# Salesforce Jumps Most Since 2020 on Outlook, Anthropic Deal

An episode of [Bloomberg Intelligence](https://invisiblenetwork.ai/podcast/326301337), 27 Aug 2026, 22 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7f534b8c-9e91-429a-b102-ae3c00090c6d/27561f94-f860-457c-94a2-b4b3010f2e37/audio.mp3?utm_source=Podcast&in_playlist=0ad812bf-fd15-4012-a18c-ae3c00090c76

Watch Paul and Scarlet LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg Intelligence hosted by Paul Sweeney and Scarlet Fu -Anurag Rana, Senior Tech Analyst for Bloomberg Intelligence, recaps Salesforce earnings. Salesforce Inc. jumped after the software company gave an outlook for strong revenue expansion and deepened its partnership with Anthropic PBC. Sales will be about $11.5 billion in the fiscal third quarter, and current remaining performance obligations will increase about 14%. -Kunjan Sobhani, Bloomberg Intelligence Senior Semiconductor Analyst, recaps Nvidia earnings. Nvidia Corp. said revenue will grow about 70% next fiscal year, outstripping analysts’ estimates for a 45% jump. The company's Chief Financial Officer Colette Kress said Nvidia would grow faster if it had access to more supplies, and that customers' forecasts point to the company's growth doubling next year. -Matthew Schettenhelm, Bloomberg Intelligence Media Litigation Analyst, discusses the latest on Meta. Meta Platforms Inc.'s changes to Instagram and Facebook will apply only to US users for now, and include limits to how long younger users can spend on the apps and restrictions on switching off safety settings. The changes are part of a series of landmark settlements to resolve claims that the social media networks are a safety risk to children, and will cost the company as much as $18 billion. -Redd Brown, Bloomberg Consumer Reporter, discusses earnings from Dollar Tree and Dollar General. Dollar Tree Inc. mostly met Wall Street expectations last quarter and left its sales growth outlook for the year unchanged. Dollar General Corp. lifted its view for annual revenue after a quarterly sales beat, with comparable sales growth of 3.5% in the second quarter. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios.
[0:04] Speaker 2: Podcasts.
[0:05] Speaker 3: Radio.
[0:06] Speaker 2: News.
[0:09] Speaker 4: You're listening to the Bloomberg Intelligence Podcast. Catch us live
[0:13] Speaker 4: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
[0:16] Speaker 4: Auto with the Bloomberg Business App. Listen on demand wherever
[0:19] Speaker 4: you get your podcasts or watch us live on YouTube.
[0:24] Speaker 5: Remember earlier this year when the software stocks and particularly
[0:26] Speaker 5: software as a service stocks were just dumped? I'm talking
[0:29] Speaker 5: down 30, 40, 50 percent for some of these names
[0:32] Speaker 5: like CrowdStrike and some of these other names have just
[0:36] Speaker 5: rock solid for a long time. Well, they're bouncing back
[0:38] Speaker 5: here today. One of them is Salesforce. It's up about 17,
[0:42] Speaker 5: 18 percent today. This company gave an outlook for strong
[0:45] Speaker 5: revenue expansion today. And they reported they're deepening their partnership
[0:49] Speaker 5: with Anthropic PBC. That's all it took for this stock
[0:52] Speaker 5: to bounce back as I thought it would. Anurag Rana,
[0:55] Speaker 5: Senior Technology Analyst for Bloomberg Intelligence, joins us here. So, Anurag,
[0:58] Speaker 5: we're having Salesforce. I'm looking at CrowdStrike as well. A
[1:02] Speaker 5: couple of these names that are up sharply today. Let's
[1:04] Speaker 5: talk about Salesforce. What did they report?
[1:08] Speaker 6: So one of the things that we have talked about
[1:09] Speaker 6: almost for, I mean, 18 months or so is that
[1:12] Speaker 6: there is a bifurcation in enterprise tech spending with software
[1:16] Speaker 6: and services being the casualty of it and servers, hardware,
[1:19] Speaker 6: and AI infrastructure is where all the funding is going.
