the current quarter of about 56%. The street was going for 56.2. I don't know if people out there are quibbling, uh, with, uh, 2/10 of a percentage point on that. But the company does say that its data center sales will accelerate here in the second half of 2026. We're going to keep covering both of these big names as they both move lower. And we await for the conference calls of both to start our next guest. Well he's got ETFs leverage ETF for both companies including tracking space since the IPO. Will Ryan, founder and CEO over at Granite Shares, joins us right now. He oversees SPL and SMK, the two times long and short space ETFs and. Well, um, let's start with SpaceX here. And with regards to what we heard today and whether that moves the needle at all in either direction to the long side and the short side in terms of opinion and where this stock might go. Yeah. It's interesting. I mean the stock had a very good day today obviously coming into the earnings and probably the best day that we've seen for a while, certainly from our business, I can tell you that the orders were almost exclusively skewed to the short side, meaning that people were buying S and K, which is our two time short. So that tells you that expectations were bearish. You know, going in at least from our perspective, that was to some degree backed up by the prediction markets, which actually uh, last time I saw had the earnings at a miss instead of a beat. But of course, it's just the first day. I think there's a bit of nerves still around. What's going to happen later in the week with the lock up expiring? And certainly a lot of shares available to be sold for the first time. So I think it was less about the earnings today and more about what's coming in the next few days. Well, I'm curious, how do you think the lock up is going to affect? I mean, we've been talking about this a lot on the show. I mean, 600 million shares right now out there trading, around 900 million more shares are being unlocked this Thursday. And there's been a lot of discussion that this isn't there's not a lot of optionality for some of these insiders. And given when they bought in and what they're sitting on, some of these folks have to sell. I think that's right. So I think sentiment, you know, you'd have to say is skewed negative here. Um, that being said, because we've known about this, you know, you have to ask yourself how much of this is already priced into the stock movements and therefore it might be a, uh, a surprise to the upside. You just never know. But I think you'd have to say, based on on all the evidence, that you have a lot of investors who bought into the company at valuations significantly lower than even today's, of course. And it would be an opportunity for them to sell what you'd have to think would put pressure on the price. Well, I'm curious, what is the price to even short this because I mean I mean s and k, I mean, the last time I checked correct my wrong. You're charging two. Uh, what is it, like 2.25% on this? And, uh, I mean, I've seen we had Bob Sloan on the program, uh, on the network earlier today talking about the cost. That's just straight, uh, hedging, uh, in the, uh, on the shares itself here. Is it going to become too expensive to even bet against the stock at this point? Um, I think there's always a price. You know, we've seen that for other stocks and certainly stocks that are way more volatile than space, even that. Now, typically the market finds a way to source supply, even if it is at a very high cost. You know, the cost for something like this, you know, isn't that bad at the moment because it's a huge mega cap stock. So there's quite a lot of supply available that does obviously change, um, with certain other names in the market. And it's very much supply and demand driven, of course. Um, I do want to ask you about AMD you also have a product there. They um, y y uh, and those share is also getting hit pretty hard here in the after hours trade. Uh, give me a sense here. Um, kind of like what people wake up to tomorrow with regards to sort of, you know, how they sort of trade in and out of this, whether it's through your ETFs or through, uh, the stocks themselves? Well, I think the first thing to point out is that there's been a lot of volatility this earnings season in particular. And of course we've just come off the back of, you know, a very brutal month which just July from momentum stocks particularly a lot of the semi stocks. Of course I think it was the worst July for the Nasdaq for 22 years. So in that environment, you know you've had earnings. The Google earnings for example, spring to mind where, you know, for all intents and purposes the numbers were amazing but with slightly higher CapEx than the market expected. The shares took a dive and subsequently, you know, recovered. And I think we've seen that playbook in past earnings. And I think what we might be going through with AMD right now is similar. I haven't had time to digest the earnings as of right now, but I suspect it's a little bit of an overreaction. Um, to perhaps a number that was what the market a price to perfection that maybe there was some detail off. But the one thing that we typically see in the business is we see a lot of activity, people trading in these, uh, levered ETFs in the pre and post market. So we get activity