# Walmart Flags Higher Fuel Costs Eroding Retailer’s Earnings

An episode of [Bloomberg Intelligence](https://invisiblenetwork.ai/podcast/326301337), 21 May 2026, 21 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/ae324c30-e14a-4a78-b295-b45101165ac9/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 -Jennifer Bartashus, Bloomberg Intelligence Senior Analyst, Retail Staples & Packaged Food, recaps Walmart earnings. Walmart warned that fuel costs are squeezing the company’s bottom line and could lead to higher prices for shoppers. The company said comparable sales in US stores rose 4.1%, excluding fuel, in the latest quarter, and forecast adjusted profit for the second quarter that missed analysts’ expectations. -Angelo Zino, Senior Vice President and Equity Analyst, at CFRA Research, recaps Nvidia earnings. Nvidia aims to rely less on giant data center operators and predicts other businesses and governments will become a bigger source of revenue for its chips and computing products to support artificial intelligence ambitions. The company faces growing competition from chipmakers trying to carve out a piece of the AI computing business, and major buyers of Nvidia's technology are developing their own in-house components. -Christopher Ciolino, Bloomberg Intelligence Senior US Machinery Analyst, recaps Deere earnings. Deere shares fell sharply as farm machinery sales stayed sluggish, raising questions on when the agriculture economy will start getting better. The company kept its profit outlook unchanged as it reported fiscal second-quarter results, with net sales in its top segment of production and precision agriculture falling 14% in the second quarter. -Anthony Hughes, Bloomberg US Equity Capital Markets Reporter, discusses the future SpaceX IPO. SpaceX has pulled back the curtain on a business empire with ballooning losses and debt after acquiring a cash-hungry startup and pumping billions of dollars into futuristic endeavors. The company's prospectus filed for an IPO reveals concerns over whether private companies are reaching unjustified valuations, with SpaceX seeking to achieve a $2 trillion valuation from the outset. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. You're listening to the
[0:10] Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
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[0:17] Speaker 1: Business App. Listen on demand wherever you get your podcasts,
[0:21] Speaker 1: or watch us live on YouTube.
[0:23] Speaker 2: Walmart coming out with its latest earnings report.
[0:26] Speaker 3: Jen bartashis it's our senior analyst who covers retail staples
[0:29] Speaker 3: and packaged food, and Jen, I'm really interested in the
[0:32] Speaker 3: interplay between oil prices and Walmart's sales. In particular, we
[0:37] Speaker 3: know that fuel costs are definitely squeezing Walmart's consumers, yet
[0:42] Speaker 3: Walmart says that it has managed to absorb almost all
[0:44] Speaker 3: of the fuel increase.
[0:47] Speaker 4: Yeah, it's an interesting dynamic when you look at it.
[0:50] Speaker 4: You know, Walmart has really done a good job of
[0:52] Speaker 4: shifting their business mix, which really gives them a little
[0:55] Speaker 4: bit more flexibility and how they can offset unexpected high
[0:59] Speaker 4: costs like we're seeing right now with fuel. The consumer
[1:02] Speaker 4: for Walmart is certainly anybody in the lower end of
[1:05] Speaker 4: the consumer spectrum is under some pressure that does get
[1:08] Speaker 4: amplified when gas prices are higher, and so we see that,
[1:12] Speaker 4: but at the same time, what it does is it
[1:14] Speaker 4: does reinforce value focused shopping, which is really Walmart's wheelhouse.
[1:20] Speaker 4: And so the almost it's almost an odd situation where
[1:25] Speaker 4: the more stress the consumer is, the more likely Walmart
[1:29] Speaker 4: is to be able to serve those customers. Not that
[1:32] Speaker 4: you want that to be a never ending cycle, but
[1:35] Speaker 4: it is something that is that is out there. You know,
[1:37] Speaker 4: Walmart is actually they do sell fuel as well, and
[1:41] Speaker 4: so you know, obviously higher fuel prices does feed their
[1:44] Speaker 4: top line to a degree, especially for Sam's Club. But
[1:48] Speaker 4: it is a dynamic that we're going to have to
[1:50] Speaker 4: watch closely over the next couple months.