[1:22] Speaker 6: And that was going on for Salesforce for the longest
[1:25] Speaker 6: period of time. Their bookings data or the forward-looking data
[1:28] Speaker 6: was on the downward trajectory. For the first time yesterday,
[1:32] Speaker 6: we saw organically there was a slight uptick in that.
[1:35] Speaker 7: And that was only by one percentage point.
[1:37] Speaker 6: So think about it that organically they were supposed to
[1:40] Speaker 6: grow roughly around 9% or so, you know, they grew
[1:43] Speaker 6: 10 and they guided for 11. I think that's what
[1:45] Speaker 6: it took for the first time to see that U-turn
[1:48] Speaker 6: and that's, you know, drove the stock. The anthropic deal
[1:50] Speaker 6: is another discussion, but frankly speaking, I think that's a
[1:53] Speaker 6: little bit more marketing than reality, you know, but it's
[1:57] Speaker 6: the organic core growth is what I think is the
[2:00] Speaker 6: most important factor to think to focus on.
[2:03] Speaker 5: So what's kind of, the market's discounting mechanism now, Anurag,
[2:06] Speaker 5: as it relates to software and which software companies are
[2:10] Speaker 5: maybe more vulnerable to AI than others? How has that
[2:13] Speaker 5: thinking evolved?
[2:15] Speaker 6: Yeah, so I would say for the longest period of time,
[2:18] Speaker 6: I would say that all of this year and maybe
[2:20] Speaker 6: the last few months of last year, there is only
[2:23] Speaker 6: one trade in the market. buy semis, short software, or
[2:27] Speaker 6: buy memory and short software. And to be very honest,
[2:30] Speaker 6: over the last one month or so, we are seeing
[2:32] Speaker 6: a bit of a reversal in that. And today also is,
[2:34] Speaker 6: you know, today is probably one of the unique days
[2:36] Speaker 6: where both Nvidia is up and software is up.
[2:39] Speaker 7: Usually you don't see that there.
[2:41] Speaker 6: But a lot of people have been caught off guard
[2:43] Speaker 6: on that, you know, short software trade, which is why
[2:46] Speaker 6: the rebound, the scale of the rebound is so high.
[2:49] Speaker 6: But when you look at the overall software space, what
[2:51] Speaker 6: we have been saying for a while is, there are
[2:53] Speaker 6: a few large enterprise software companies that are critical systems
[2:57] Speaker 6: of record. You know, somebody like an SAP, somebody like
[3:00] Speaker 6: a Salesforce, somebody like a ServiceNow or a Workday, where
[3:04] Speaker 6: you really need to store a lot of what the
[3:06] Speaker 6: critical data is. So I think those are the ones
[3:09] Speaker 6: that have a better positioning in the market compared to
[3:12] Speaker 6: some of the smaller vendors that are only selling it
[3:15] Speaker 6: to small and medium business market where the software itself
[3:18] Speaker 6: is not that complicated. And perhaps somebody, you know, you
[3:21] Speaker 6: can get more competition in that market.
[3:24] Speaker 5: So is Salesforce with this Anthropic deal? Are they trying
[3:27] Speaker 5: to pitch it to the marketplace that, you know, AI
[3:30] Speaker 5: is not a threat. In fact, we're partnering with Anthropic
[3:34] Speaker 5: to make our service even more valuable.
[3:36] Speaker 2: Is that the pitch?
[3:38] Speaker 6: Yeah, and another company called Figma showed this in their
[3:41] Speaker 6: day-to-day operation. What it showed people was you open your
[3:45] Speaker 6: cloud app and you start working in it directly. And
[3:48] Speaker 6: if you need to create something, you will do it
[3:49] Speaker 6: right there. This is what Salesforce is saying to people
[3:52] Speaker 6: that if you are a salesperson and you have your
[3:54] Speaker 6: cloud app, you can run your Salesforce app through it
[3:58] Speaker 6: rather than opening another Salesforce app on the side. Which
[4:01] Speaker 6: means that Salesforce, think about it, will be more about
[4:04] Speaker 6: the back end, the data, the security, the business rules.