coming out of Asia overnight. And that's the great thing about a lot of ETFs which not everybody knows. You can trade in the pre and post markets. So before the official session start. And when we see moves such as this, whether it's AMD, whether it's space X, whether it's SK Hynix, yeah. Um, you typically see a lot of interest even before the official session opens. Of course, when the market opens in the morning. Well, I do have to ask you, though, about some of the critiques of some of these leverage ETFs. And, uh, you know, I mean, we saw the selloff that happened over in Asia, a bit of an unwind there. There's been criticisms of funds like yours that basically the way that you have to rebalance in a lot of ways, you are actually moving the very stocks that you track. Uh, and the SEC has also put out warnings. Goldman Sachs has said this could potentially create systemic issues should it continue apace. How do you respond to that? I think that leveraged ETFs, if we just talk about that specifically now, have been around for almost 20 years now. This is not a new phenomenon. Um, and of course, like anything the supply and demand driven, you know, we have a free economy where investors are free to decide whether they want to buy a leveraged ETF or a non leveraged ETF. And you know, there's clearly demand for trading vehicles. There's investors of all types. Investors that want to buy and hold and a conservative and want to, you know, execute strategies for the long run. And then there are investors who want to execute strategies for the short run. And to me, neither is right or wrong. It's very much about how you express yourself individually. And you know, the one thing that is obvious is that there's demand for trading. There's demand for trading tools. And that's what leveraged ETFs play that part. They're not for everybody. They're not for buy and hold investors but for trading vehicles. They play the role very well. Well always appreciate it. Will Ryan, founder CEO over at granite, shares as we continue to keep an eye on space with their conference call set to kick off in just about five minutes time, we're going to hear from Elon Musk his first earnings call since SpaceX went public, and analysts are certainly likely to press him on the AI business and the massive spending associated with us. Joining us right now to talk about the leader of this company is Steve Wesley, a former Tesla board member and the founder of the Wesley Group. Uh, Steve, thanks for joining us again. I am curious about sort of you know, what you think, uh, Elon is going to try to articulate on this conference call a money losing business, but obviously a ton of potential up ahead for what this business can be. Uh, there is a salesmanship job that has to go on not just today, but probably over the next few months and quarters. You think he's going to be able to do it? Well, he's a pretty darn good salesman with a pretty strong track record. But look, I think this is going to be high drama because the share price down 13% from the IPO but down 50% from its peak. So they've got their work cut out for them. I think what they're going to argue here is look, they're an incredible growth engine that uh, space on track to double from 18.7 billion. Uh, 2025 this year. Looks like they're going to hit 38 billion. And I think he's going to say we're probably going to double again next year. He's going to focus on being a market leader. Space assets dominate the launch 51% of all launches in the world are space craft Starlink very profitable, growing 80%. Um, you know, he he's got a good growth story, but I think investors are going to walk away with three questions. How quickly can SpaceX and Starlink continue to grow? Can space I really break in with the big boys anthropic, OpenAI and Google? I think they can, but that's going to be heavy lifting. And the third point that most people aren't talking about a lot, but this is a bit of a different IPO where shareholders can sell 20% of their holdings within 90 days tomorrow. And so one of the questions out here is going to be how many people are going to hit the exits early. A lot to unpack. It's going to be interesting. Yeah. And it's the 20% obviously this week I think you get 28 to 30% more uh, after, uh, the Q3. So, uh, this is going to be something that's going to dog the stock for a while. Uh, but give me a sense here. I mean, you sort of rattle off the businesses themselves and, uh, no one's touting Starlink. Uh, I think Starship, uh, despite some of the hiccups, most people, the consensus is that this will, uh, sort of, uh, come through to full fruition. I think some of the concern has been about Elon bolting on a lot of other things. So let's just take x, IA1 point $3 trillion valuation for a money losing company. Uh, what are we what is an investor betting on. If they I have to take in Z with it. Where does Z fit into this equation and into the total equation? Look, I is the fastest growing sector of the global economy. No one has ever seen anything like anthropic in OpenAI before, uh, Musk is saying we can play with those guys. And I think they're showing the initial steps to, uh, to do that. Um, but it's going to not be cheap. They're talking about losses are going from 50 million here to 30 billion a year. Some analysts are saying they might burn through