[1:53] Speaker 5: Talk to us about their e commerce business. Every quarter,
[1:56] Speaker 5: I see this revenue growth from digital and I guess
[1:58] Speaker 5: this core is a twenty one percent.
[2:00] Speaker 6: It is extraordinary. How how are they doing that?
[2:05] Speaker 4: Yeah, their e commerce business is really flourishing. And to
[2:09] Speaker 4: your point, Paul, it's been multiple I mean, it's just
[2:12] Speaker 4: on a string of double digit, high twenty percent, mid
[2:16] Speaker 4: twenty percent growth every quarter. And really what's happening is
[2:19] Speaker 4: you're seeing a big expansion of their marketplace. So you've
[2:23] Speaker 4: got more sellers coming into the marketplace, more shoppers buying
[2:27] Speaker 4: on the wall on the on the marketplace, and that's
[2:29] Speaker 4: then feeding you know, ad revenue, it's feeding other types
[2:33] Speaker 4: of revenue for the company, and so it's become this
[2:37] Speaker 4: virtuous cycle where the more they're putting into it, the
[2:40] Speaker 4: more people are responding, and the healthier that business becomes.
[2:44] Speaker 7: You know.
[2:44] Speaker 4: Walmart has has already said that their e commerce business
[2:47] Speaker 4: is now profitable, which is really you know great, and
[2:51] Speaker 4: it's also fuel to that to that growth where they
[2:55] Speaker 4: can reinvest more easily because they are you know, finding
[2:59] Speaker 4: it to be a profitable business now. And you can't
[3:01] Speaker 4: discount things like Walmart Plus, which is their membership program.
[3:05] Speaker 4: Their membership for income growth was astounding this quarter. They
[3:09] Speaker 4: said they had a record number of new net ads
[3:12] Speaker 4: for Walmart Plus this quarter, you know, and a lot
[3:15] Speaker 4: of Walmart Plus benefits are centered around e commerce and
[3:18] Speaker 4: so whether you're placing orders for delivery to your house,
[3:21] Speaker 4: whether it's for ship to your home, all of that
[3:24] Speaker 4: is contributing to that e commerce success.
[3:26] Speaker 3: Yeah, their Walmart Plus has a partnership with American Express Platinum,
[3:31] Speaker 3: and I think that has well. I signed up for
[3:34] Speaker 3: the AMX Platinum card and I'm very well versed on
[3:38] Speaker 3: all the different benefits, and this is one of the
[3:40] Speaker 3: benefits to you know, steal market share away from Amazon.
[3:44] Speaker 3: Do we have any sense of how well that effort
[3:47] Speaker 3: is going Walmart Plus versus Amazon.
[3:52] Speaker 4: We we you know, obviously Walmart does not disclose anything
[3:55] Speaker 4: about Walmart Plus, but when we look at our when
[3:57] Speaker 4: we do our analysis, you know, we see, you know,
[4:00] Speaker 4: millions and millions of households have now joined Walmart Plus
[4:03] Speaker 4: and the frequency of shop is really increasing. You know.
[4:06] Speaker 4: For a long time, you know, Walmart had a hard
[4:09] Speaker 4: time displacing Amazon because people's first inclination when they wanted
[4:13] Speaker 4: to look for something was to go to Amazon dot Com.
[4:15] Speaker 4: And that mentality is slowly shifting, and in part it's
[4:18] Speaker 4: due to these these types of memberships like Walmart Plus.
[4:22] Speaker 4: So you know, when we estimate the number of households,
[4:25] Speaker 4: you know, it's continuing to grow. The revenue generated from
[4:29] Speaker 4: that is just changing the entire profit mix for Walmart.
[4:32] Speaker 4: And most importantly, this is what helps keep higher income
[4:36] Speaker 4: households in particular sticky with Walmart as the economy starts
[4:40] Speaker 4: to improve, because once you're in that ecosystem and you
[4:43] Speaker 4: get used to the quick delivery and the ease of
[4:46] Speaker 4: ordering online, you know, especially for things that you order
[4:50] Speaker 4: with frequency, that makes you very sticky within Walmart, and
[4:54] Speaker 4: that really bodes well for just their ability to keep
[4:57] Speaker 4: those customers long term.