[4:08] Speaker 6: And people will still use it to store the data
[4:11] Speaker 6: or the logic, but you will use Cloud for the
[4:14] Speaker 6: interface of it.
[4:16] Speaker 5: And is that what's, in fact, happening out there? Are
[4:19] Speaker 5: we seeing evidence that that's actually happening?
[4:22] Speaker 6: They just announced the deal, so it's going to take
[4:24] Speaker 6: some time for all this integration to happen. But one
[4:27] Speaker 6: of the things that we have said is every company
[4:29] Speaker 6: will have a different system of engagement. You and I
[4:32] Speaker 6: will engage through these consumer apps to do whatever we
[4:35] Speaker 6: are doing. I can see down the road if I'm driving,
[4:38] Speaker 6: I can ask Siri to make some changes and it
[4:40] Speaker 6: will happen. But for large enterprises, they will create their
[4:43] Speaker 6: own app, you know, like what Bloomberg has with AskBee.
[4:46] Speaker 7: And that app will drive everything.
[4:48] Speaker 6: But the background is still going to be some of
[4:51] Speaker 6: these apps that store that critical system of record data.
[4:54] Speaker 2: All right.
[4:54] Speaker 5: Let's just before we let you go, I just want
[4:56] Speaker 5: to get your latest thinking on Microsoft here. It's up
[4:58] Speaker 5: about 3% year to date. It was down 25% year
[5:01] Speaker 5: to date just several months ago. So it's had a
[5:03] Speaker 5: nice rebound here. What's the current thinking on Microsoft?
[5:07] Speaker 7: So the rebound, I think, is dictated by two things.
[5:10] Speaker 6: By them saying, we'll be free cash flow positive next year,
[5:13] Speaker 6: and the CapEx is not going to be, I would say,
[5:16] Speaker 6: as crazy as it had been. However, the other thing
[5:20] Speaker 6: is they're also making good progress on their custom chips.
[5:23] Speaker 6: I think number one factor for every cloud provider now
[5:26] Speaker 6: is what are they doing with their own chips? Amazon's
[5:29] Speaker 6: done a very good job with it. Google's clearly the
[5:32] Speaker 6: leader in that space. And I think if Amazon can,
[5:34] Speaker 6: and if Microsoft can figure out their chip strategy, they'll
[5:38] Speaker 6: be able to recognize their cloud backlog much faster. At
[5:41] Speaker 6: the same time, spend less on R & D or
[5:44] Speaker 6: chip development, or basically spending with Nvidia, I mean.
[5:47] Speaker 5: And is that, 30 seconds left, how much of a
[5:49] Speaker 5: threat is that to Nvidia?
[5:51] Speaker 6: Well, right now, the demand is so much, it won't matter.
[5:55] Speaker 6: You could say near term, for the next three years,
[5:57] Speaker 6: it's not an issue. After that, NVIDIA will have to
[6:00] Speaker 6: figure out a way to create a bigger ecosystem, what
[6:02] Speaker 6: they have.
[6:04] Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
[6:10] Speaker 4: You're listening to the Bloomberg Intelligence Podcast. Catch us live
[6:14] Speaker 4: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
[6:17] Speaker 4: Auto with the Bloomberg Business App. Listen on demand wherever
[6:21] Speaker 4: you get your podcasts or watch us live on YouTube.
[6:25] Speaker 5: NVIDIA gave us a bullish sales outlook for fiscal 2028,
[6:28] Speaker 5: easing concerns that AI spending is not poised to lose
[6:34] Speaker 5: any momentum. There's very strong growth. During the post-earnings conference call,
[6:39] Speaker 5: Chief Financial Officer Chris said they expect growth revenue to
[6:43] Speaker 5: surge in fiscal 2028. Stick with us.
[6:46] Speaker 8: The surge in AI demand is driving a global infrastructure build-out,
[6:51] Speaker 8: supported by an expanding and diverse set of growth opportunities,
[6:56] Speaker 8: spanning hyperscalers, AI labs, AI natives, enterprises, and sovereign customers.