as much as 300 billion, uh, before the end of the decade. So he's going to have to show rapid growth in the number of users. He's going to have to show they can sell into both the individual and the B2B market. Uh, this is not going to be easy, I dare say. I think it's a lot easier to beat General Motors and Ford in the electric car sector than it is to tackle anthropic, OpenAI and Google. So we'll see if you can do it. You hate to bet against Elon Musk. I have to ask you about Tesla itself, because there's a lot of speculation that at some point, Tesla might ended up getting folded into space. You know, this company from its startup days, uh, it's obviously struggled as of late a little bit. But then I think about. It's in Tesla car. Starlink I think, is part of the cyber cab. Uh, there's a share chip fab in Texas. Um, I mean, you add it all up. Those are just three things, Steve. I mean, come on, it's not far fetched to think that somehow, at some point, Musk was just wake up one day and say, hey, we're just going to do this, and I'll do it for 20, I'm sure, somewhere for 20. There you go. No, look, I mean, he always said in the last, um, uh, annual meeting that there are, quote, many collaborations with SpaceX, especially, uh, with Tesla, especially Terra fab. It look, the number of synergies here is huge. There's synergies on chips memory compute especially on energy. Now ESP Colossus uses microgrids powered by Tesla mega packs for load smoothing. Keep in mind we're in the time of the greatest energy demand increase in history. And Tesla Tesla's one of the biggest battery assemblers in the world. Energy company. So there are a lot of synergies. It would make this combined entity of space X and Tesla, the largest firm in the world, almost overnight. I would guess that would be nearly irresistible to him. But the big questions are. Would regulators approve and would there be complicating issues, like would Tesla be forced to divest their Chinese factory, which, by the way, produces just over half of all Teslas? So a lot to unpack. These are not easy things, but I can tell you more than a few people are thinking about that one. I am curious, I mean, you joined Tesla when it was still a private company, and there was a lot of, you know, pie in the sky predictions about what it could do running a public company. Excuse me? Running a private company with the ambitions of long term projects that could take years, if not decades, to complete. It's a lot different than running a public company, where every quarter, you're going to have a bunch of folks on Wall Street demanding answers here. So when I hear Mars and humanoid robots and the data centers in space, I mean, that's not happening this year may not be happening next year. Do you think that investors will give him a long enough leash to sort of get to those sort of multi-year, maybe even multi-decade projects. That's the big question. Look, in the early innings here. People are excited. They want to be excited. This is someone who is perhaps the greatest entrepreneur in history. And he's got a pretty decent, not perfect, but a pretty strong track record of accomplishment. So a lot of people are pulling for him, but no investors. Patience is eternal, and so they're going to be looking at tests that they're going to be looking at space to actually be saying, are we hitting the numbers? And I think we're all going to start to understand. How many satellites does Starlink have? Right now it's just under 11,000. How long is it going to take to get to 20,000? How many, uh, users do they have for broadband usage? How many people are using uh, is uh, is uh XII instead of Android uh or anthropic and OpenAI. Everybody is going to be tracking these numbers like crazy. And Ian, over time is going to have to produce like anybody else. And the numbers to track are how faster they're growing right now. Pretty darn fast, 100% year over year. The next question is going to be, what's that path to profitability? If it's $300 billion burned, that's going to test investors patience. We'll have to see how it's going to all shake out. Steve, I appreciate you taking time for us. Steve Wesley, former Tesla member, now founder of the Wesley Group. As that conference call kicks off, the shares remain under pressure and a lot of focus, of course, on the AI business. But ultimately the crown jewel of this company, so much of Elon Musk, Musk. His plans hinge on the success of Starship. Of course, the massive, fully reusable rocket that is in the late stages of development. Our next guest is a leading expert in the aerospace sector, designing technology for NASA, the Jet Propulsion Laboratory, the U.S. Air Force, the U.S. Navy. She joins us right now. Sean O'Sullivan, economist and former senior researcher at the Harvard Business School's Institute for Strategy and Competitiveness. Let's talk about Starship. And I am curious. I mean, most investors seem to have relative confidence that, uh, we will see this in full force sometime soon. You understand the technology? Are we there? We are not there yet. Now, you know, your previous guests have brilliantly outlined that what Elon is really good at doing is selling stuff. We have also seen that Elon is also very good at. Feels like a manufacturing stuff. The one thing I would say about Starship that should leave some