[4:59] Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
[5:05] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us Live
[5:09] Speaker 1: weekdays at ten am. He's done on Apple, Cocklay and
[5:12] Speaker 1: Android Auto with the Bloomberg Business app. Listen on demand
[5:15] Speaker 1: wherever you get your podcasts, or watch us live on YouTube.
[5:20] Speaker 3: You mentioned in Nvidia down and Video was the big
[5:22] Speaker 3: earnings report that we were waiting for, Ye, Paul, And
[5:26] Speaker 3: I think everyone's just gotten so used to this chip
[5:28] Speaker 3: maker blowing out expectations and coming in with these great
[5:33] Speaker 3: statements of demand, limitless demand, seemingly, and the market's reaction
[5:38] Speaker 3: is like, Eh, whatever.
[5:39] Speaker 5: Yeah, they've beaten rays and they've been so good for
[5:42] Speaker 5: so long, surpassing expectations of the street. But it's if
[5:45] Speaker 5: nothing else, that's a law of large numbers.
[5:47] Speaker 6: Maybe a little bit of competition as well.
[5:48] Speaker 4: All right.
[5:49] Speaker 3: Angelo Zeno is our senior vice president and equity analysts
[5:51] Speaker 3: at cfr A Research. He joins us now through zoom
[5:55] Speaker 3: Angelo we're looking at in Vidia shares now lower by
[5:58] Speaker 3: almost two percent.
[6:01] Speaker 2: Is there anything objectionable in the set of results.
[6:05] Speaker 7: No, I mean, you know, I thought it was overall
[6:07] Speaker 7: fairly clean type of number.
[6:09] Speaker 3: You know.
[6:10] Speaker 7: Maybe the only thing that you know, maybe wasn't as
[6:12] Speaker 7: clean was the fact that they did, you know, shift
[6:14] Speaker 7: their business segments around a little bit. But I think
[6:16] Speaker 7: that would was to be to expected. I mean, it
[6:19] Speaker 7: was one of those situations where when you kind of
[6:21] Speaker 7: looked at everything outside of data centers, it was just
[6:23] Speaker 7: such a small part of their revenue. Whether we talk
[6:26] Speaker 7: about you know, autos that are about one percent of sales
[6:28] Speaker 7: that are kind of you know, whatever. Else, even gaming,
[6:31] Speaker 7: which was once their largest business, was only you know,
[6:34] Speaker 7: mid single digit percentage of their sales. So kind of
[6:36] Speaker 7: changing the way they kind of segmented and broke their
[6:39] Speaker 7: revenue down I think makes a lot of sense. But
[6:42] Speaker 7: when you kind of look up overall from the results here,
[6:44] Speaker 7: I mean, it was it was a solid beat and
[6:46] Speaker 7: raised quarter, as Nvidia has done here over the last
[6:49] Speaker 7: couple of quarters. You're getting a little bit of a
[6:51] Speaker 7: selling news, which is, you know, typically what you've seen
[6:54] Speaker 7: here from in Vidio stock, which is now a stock
[6:56] Speaker 7: trating about eighteen times our expectations for twenty twenty seven.
[7:00] Speaker 7: And when investors really want to hear and see long term,
[7:03] Speaker 7: I mean, what the answer to is the sustainability of
[7:05] Speaker 7: this stuff, right, And Nvidia can be as optimistic as
[7:09] Speaker 7: they want looking out through the end of the decade,
[7:11] Speaker 7: but investors are going to continue to be somewhat cautious
[7:14] Speaker 7: in that outlook.
[7:15] Speaker 5: Talk to us about customers, Angelo, you know, they talked
[7:21] Speaker 5: about maybe governments and other entities becoming big big customers.
[7:26] Speaker 5: Talked to us about that in the development of that
[7:27] Speaker 5: part of the business.
[7:29] Speaker 7: Yeah, I mean so in kind of breaking down this revenue,
[7:32] Speaker 7: essentially they within data centers, which is what ninety two
[7:35] Speaker 7: percent of their revenue at this point in time, you're
[7:37] Speaker 7: looking at about half of that or essentially exactly half
[7:40] Speaker 7: of it coming from the hyper scalers. And we know
[7:42] Speaker 7: what the hyperscalers are all doing. We're looking at near
[7:45] Speaker 7: doubling in terms of hyperscaler CAPEC spend here this year.