[7:02] Speaker 8: We expect to grow revenue by approximately 70 percent in
[7:08] Speaker 8: fiscal 2028.
[7:09] Speaker 5: That was Colette Cress, the CFO of the NVIDIA. And
[7:15] Speaker 5: they had a very bullish call last night.
[7:17] Speaker 2: Again, 70 percent.
[7:19] Speaker 5: Revenue growth. And folks, just to put that in context,
[7:21] Speaker 5: the trailing revenue for this company is like $ 300 billion.
[7:24] Speaker 5: Growing that number by 70%.
[7:25] Speaker 2: I know.
[7:26] Speaker 9: These numbers are so massive, it's kind of hard to
[7:28] Speaker 9: wrap your head around.
[7:29] Speaker 5: Yeah, it's just extraordinary. Let's break down the details of
[7:32] Speaker 5: the NVIDIA print. Kujan Salvani joins us, senior analyst. He
[7:35] Speaker 5: covers all the semiconductor companies for Bloomberg Intelligence. Kujan, thanks
[7:38] Speaker 5: so much for joining us here. 70%, where does that
[7:42] Speaker 5: number come from?
[7:45] Speaker 10: Yeah, I mean, look, that's almost 100 billion above what
[7:49] Speaker 10: the street thought.
[7:50] Speaker 2: And it really speaks to a couple of things.
[7:52] Speaker 10: One, of course, like you mentioned, the AI demand is
[7:56] Speaker 10: there's no signs of stopping. But what was really surprising
[7:59] Speaker 10: is like, how are they going to get the supply?
[8:01] Speaker 10: Because what we hear everywhere is their supply constraint. And
[8:04] Speaker 10: I think this speak this validates that theory when, you know,
[8:07] Speaker 10: for the last 12 months, they have been significantly increasing
[8:11] Speaker 10: their purchase commitments to the level of now 250 billion dollars,
[8:16] Speaker 10: which was sort of a risk factor for a lot
[8:18] Speaker 10: of people. There were concerns that they are putting into
[8:20] Speaker 10: too much into supply chain. But this is the result
[8:22] Speaker 10: you get right when you almost like have a stake
[8:25] Speaker 10: in every partner, a supply chain partner, you can lock
[8:27] Speaker 10: in capacity, you can get priority. Frankly, you can get
[8:31] Speaker 10: a much more discounted price than what you would get
[8:33] Speaker 10: as a new customer today, whether it's for memory and wafer.
[8:35] Speaker 10: So this really validates that the investment they have been doing,
[8:39] Speaker 10: which were seen as risks, are finally paying dividends now
[8:42] Speaker 10: where you can come and beat with such a high
[8:45] Speaker 10: number in a supply-constrained environment.
[8:47] Speaker 9: What did we learn from NVIDIA's results and the commentary
[8:50] Speaker 9: from executives about NVIDIA's willingness to continue investing in other
[8:56] Speaker 9: companies in its ecosystem?
[8:59] Speaker 10: Yeah, so this is for the first time, which they
[9:01] Speaker 10: have not done in the past many quarters. They gave
[9:03] Speaker 10: a lot more disclosures around the investments they're making, the
[9:07] Speaker 10: different types of investments making. One thing it does, it
[9:10] Speaker 10: sort of eases a little bit with the circular financing concerns.
[9:15] Speaker 10: And what I mean is gives investors a little bit
[9:18] Speaker 10: more transparency. Now, it's not completely takes away the risk, right?
[9:22] Speaker 10: The fears or the risk of what happens in a downturn,
[9:25] Speaker 10: but at least gives us a lot more transparency. The
[9:28] Speaker 10: way they are going about investing in these companies, they're
[9:31] Speaker 10: using sort of four different approaches. One is backstopping the
[9:35] Speaker 10: conglomerate of banks to the degree of $ 500 billion that
[9:39] Speaker 10: they're going to support the frontier labs to do their build-out.
[9:43] Speaker 10: They're approaching a new business model with the AI clouds, again,
[9:47] Speaker 10: helping them build out.
[9:48] Speaker 2: And what this does is accelerate the build-out of these companies.