people, uh, with a few more questions in their mind, let's just say, is the sheer complexity of what they are trying to do with Starship versus, uh, their former, uh, well, the current rocket that they're using to launch the Falcon rocket. So, you know, I think the, the what we're going to see and what we're starting to see is engineering slippage against timelines and budgets starting to become overrun. Which is the one thing that we know Elon is typically not known for doing. And the reason being that the level of complexity of Starship is categorically much, much larger than than the Falcon rocket. And so it's going to be really interesting to see if we can look at that R&D timeline against NASA's, uh, expected timelines, but also their internal timelines to see whether or not they're going to be able to stay on track for not only their own expenditure on the CapEx, but also to be able to start delivering much needed revenue gain in terms of Starlink and other projects. Is there any risk? I mean, there's been a lot of talk about that, that they need to sort of prove Starship's commercial viability. I think next year, by next year, if they're going to participate in Artemis, uh, NASA's Artemis three mission, which is effectively, you know, uh, that's going back to the moon. And I presumably beyond is that sort of the deadline that we're looking at right now? That is certainly a deadline now. You know, NASA has been pretty strict with space X, and they're not getting any special treatment here. They have kind of said if there's slippage on this timeline, the revenue that you're going to get from the government in terms of the Artemis and the space projects that you're doing through NASA, is going to be taken away from you. So there certainly is a real risk here that SpaceX is going to want to stay on track here. However, you know, in terms of the revenue that they're actually going to get for the Artemis missions, it's really small compared to the other business units that they have. You know, it's a it's a fraction of what they would try to get, uh, let's say in the I or the returns that they would need in the compute space. However, where the Artemis project is important for, uh, space X is strategically. Now, Elon's a lot of the mission. And the vision around this company has been built on his kind of very long term desire to go to Mars. He pulled back on that recently and kind of said, you know, I'm not sure Mars is actually the mission, the goal anymore of this company and kind of reiterated that, you know, the moon and the Artemis, uh, project is a much better, uh, vision and even then has kind of pull back on that more recently to say, you know, what? We wanted to increase civilizational, um, and human, uh, reach in space. Maybe the way to do that is with orbital data centers instead. So what I would kind of be looking for here is if we are seeing the mission and the vision changing so quickly coming out of space X, what are we to be looking for in terms of engineering and R&D? And if we're seeing the goalposts moving, which I suspect they are from Elon's personal motivation, and he's not that interested in space exploration anymore, where is that going to be reflected in revenues? And I think the move to orbital data centers, uh, and away from our own kind of Artemis and NASA missions, is is going to be important. Strategically, they will want to stick to those timelines though, because they kind of need to. The burn rate for Starship development is 3 billion or more a year for a company that's fairly lost making up the minute. That's not nothing. Yeah, well, I mean, what exactly ends up being the end result here? I mean, I know in the past, Musk has talked about this idea that he wants a Starship rocket basically launching every hour, which, you know, worries me for a lot of reasons, but also like, what exactly are we taking up? Do we need that much stuff going up every hour? I mean, maybe I'm just, you know, from a different generation where, you know, we had, you know, seemed to seem like a rocket launch once, you know, every few months. But, um, you know, that's a lot. And I guess, and I don't mean to be glib about it, but I'm looking at it more from a, a cost effectiveness, uh, accretive to the bottom line is that type of launch schedule, if he is indeed serious about that. Is there enough demand for the product for the service, I should say, to justify that? this is such a good question, because what we always hear about in this industry is Elon's vision visa v supply. I want to send rockets every, you know, X days, hours, minutes, whatever. Whatever he thinks about that morning becomes kind of, you know, the next strategy in place. However, let's actually look at what demand is driving this. And very interestingly, you know, ultimately you have space X at the minute delivering the the vast majority of launches, US launches, uh, and certainly global launches are a lot of them are going through a lot of them are going through space X. However, what we've seen, you know, the entire industry was kind of as a as it moves out of the government and into this kind of commercial stage was predicated on the cost of launch falling through Falcon's launch, which was going to kind of create this, this boom in demand. What we saw was that the the cost of launch fell, but the price