[7:49] Speaker 7: And it's one of those situations where you know, of
[7:52] Speaker 7: course those growth rates are going to decelerate over time.
[7:54] Speaker 7: So I think it was smart for Nvidia at this
[7:57] Speaker 7: point in time to show now that breakdown in terms
[7:59] Speaker 7: of what else is out there in terms of to
[8:02] Speaker 7: your point, the sovereign AI opportunities, potentially what the neo
[8:06] Speaker 7: clouds have to offer, which is also in that other
[8:09] Speaker 7: half of the bucket there where you could potentially see
[8:13] Speaker 7: let's call it stronger capex spend at least on a
[8:16] Speaker 7: relative basis here longer term, because there's a bigger or
[8:20] Speaker 7: a larger number of participants in that basket, right, So
[8:25] Speaker 7: you've got the potential for that to be a bigger
[8:27] Speaker 7: percentage of their total revenue here as we kind of
[8:30] Speaker 7: look out two to three years from now. I think
[8:32] Speaker 7: that's at least their expectation, and I think if you
[8:35] Speaker 7: start seeing that, I think investors will reward that. So again,
[8:39] Speaker 7: it's one of those situations stop creating about eighteen times
[8:41] Speaker 7: in night Peer's earnings. But if we see kind of
[8:43] Speaker 7: maybe a more favorable mix outside of Hyperscalerton, I think
[8:46] Speaker 7: that could be a good thing, especially since when you
[8:48] Speaker 7: think about who really plays and sells these AI based
[8:52] Speaker 7: servers outside of the hyperscalers, it really is largely Intel.
[8:56] Speaker 2: I'm sorry, Nvidia, gotcha Angela b be where we let
[9:00] Speaker 2: you go.
[9:00] Speaker 3: I got to ask about the return of cash, because
[9:03] Speaker 3: the CFO says they plan to return fifty percent of
[9:05] Speaker 3: their free cash fload. This year, they announced an eighty
[9:08] Speaker 3: billion dollar stock buyback plan, boosted their quarterly dividend to
[9:11] Speaker 3: twenty five cents a share. Does this attract a new
[9:14] Speaker 3: crowd of investors, a new group of investors or is
[9:17] Speaker 3: this largely built into expectations?
[9:20] Speaker 7: I think it's a little bit built in, but I
[9:22] Speaker 7: think it's a good thing to say. I mean, we're
[9:24] Speaker 7: looking at them, probably they're probably going to return at
[9:26] Speaker 7: least one hundred billion, we think in back to shareholders
[9:30] Speaker 7: here over the next twelve months. And the only other
[9:32] Speaker 7: company that is anywhere near that is Apple at this
[9:35] Speaker 7: point in time, especially when you start looking at all
[9:37] Speaker 7: the hyperscalers out there, Essentially all of them have kind
[9:40] Speaker 7: of refrained at this point from buying back shares right
[9:44] Speaker 7: and increasing dividends significantly because of what they're devoting towards
[9:48] Speaker 7: the capex spent. So that's all that money now is
[9:51] Speaker 7: going into Nvidia. They can return that cash to shareholders,
[9:54] Speaker 7: and I think that is somewhat enticing to investors at
[9:57] Speaker 7: this point in time. So we like the move, and
[9:59] Speaker 7: we think, especially as growth rates start to disell right
[10:01] Speaker 7: here over the next two to three years, I think
[10:03] Speaker 7: that's going to probably become a bigger part of the
[10:05] Speaker 7: conversation for investors.
[10:08] Speaker 6: Stay with us. More from Bloomberg Intelligence coming up after this.
[10:15] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us Live
[10:18] Speaker 1: weekdays at ten am easterne on Apple Cocklay and Android
[10:22] Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
[10:25] Speaker 1: you get your podcasts, or watch us live on YouTube.