[9:52] Speaker 10: Private or non-investment-grade public companies who are reallocated by land, power, shell,
[9:58] Speaker 10: and available balance sheet.
[10:00] Speaker 5: So one of the competitive threats that seems reasonable to
[10:05] Speaker 5: me is some of NVIDIA's key customers, whether it's Microsoft
[10:10] Speaker 5: or I don't know who it is, developing their own chips.
[10:14] Speaker 5: Flesh that risk out for us.
[10:18] Speaker 2: Yeah, look, that's a definite risk.
[10:20] Speaker 10: You know, again, when we just started with 100% market
[10:22] Speaker 10: share of this market, right? I mean, there's only one
[10:25] Speaker 10: way to go from 100.
[10:26] Speaker 2: You just go down. There's nothing above. So there is
[10:29] Speaker 2: a definite risk.
[10:31] Speaker 10: Again, where we are in the demand environment and the
[10:34] Speaker 10: constraints and NVIDIA has shown like, look, they have locked
[10:37] Speaker 10: in such great supply capacity. So we don't think this
[10:41] Speaker 10: will hurt their ability to grow their own revenues. We
[10:45] Speaker 10: definitely believe ASICs are going to take unit share away.
[10:48] Speaker 10: But at this point, we think all of their customers
[10:51] Speaker 10: are still going to have a multi-vendor solution where NVIDIA
[10:54] Speaker 10: still will be a big part of a customer. AWS,
[10:56] Speaker 10: in fact, extended their deals with NVIDIA, which they had
[11:00] Speaker 10: in the past. And AWS is also ramping up their
[11:02] Speaker 10: own unit volume. So as long as the demand trend
[11:04] Speaker 10: continues up, there's enough space for NVIDIA and its customers
[11:08] Speaker 10: also to deploy their own chips.
[11:10] Speaker 9: We know that NVIDIA has been trying to expand its
[11:12] Speaker 9: customer base and not just relying on hyperscalers from Amazon
[11:17] Speaker 9: to Google. How is it doing on that effort to
[11:23] Speaker 9: become more dependent on a wider group of companies rather
[11:26] Speaker 9: than just those tech giants?
[11:29] Speaker 2: I think they are doing a great job.
[11:30] Speaker 10: And this is something we have been calling out for
[11:33] Speaker 10: a while in our research that everyone is just focused
[11:35] Speaker 10: on the top four or five hyperscaler spending.
[11:38] Speaker 2: But the result just showed you.
[11:40] Speaker 10: So if you look at their fiscal 28, the 70%
[11:42] Speaker 10: growth they've said, they are actually going to grow faster
[11:47] Speaker 10: than the top five hyperscale CapEx growth. which suggests a
[11:50] Speaker 10: couple of things. One, they're not totally dependent on these
[11:53] Speaker 10: top five spending. And even if the top five sort
[11:56] Speaker 10: of slow the spending, they have other avenues in other
[11:59] Speaker 10: customer bases, other geographies where they can really offset.
[12:02] Speaker 2: And continue going faster than the market.
[12:04] Speaker 10: Second, with the new segmentation that they have done, which
[12:08] Speaker 10: is the ACE segment, which includes the AI clouds, which
[12:11] Speaker 10: includes sovereign, which includes enterprises and industries. The company has
[12:15] Speaker 10: started to give us a lot more color now, which
[12:18] Speaker 10: they did last night as well, which shows that this
[12:20] Speaker 10: bucket is actually growing faster, but expected to go faster than.
[12:24] Speaker 2: Just the top five. So this really speaks to the
[12:26] Speaker 2: strength of diversification.
[12:29] Speaker 5: Kunjan, talk to us about some of their competitors in
[12:31] Speaker 5: the chip business, advanced micro devices, the broad comms of
[12:34] Speaker 5: the world. How are the competitors kind of responding to
[12:37] Speaker 5: Nvidia and seems to be continuing to set the bar
[12:40] Speaker 5: higher and higher.