to the customer did not fall to the extent that was expected. And what we saw in return was that the demand did not increase as analysts once expected. So when you look at the demand for launch at the minute, most of Space X's launch is for its own services. So, you know, I guess the question is, is Elon going to be able to generate the demand downstream to justify Starship launching as often and as much cargo as as far as. Uh, is. So, uh, I think uh, I think we lost the innate, uh, connection there. Uh, you know, I do have one last question before we let you go. And this has to do with the idea of, uh, the singularity of what Starship is and what it represents. And and whether you, as a scientist, believe that there could be any sort of meaningful competition to it. Right now, a Falcon nine for a while was the only game in town for it, I assume. Assuming Starship makes it on the timeline, it will be the only game on town for a while, but there are a lot of other companies out there that think that they can actually be a player in this as well. Do you see the potential for real competition in this space? It's really hard to say. I think, you know, Elon Musk started really early and he got the full support of the US government, and now he's been able to create essentially a monopoly in this in this space. Um, it's going to be really, really hard for a competitor to steal enough of that market share to make their own economics work. But again, let's not forget Elon also created his own demand. So a competitor is not only going to have to steal market share from the Falcon or Starship, uh, launch vehicle. They're going to have to get really good at generating their own demand to make the economics work. And, you know, we still haven't seen any of these actual economics from the launch services yet. If they were profitable, we probably would have heard this before. So we don't even know if the segment by itself is ever going to be profitable. And this this will ultimately decide whether or not a competitor wants to compete for what is ultimately a loss making exercise. It's really great to have you here. Really insightful. Shana O'Sullivan. She's an economist and former senior researcher at the Harvard Business School is Institute for Strategy and Competitiveness Competitiveness and worked at NASA, the Jet Propulsion Lab and other places there as we continue to watch us space. She is under pressure as the conference call gets off the downdraft in those shares in the after hours trade, dragging down some other names as well. AMD did come out with its earnings. It did beat and it did actually guide slightly higher than estimates, though there was a bit of concern about margins as well as the CapEx spend. Though, shares is down about 8%. Dell, Marvell, Intel also moving lower in sympathy as well. We do want to talk a little bit more about data centers and maybe data centers right here on Earth, because that's still where we're building them. So we want to dive a little bit deeper into some of those CapEx, CapEx figures that we just heard, SpaceX's second quarter CapEx coming in, actually below estimates, while AMD's well above estimates. John Medina joins us right now. Senior Vice president, Global Project and infrastructure Finance over at Moody's rating. All right, John, I mean, where do we stand right now. Because it seems like if I if we spoke to you, I don't know, a few months ago, you seem investors were pretty comfortable with all of the borrowing that was going on to build out these data centers. Certainly in the last few weeks, there's been a bit of a rethink of that. We've started to see some spreads widening, and I was just doing the math earlier today on the Bloomberg terminal. I mean, the majority, the vast majority, 75, 80% of the data center securities that have been issued since last year, since the beginning of last year, are now trading wider than at issuance. What does that tell you? Banks remain, and that's a good question. And part of it has to do, I think, with not just the market changes, but also where we are in the timing of the year itself. Right? So a lot of these new projects that came to market were in the first half of the year. So a lot of new capital was deployed, a lot of new investors. And so that's hitting the secondary, that's hitting different markets. And so you're seeing that kind of work its way through the broader market. And in the second half of the year, often those allocations are already allocated right. So capital can become tighter. Spreads may widen just because people have already deployed what they were allowed to invest for the year in that one sector. And so you'll see kind of probably the same thing happen next year and the year after, because we're looking at a multiple year build out cycle here. So I think the widening, the spreads and tightening of spreads is probably going to continue for several years just depending on the sentiment. But the train moving forward in terms of the need for capital and then the need for more capital will continue. What's the what's that cost of capital, though, look like going forward? I think the cost of capital does depend on the risk you're seeing. I think different names, you know, associated with certain spreads. I think we are seeing a higher spread risk. You know, particularly there was one deal that