[10:29] Speaker 3: All right, Deer reported earnings as well. It's a real
[10:31] Speaker 3: grab bag towards the end of earning season. You've got retailers,
[10:34] Speaker 3: You've got farm machinery makers, and video. Yeah, I know,
[10:38] Speaker 3: and video is just kind of out of sync with
[10:40] Speaker 3: the rest of the mag seven names. But Deer shares
[10:42] Speaker 3: are slumping down about eight percent right now. Let's bring
[10:45] Speaker 3: in christ Ciolino. He is our senior US machinery analyst
[10:48] Speaker 3: to recap what we learned here from the tractor maker
[10:52] Speaker 3: and I guess it comes down to the farm economy
[10:54] Speaker 3: is struggling, and so therefore we're seeing that reflected in
[10:57] Speaker 3: Deer's results.
[11:00] Speaker 6: I mean, that's part of it.
[11:01] Speaker 8: The headline coming out of the quarter was that they
[11:03] Speaker 8: had a big beat, but really, if you unpack that,
[11:06] Speaker 8: a lot of that was driven by this AIPA tariff
[11:09] Speaker 8: refund that they got. If you kind of peel back
[11:12] Speaker 8: the onion here, their construction business actually continues to perform
[11:16] Speaker 8: quite well, really good top line and margin performance there,
[11:20] Speaker 8: and the orders continue to progress nicely and small agen
[11:25] Speaker 8: turf was good as well. But the weakness on the
[11:27] Speaker 8: largeag side continues to be a problem for them, and
[11:31] Speaker 8: really it doesn't really kind of show any signs of
[11:33] Speaker 8: abating as we look through the balance of this year.
[11:36] Speaker 8: You have the higher input costs, weak farm fundamentals, so
[11:40] Speaker 8: still a very challenging setup as we look here in
[11:43] Speaker 8: the near term.
[11:44] Speaker 5: Chris, just by my recognition, dere's the first company that
[11:47] Speaker 5: I can think of that calls out this tariff rebate.
[11:51] Speaker 5: Can you explain, So what's the company disclosing about this?
[11:54] Speaker 5: How long did it take to get this rebate? Was
[11:57] Speaker 5: it everything they were looking for? What are they doing
[11:59] Speaker 5: with this rebate? Yeah?
[12:01] Speaker 8: So, interestingly enough, I think they're the second or third
[12:04] Speaker 8: company at least in my universe that has actually called
[12:07] Speaker 8: out this this refund claim. It was roughly two hundred
[12:12] Speaker 8: seventy two million dollars here in the quarter, so we
[12:15] Speaker 8: think it contributed you know, roughly seventy five cents in
[12:19] Speaker 8: the quarter. If you look at their gross tariff impact
[12:23] Speaker 8: for the year, so they were anticipating about one point
[12:25] Speaker 8: two billion dollar impact for fiscal twenty twenty six. That
[12:30] Speaker 8: gross number really hasn't changed once you take away some
[12:33] Speaker 8: of the AIPA and you add back some of the
[12:35] Speaker 8: Section one twenty two's and some of the other incremental
[12:38] Speaker 8: tariff costs. Net that hasn't changed. Now you have this refund,
[12:43] Speaker 8: So when you look on a net basis, it's somewhere
[12:46] Speaker 8: going to shake out in the nine hundred million dollar range.
[12:50] Speaker 8: This is relatively new for the machinery guys. I would
[12:54] Speaker 8: anticipate we may hear similar from other companies next quarter,
[12:59] Speaker 8: but deer being you know, a little bit of off
[13:00] Speaker 8: cycle of their fiscal quarter, I would anticipate we'll begin
[13:04] Speaker 8: to hear more of these moving forward.
[13:06] Speaker 3: Okay, well, I mean either way, it's going to take
[13:08] Speaker 3: a while for this to all get resolved.
[13:10] Speaker 2: What we've seen with other.
[13:12] Speaker 3: Heavy machinery makers, including Caterpillar, is that the boom and
[13:15] Speaker 3: AI has benefited them as well.
[13:19] Speaker 2: Does Deer fit into that categories too.