[12:42] Speaker 10: Yeah, I mean, look, for the competitors, like, it's the
[12:46] Speaker 10: tide that's lifting all boats. So everyone is really enjoying
[12:49] Speaker 10: the stakes, even though all of its competitors continue to
[12:52] Speaker 10: beat and raise and keep raising the benchmark. But with
[12:55] Speaker 10: this significant race for the next year, I think in
[12:58] Speaker 10: terms of the share, NVIDIA might be actually increasing their
[13:02] Speaker 10: share than what we had thought. But again, everyone wants
[13:05] Speaker 10: a multi-vendor strategy. So the competitors are also enjoying where,
[13:09] Speaker 10: you know, if you are a 1% share taker of
[13:11] Speaker 10: the market and you go to 1% to 2%, you'd
[13:13] Speaker 10: significantly doubling your revenue.
[13:15] Speaker 9: Still stay with us more from bloomberg intelligence coming up
[13:19] Speaker 9: after this.
[13:23] Speaker 4: You're listening to the bloomberg intelligence podcast catch us live
[13:27] Speaker 4: weekdays at 10 a.m eastern on apple carplay and android
[13:30] Speaker 4: auto with the bloomberg business app listen on demand wherever
[13:34] Speaker 4: you get your podcasts or watch us live on youtube.
[13:38] Speaker 5: Getting back to the market here, specifically to Meta Platforms,
[13:41] Speaker 5: we're learning more and more about their agreement with the
[13:44] Speaker 5: state's attorney general. Meta's teen safeguards on Facebook and Instagram
[13:49] Speaker 5: apply only to the U.S. That was something new, I think,
[13:52] Speaker 5: for the marketplace. Matt Schuttenholm joins us here at Bloomberg.
[13:55] Speaker 5: Intelligence Media Litigation Analyst. Matt, you've now gotten, I'm guessing,
[13:59] Speaker 5: through most of this settlement agreement here. Let's start with
[14:04] Speaker 5: that U.S.
[14:05] Speaker 2: Issue.
[14:06] Speaker 5: Is that surprising? How do you get this to be
[14:09] Speaker 5: more of a global type situation? What's your read?
[14:13] Speaker 3: Yeah, I mean, so the elephant in the room of
[14:15] Speaker 3: this whole story, Paul, is that Congress has never been
[14:19] Speaker 3: able to act with respect to regulating social media companies.
[14:24] Speaker 3: Europe has taken a different approach and has been more
[14:29] Speaker 3: aggressive in some respects. And so I do think you
[14:35] Speaker 3: will see, you know, some movement potentially here. Still hard
[14:40] Speaker 3: to say that Congress is going to move significantly on this.
[14:45] Speaker 3: But I do think you'll see individual states and you'll
[14:47] Speaker 3: see countries in the EU make sure that at least
[14:51] Speaker 3: some of these terms in this settlement, some of these
[14:54] Speaker 3: limits on how meta works, serves teens are adopted there
[15:00] Speaker 3: as well. Generally, though, in the EU, the approach has
[15:02] Speaker 3: been different. They don't have the same limitations of the
[15:06] Speaker 3: First Amendment and the Section 230 liability shield that really
[15:09] Speaker 3: protect the social media companies there.
[15:11] Speaker 2: So generally, the EU companies have been much more aggressive.
[15:14] Speaker 3: They've been pursuing bans on allowing teens to use the
[15:18] Speaker 3: service generally. And so it's sort of apples and oranges
[15:22] Speaker 3: in terms of one directly applying to the other.
[15:27] Speaker 9: And the settlement, up to $ 17 billion, you and other
[15:30] Speaker 9: analysts have noted this is something META can easily absorb,
[15:32] Speaker 9: especially since it'll be termed out over 10 years. However,
[15:36] Speaker 9: META still faces legal liabilities, right? I mean, there are
[15:39] Speaker 9: still suits from school districts and individuals who claim harm.
[15:44] Speaker 9: Could those potentially be more damaging?