priced, I think, at 7.5%, 7.5%, you know, going out to 20, 45. Uh, a similar deal, you know, was much in April, also 7.5%. We've seen things in a 6% range recently, a deal priced in over 9%. Right. In terms of, uh, it's it's ten. It was a below investment grade tenant. Yeah. So those will price even wider. But usually data center ratings. You know, our data center spreads and credits tend to be in the six and a half 7.5% pretty consistently. They kind of go up and down. And when you're outside of that range, there is a reason you have a much lower risk or potentially higher risk. Well, with regards to some of the, uh, some of the debt deals, the collateralized debt deals, I mean, there has been a lot of talk about, uh, sort of, uh, you know, the payments that you're making relative to, uh, the repayments that you will have to make on whatever revenue is generated from that. There's been a lot of talk about the value of these GPA's declining and creating a mismatch with regards to what's being taken in and the value of what you have and the value of what you have to pay back. So it's interesting in the GPU financings, we are seeing an increase in those, and you'll see some of those come to market soon as well. They are borrowing over a period of time that's within the lease that's coming with the hyper scalar tenant. Right. So 5 or 6 years you're not seeing really an extension beyond that. But there is that risk of the data center that maybe has a 15 year lease with that same tenant that only has a six year revenue lease. So they have to renew that or find another tenant, you know, after that first 5 or 6 years in order to continue to pay under their 15 year data center lease. That is that mismatch that you're talking about that we do see in some situations. What about the hidden risk? A lot of people will say, okay, a lot of this is being done off balance sheet. You got spvs, you got joint ventures. Uh, I've lost track of how many circular deals are being made where Nvidia sort of makes a quote unquote investment in this. And then of course, obviously ends up collecting revenue from that company in return. Uh, how much of that can you accurately assess when trying to determine what the true, uh, credit value or credit or risk is when we're looking at these big companies, right? While they do have these forward leases, you know, unfulfilled liabilities, I think it's up to 100, 820 billion right now, uh, for the largest hyperscalers as of just about a few months ago. So a pretty large number. But that number also comes with revenue. So when we forecast forward, we forecast both the revenue. And we look at that liability as well. And a lot of the revenue growth we've also seen in recent earnings reports you know it's increasing right. Because of this backlog of clients for cloud services and other services that are now being fulfilled. So you're seeing even a higher revenue growth that can cover that leverage. You can cover that that long term debt, those off balance sheet liabilities. And so I will say our analysts are all in touch with each other, are keeping track, are looking forward to what is yet to be reported because we are aware of what's under construction, but are also, you know, very conscious of the other side of that equation. It's not just a cost. There is revenue generation that is very much showing up now associated with these investments. John, always a pleasure. John Medina, senior vice president of global project and infrastructure finance at Moody's Ratings, keeping an eye on some of those debt financing deals to fund these data centers. Meanwhile, our next guest is pushing headlong into data centers, a growing data center backlog of about $1.6 billion on his books. As his company expands to meet the power demand driven by I. Aaron York is the chairman, president and CEO of Generac, and he joins us right now. Aaron, great to have you here on the program. Anybody who thinks you're just, you know, the guy you go to when you need a generator to, you know, get yourself through a hurricane, obviously hasn't been paying attention to your company. You've made a big pivot into the data center space. You've gotten the certifications here. How much how big of a business do you think this can be for Generac. Yeah. Thanks for having me on, Ramon. Um, yeah, I think you're. You know, you're hitting the nail on the head here. A lot of people have thought of our company historically as kind of a consumer goods company, and we have been for 70 years selling generators and backup power into, you know, uh, that residential market primarily. But we've been growing a commercial and industrial business over the last 40 years. And in fact, over the last ten years, we've pushed very hard into expanding that business, a number of acquisitions. And, you know, we just rolled out, as you indicated, this product line that's geared directly towards a larger format backup for the data centers. And it's going to be a big business. I mean, as you said, our backlogs at 1.6 billion already last 90 days, we recorded over $1 billion in new business. Uh, just in that, you know, adding to that backlog. And we're working to triple, uh, our capacity there. We're trying to get close to $4 billion a year in capacity. And so I think when you step back, what we see in the future here is a company that's a lot