[13:22] Speaker 8: It's a stretch, right, so it does help on the
[13:25] Speaker 8: construction business, particularly during the early phases of any construction,
[13:30] Speaker 8: whether it's excavation, anything with moving dirt. Deer has a
[13:35] Speaker 8: strong and really growing position in construction equipment. And I
[13:38] Speaker 8: think that's one of the big takeaways from this quarter
[13:41] Speaker 8: is that construction results were very strong, the orders again
[13:45] Speaker 8: very strong. There seems to be increasing visibility in terms
[13:49] Speaker 8: of projects as we move into next year, so I
[13:53] Speaker 8: think that has helped support the weakness that we're seeing
[13:56] Speaker 8: on the AX side. They've introduced a whole new excavator lineup,
[13:59] Speaker 8: a lot of new technology and innovations coming through on
[14:03] Speaker 8: the construction side. So if we look at machinery earnings
[14:06] Speaker 8: overall this season, i'd say construction continues to be one
[14:09] Speaker 8: of the biggest bright spots.
[14:11] Speaker 6: How's the US farmer doing out there.
[14:13] Speaker 8: Chris, You know, it's tough. Continues to be tough. I
[14:18] Speaker 8: sound like a little bit of a broken record with
[14:20] Speaker 8: this seems to be a recurring theme here over the
[14:22] Speaker 8: past two years. Listen. I do think that twenty twenty
[14:27] Speaker 8: six will still mark the trough of the cycle. And
[14:30] Speaker 8: I do think that's important. The debate really now becomes
[14:32] Speaker 8: around what the trajectory of recovery looks like. Our sense
[14:36] Speaker 8: is that it's going to be a much more measured
[14:38] Speaker 8: recovery as we look into twenty seven, and really, you know,
[14:42] Speaker 8: a lot kind of hinges on what happens here in
[14:44] Speaker 8: the Middle East. How soon do maybe some of these
[14:47] Speaker 8: fertilizer and input costs begin to come down. Yes, we've
[14:50] Speaker 8: seen a little bit of a pickup and crop prices,
[14:52] Speaker 8: so that helps to a degree, but we need clarity
[14:56] Speaker 8: in terms of some of the input costs again, particularly
[14:59] Speaker 8: on the first side, as well as what's going to
[15:02] Speaker 8: happen in terms of export markets and some of these
[15:04] Speaker 8: trade relationships and to see how those materialize. So we
[15:10] Speaker 8: have a much more cautious view in terms of a
[15:12] Speaker 8: sickle cold recovery as we look into twenty seven.
[15:15] Speaker 6: Stay with us more from Bloomberg Intelligence coming up after this.
[15:22] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[15:26] Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
[15:29] Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever
[15:33] Speaker 1: you get your podcasts, or watch us live on YouTube.
[15:37] Speaker 5: Man It is good to be an equity capital markets
[15:40] Speaker 5: reporter these days. Lots going on at there. Scarlet Ful
[15:43] Speaker 5: and Paul Soony live here in our Bloomberg Inactor Broker studio,
[15:45] Speaker 5: streaming live on YouTube as well.
[15:47] Speaker 6: Anthony Hughes is that equity market's.
[15:49] Speaker 5: Capital reporter for Bloomberg News, joining us here in studio, Anthony.
[15:54] Speaker 5: The SpaceX I S one was filed yesterday or dropped,
[15:58] Speaker 5: as the kids would say. Tom Keen had the notable
[16:02] Speaker 5: very Keen observation. There's a lot of pictures, a lot
[16:04] Speaker 5: of photographs in this perspectives you don't typically see that.
[16:08] Speaker 5: Did you take note of that?
[16:10] Speaker 9: Yeah, there was definitely a few interesting pictures. I think
[16:12] Speaker 9: the first four or five pages were rockets flying into
[16:16] Speaker 9: the air, which is quite an evocative, Yeah picture, evocative
[16:19] Speaker 9: thing for an IPO and perhaps people who don't you know,
[16:23] Speaker 9: not you don't want to read the whole document, we'll
[16:25] Speaker 9: just have a look at those pictures and get excited.
[16:27] Speaker 9: So that's one possibility. But there's also a rendering I
[16:30] Speaker 9: think of life on Mars, which I thought was quite
[16:32] Speaker 9: interesting as well.
[16:33] Speaker 5: Yeah, yep, So there's a lot there, and then you
[16:35] Speaker 5: get to the nitty gritty. I noticed, first of all,
[16:38] Speaker 5: risk factors section are solid thirty eight pages, so I
[16:43] Speaker 5: mean that takes you. I mean I used to pop
[16:45] Speaker 5: out perspectus as that were thirty eight pages, and now
[16:47] Speaker 5: you got the risk factors here.