[15:47] Speaker 3: That's right, Scarlett. So in my view, this was the
[15:50] Speaker 3: big ticket item in this. You know, the state AGs
[15:53] Speaker 3: had a direct path to a recovery. And it's a
[15:57] Speaker 3: bread and butter legal case that the company said one thing,
[16:01] Speaker 3: but it was doing another. And it had a direct
[16:03] Speaker 3: path to civil penalties. The school districts and the individual
[16:08] Speaker 3: plaintiffs have a more difficult legal case in both respects.
[16:12] Speaker 3: Individual teenagers suing have a hard time because it's hard
[16:16] Speaker 3: to file a class action for individual damages. It's hard
[16:20] Speaker 3: to say that everyone across the United States was harmed
[16:24] Speaker 3: in the same way. So judges generally won't do a
[16:26] Speaker 3: class action for damages. School districts also are indirectly harmed.
[16:33] Speaker 3: They're saying their students are harmed, so we should recover
[16:36] Speaker 3: for this. They're bringing claims mostly on a negligence theory
[16:40] Speaker 3: or a public nuisance theory or a product liability theory.
[16:44] Speaker 3: These are all novel in the media space. These are
[16:47] Speaker 3: harder cases to win. They're worth taking seriously. And because
[16:51] Speaker 3: of their scale, there are over 1,200 school districts across
[16:55] Speaker 3: the United States. They're meaningful because they represent a number
[16:58] Speaker 3: of teens, but they're difficult cases to win. Mehta's settlement
[17:02] Speaker 3: yesterday was the big threat in this case.
[17:07] Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
[17:14] Speaker 4: You're listening to the Bloomberg Intelligence Podcast. Catch us live
[17:17] Speaker 4: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
[17:20] Speaker 4: Auto with the Bloomberg Business App. Listen on demand wherever
[17:24] Speaker 4: you get your podcasts or watch us live on YouTube.
[17:28] Speaker 1: All right, let's move on to more earnings.
[17:30] Speaker 9: We ended with some earnings there from Bailey, but we've
[17:33] Speaker 9: also been getting a read on the consumer and the
[17:35] Speaker 9: economy from the dollar chains. And what they're telling us
[17:38] Speaker 9: seems to kind of cover a wide range. Red Brown
[17:42] Speaker 9: is our Bloomberg Consumer Reporter, and he joins us now. So, Red,
[17:45] Speaker 9: what have we learned? I guess what we've.
[17:48] Speaker 11: Learned is kind of more of the same with a
[17:50] Speaker 11: lot of these consumer reports we've been getting through the
[17:53] Speaker 11: earnings season. I think one thing that stood out to
[17:56] Speaker 11: me was during the Dollar General call, CEO mentioned that
[17:59] Speaker 11: they are seeing higher trade-in from middle and high-income people,
[18:04] Speaker 11: which I thought just sort of jumped out to me.
[18:06] Speaker 11: I think that's a question we often have in these
[18:08] Speaker 11: sort of economic... moments like we're having. If people are
[18:11] Speaker 11: feeling pressure, where are they going? And it seems like
[18:14] Speaker 11: Dollar General is one of those places now. So I
[18:16] Speaker 11: think that that's kind of an important thing to kind
[18:18] Speaker 11: of continue to watch. I don't know what it kind
[18:20] Speaker 11: of means, what letter shape the economy becomes if people
[18:25] Speaker 11: from the top part of the K economy are also
[18:27] Speaker 11: trading down as well. But definitely something that we're going
[18:29] Speaker 11: to be keeping an eye on as reports sort of
[18:32] Speaker 11: continue to roll in.
[18:34] Speaker 5: Are Dollar Tree, Dollar General.
[18:37] Speaker 1: Five Below, Dollarama.
[18:39] Speaker 5: Do they differentiate within the marketplace at all, or are
[18:41] Speaker 5: they just, we're all just out there for low price?
[18:44] Speaker 11: Yeah, I mean, obviously, there's a lot of overlap, I think,
[18:46] Speaker 11: with these companies, but they're different companies and have kind
[18:49] Speaker 11: of different strategies. One common thread, I think, across a
[18:53] Speaker 11: lot of them, though, is they have been trying to
[18:54] Speaker 11: introduce some higher cost items, probably more from a margin
[18:58] Speaker 11: perspective for these companies, right? Like, if you're selling a dollar,
[19:02] Speaker 11: only a dollar price thing forever, but inflation in the
[19:05] Speaker 11: supply chain has been going up, you know, yada, yada.