better balance. You know, between our residential business and our commercial and industrial business. I mean, you've talked about you and your executives about a generational opportunity here that maybe you could even double your commercial business, uh, revenue, uh, in 3 to 5 years. But when I think about some of the large, uh, players, a large megawatt players, if you will, I think caterpillar, I think Cummins, uh, I don't know, Rolls-Royce, maybe a few others here. Uh, are you able to compete with them now, or is this sort of a ramp up to be able to be better, um, more competitive with them? Yeah, those companies have been in this space for a lot longer than we have in terms of the high end of the product range that serves this end of the market, where new to it, you know, but we've been in the commercial and industrial market backing up hospitals and backing up cold chain distribution centers and water treatment plants and things for a long time. But this new product for us is going to compete head to head with those companies that you mentioned. Um, and we're just bringing it online. So this year we'll ship about $450 million worth of, uh, product in that range, competing directly with those guys. Uh, and that's going to grow dramatically in the years ahead, as you said, you know, we had. When we rolled out our Investor Day in last, uh, in March, we said maybe we can double this side of our business, the commercial industrial side of our business. It actually looks and that was going to be a 3 to 5 year plan. It actually looks like we might do that next year. So, uh, you know, in terms of just the uptake for this product line and the demand is, is incredible. Uh, I mean, what are people using your generators for with regards to the at the eye centers, are they using a truly as backup, or are we starting to see companies maybe run them kind of as a bridge, as a bridge, until the electrical grid in those areas catches up with the actual build out and the products that we offer are specifically for emergency backup. So the grid goes down or their prime source of power goes down. Our generators start up and they take the place of that prime source of power. Uh, and again, these are the same products that you would see on other types of commercial, uh, you know, commercial applications, telecommunications applications, hospitals and things like that. So, uh, there are bridge power solutions that are needed, right? I mean, the great interconnect queues are growing at an incredible rate. And so we've got a lot of data center customers who are, you know, they're providing some of their behind the meter power source initially, maybe turbines, maybe even, uh, reciprocating, you know, engine driven gen sets. Uh, but those are going to be temporary in nature. I think those ultimately these customers are going to want to be connected to the grid. That's the, you know, the lowest, uh, you know, kind of cost way to get connected to the grid. Most reliable source of power is going to be grid connected. And, you know, backup power is an absolute must have in these applications. You've got to have five nines of uptime. And, you know, any type of cloud compute or any type of, uh, AI inference, learning type of situation. Um, are you comfortable? And I know right now you're still early, kind of in this, uh, in this build out. But, um, I know you haven't named the customers, but it's still a small cohort of customers. Are you worried at all about some of the concentration risk with regards to, uh, this new revenue that you're generating? Do you have confidence it'll broaden? We do. You know, as you mentioned, we've got two hyperscale customers that we've, uh, that we've inked deals with. Uh, those orders are going to be forthcoming, and they're going to underpin a lot of our volume and our increase next year in 2027. But we've also been adding co locators. So, you know, smaller data centers. And when I say small you know these are $100 million deals $200 million $300 million deal. So in and of themselves, they're they're very sizable, uh, customers. But they pale in comparison, obviously, to some of the hyperscale customers and in terms of what they can buy. But but obviously we want to broaden that out. You know, it's like the number one rule in anything in business is you don't want to have concentration of risk in anything inclusive of your customer base. So there's going to be, you know, there's a lot of developers out there. There's a lot of demand beyond the hyperscalers. We love the deals that we're putting together with these hyperscale customers. But the co locators are are growing uh, quite quickly as well. Um, you are by all intents and purposes, at least on Wall Street, pretty much valued now almost as an eye stock. But of course with that and that's definitely benefited your stock. But of course with that comes a lot of volatility has uh, as you seen firsthand, you're comfortable with that. Well I mean I guess as comfortable as you can be in the volatility in your stock. I mean, you know, the stock runs up to 290 and then comes back down to 200 today. It's up uh, you know another $18 or whatever in one day. Um, and you're right, you know, this I trade is is choppy. Right. I think there's, there's a lot of things that, uh, that are underpinning this in terms of the CapEx spending. You've been mentioning that on your program and a lot of other programs. We've mentioned this, as well as 750 billion of CapEx spending by hyperscalers in a single year. How sustainable is that? You know, you get over your skis in terms of spending CapEx beyond your free cash flow generation? I mean, clearly that's not sustainable, but does it go from 750 billion down to 50 billion, or is it something more like 400 billion on an on a go forward basis? I think there's a lot of things that, you know, we're pretty early innings here in this build out story. Uh, but I can tell you that all the conversations we've had, not only with the hyperscalers but the developers themselves, uh, is that at least for the next 5 to 7 years, what you're looking at here is a pretty massive build out. And I think that, you know, the eye trade well, maybe choppy, uh, you know, in the interim here, I think over time. Yeah. And you've seen this, you've seen what Caterpillar's done, you've seen what companies have done, you've seen what it's done. You've seen the returns here. Uh, I think that that's something you can look forward to for the near term. Hey, Aaron, really appreciate you joining us, uh, today. Obviously a fascinating, uh, growth story here. Uh, for Generac. We'll catch up with you soon, I'm sure. In Yorkville, they're the chairman, president and CEO of Generac. As we continue to keep an eye on that conference call for SpaceX underway right now, we are hearing from some of the executives on that call talking about the near-term priorities and launching the mobile V2 satellites and, of course, what goes on with Starship. Joining us right now to talk a little bit more about this is Ed Ludlow, who I pretty sure has been listening in to that conference call. Ed, I mean, I've been saying this all hour. I mean, the numbers from last quarter are almost immaterial for a lot of folks out there. This is really about the long term story. What are they articulating right now in the conference call? Yeah, that all the business lines have momentum. Right. There is some kind of operational updates, which is that, you know, right now SpaceX is benefiting a lot from the investment it made in its own data centers, because it's renting out that capacity to third parties, namely Anthropic and Google. And so the AI division, while the spending is concentrated there, it is allowed for some pretty positive numbers on the bottom line in isolation on that unit. And Musk is talking about that being the direction of travel, though. End the year with two gigawatts of capacity installed and that they will continue to ramp up from that point. Orbital data centers. Data centers in space are on track to launch next year. And they've gone with Nvidia. Is the exclusive compute provider something that broke just before the closing bell. But they basically explain they look at all the architectures and videos with the best. So they went with that. And that's a departure from their previous strategy, where they said they'd look at all of the different compute platforms available, make reference designs, and pick the best one. They pick the best one. Other than that, I think we don't have forward looking guidance. Revenue. Capital expenditures. But the CFO is talking. Uh, yeah, the CFO is talking. Hopefully we'll get some of those numbers on the CapEx side. How much does that matter to investors? I mean, I when I look at some of the plans that that Musk has laid out, I mean, it sounds like that's going to cost a lot of money, but it doesn't seem like you have the same scrutiny over CapEx that maybe we saw for the hyperscalers and some of the others. Yeah, I mean, you know, the liquidity position is they have $100 billion to play with, right, post IPO and what they did in the debt markets. And the street thinks they'll say they'll spend $45 billion plus or minus this year. You know, the compute side of it, what they're doing on Earth as well as what they hosted in space is expensive. You know, I guess where they're spending will be concentrated, um, and it will impact supply chains, right. If they're going to be a big spender on Nvidia compute, there is a Tesla exposure because of the joint, um, direction with Terra Fab. That's their shared chip manufacturing initiative. Yeah. You know, the spending will matter. The level of it will matter. All right. Ludlow, co-host of a big tech there. We should point out that conference call still going on. You can type teeth live on your Bloomberg terminal to continue. See a live blog about that. We'll continue with full coverage on Bloomberg Television, even into Balance of Power. But as of right now, you see the reaction in the shares in the post-market here space down about 7%. This after reporting pretty much what we knew. There is revenue growth, not necessarily profitability. With the exception of the Starlink business, Advanced Micro Devices, they were also out with earnings. They did beat on several key metrics, their guidance relatively in line, but a few numbers came in like that conference call also underway, those shares down about 7%. A lot of names in the broader AI space being dragged down. We'll see if this flips into the cash session tomorrow morning at 930. But stick around right here on Bloomberg Television. A lot more coming up. The team at Balance of Power. They take the baton up next.