[19:07] Speaker 11: It becomes a little more difficult. So, they've all been
[19:09] Speaker 11: introducing higher-priced items. But when it comes to Dollar General, 80%
[19:14] Speaker 11: of their business, of their revenue actually comes from, more
[19:16] Speaker 11: than 80% comes from consumables. So, it's food and things
[19:18] Speaker 11: like that. And so, that's also a really important part.
[19:21] Speaker 11: And I think that also kind of explains a little
[19:23] Speaker 11: bit of the difference between the results today. Dollar General
[19:25] Speaker 11: did a little bit better than Dollar Tree, which is
[19:26] Speaker 11: around 50% of those consumables.
[19:28] Speaker 1: So people are going to these stores because they need things, right?
[19:33] Speaker 11: So if we're talking about middle and higher income people,
[19:36] Speaker 11: they're not going to buy the trinket as much anymore.
[19:39] Speaker 11: They're very much going to make sure that they can
[19:41] Speaker 11: put food on the table. I think Dollar General's CEO
[19:44] Speaker 11: also kind of talked a little bit about how lower
[19:45] Speaker 11: income people are really stretching, maybe visiting stores. a little
[19:50] Speaker 11: bit more frequently, but doing it in sort of a
[19:52] Speaker 11: lower check oftentimes. So the businesses are very different, but
[19:56] Speaker 11: obviously there are a lot of similar... Sorry, long answer
[19:58] Speaker 11: to your simple question.
[20:00] Speaker 9: So for Dollar General, the dollar stores, even Five Below,
[20:04] Speaker 9: they need to make sure that their supply chain is
[20:07] Speaker 9: intact so that they can continue offering value to their customers,
[20:10] Speaker 9: which means a lot of stuff is imported. And that
[20:13] Speaker 9: means they're affected by tariffs. Have we learned anything new
[20:15] Speaker 9: from them when it comes to the impact of tariffs?
[20:18] Speaker 11: Not necessarily on the impact of tariffs per se, but
[20:20] Speaker 11: they both did raise their earnings guidance because they got
[20:24] Speaker 11: a tariff relief.
[20:24] Speaker 1: But that's a one-time thing, isn't it? Sure, yeah.
[20:27] Speaker 11: I think, obviously, the supply chain issue that it feels
[20:30] Speaker 11: like a lot of us have forgotten from a few
[20:32] Speaker 11: years ago has made a lot of these companies reorganize
[20:34] Speaker 11: and re-evaluate how they hold inventories. So, both these companies
[20:37] Speaker 11: did talk about how they're keeping their inventories lighter and
[20:40] Speaker 11: more agile. So, I think that helps them in a
[20:42] Speaker 11: few different ways, I think, with the supply chain and
[20:44] Speaker 11: making sure that they can shift their where they're getting
[20:47] Speaker 11: and sourcing things from very quickly, but also allows them
[20:52] Speaker 11: to react when consumer needs are changing as well. If
[20:56] Speaker 11: we know that this is a very dynamic economic environment
[20:59] Speaker 11: for the consumer, they're shifting into consumables, need-based things, then
[21:03] Speaker 11: we want to make sure that our stores are very
[21:04] Speaker 11: able to quickly make sure they're stocked with those items
[21:08] Speaker 11: as well.
[21:09] Speaker 4: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
[21:14] Speaker 4: and anywhere else you get your podcasts. Listen live each weekday,
[21:18] Speaker 4: 10 a.m. to noon Eastern on Bloomberg.com, the iHeartRadio app, TuneIn,
[21:23] Speaker 4: and the Bloomberg Business app. You can also watch us
[21:26] Speaker 4: live every weekday on YouTube and always on the Bloomberg Terminal.

Shows are listed from Apple Podcasts' charts and directory, and Podcast Index where it is used. Every show and episode belongs to its publisher and plays from the publisher's own feed; this site hosts none of them.