[16:48] Speaker 6: What was your takeaway from this filing here?
[16:51] Speaker 9: Well, I think that there's already been so much written
[16:55] Speaker 9: about this in a lot of height, but you actually
[16:57] Speaker 9: read some of the statements in about how much of
[17:03] Speaker 9: you know, how much of the you know, how many
[17:06] Speaker 9: projects that SpaceX has that could provide the growth for
[17:10] Speaker 9: the future. I mean, it's quite phenomenal, and you know,
[17:13] Speaker 9: people obviously really have to believe in those two get
[17:16] Speaker 9: excited about this story. But you know, there's one section
[17:19] Speaker 9: there which is just about the growth strategies of the company,
[17:21] Speaker 9: and it lists out what they're doing in the space
[17:24] Speaker 9: launch business, which is about growing the payload capacity of
[17:27] Speaker 9: the rockets, and they're having they've got the rocket launch
[17:29] Speaker 9: today of Starship. There's in the starlink business, which is
[17:33] Speaker 9: which is the one that's doing the best in many ways.
[17:36] Speaker 9: They're they're looking to build out a mobile mobile phone
[17:39] Speaker 9: network there and then, but the really interesting one is
[17:42] Speaker 9: on the AAI side, they're obviously looking to substantially expand
[17:49] Speaker 9: the amount of compute there and obviously put data centers
[17:51] Speaker 9: in space, but and then some of those projects in space,
[17:54] Speaker 9: the really long term stuff is quite amazing around, you know,
[17:58] Speaker 9: putting a civil as I mentionedalization on Mars, but also
[18:02] Speaker 9: building a lunar economy and asteroid mining was one.
[18:06] Speaker 3: I think.
[18:06] Speaker 9: They also talked about space tourism and what they call
[18:09] Speaker 9: point to point to terrestrial flights as well, which is
[18:13] Speaker 9: like basically a spaceship replacing an airline and getting you
[18:17] Speaker 9: across the world much quicker, which is kind of an
[18:18] Speaker 9: interesting is an interesting concept. But you know, I think
[18:21] Speaker 9: to your point about the risk, space has always had
[18:25] Speaker 9: a huge amount of risks, So you know, people might
[18:28] Speaker 9: with so much hype around this IPO, people might forget
[18:30] Speaker 9: that space is very risky endeavor.
[18:33] Speaker 5: I like they start off strong in this perspective summary.
[18:36] Speaker 5: Our mission is to build the systems and technology is
[18:40] Speaker 5: necessary to make life multiplanetary, to understand the true nature
[18:44] Speaker 5: of the universe, and to extend the late of consciousness
[18:48] Speaker 5: to the stars.
[18:49] Speaker 6: That's a solid sentence. Only to find a person who
[18:51] Speaker 6: wrote that one. Yes, yes, that's not an investment banker
[18:54] Speaker 6: right now, one, I don't think.
[18:55] Speaker 8: Yeah.
[18:56] Speaker 9: I think a few people were commenting that some of
[18:57] Speaker 9: the prospectives might have been written by AI, even I'm
[19:00] Speaker 9: not sure whether AI is that creative, but yeah, I
[19:03] Speaker 9: mean there's also a section of the prospectus which talks
[19:05] Speaker 9: about the TAM or the total addressable market, and they
[19:07] Speaker 9: say it's the largest in human history, and interestingly that
[19:12] Speaker 9: I think it's a twenty seven to twenty eight trillion
[19:13] Speaker 9: dollar TAM, and interestingly the largest easily a large large
[19:18] Speaker 9: proportion of that is actually AI. So, you know, I
[19:20] Speaker 9: think a lot of people's initial reaction maybe once they've
[19:22] Speaker 9: read a bit more of the fine print about this company,
[19:24] Speaker 9: are we really investing in more of an AI story
[19:26] Speaker 9: here than a Space story? And the answer is, well,
[19:29] Speaker 9: it may be that as we're looking to really scale
[19:31] Speaker 9: up the revenue and sort of justify this two trillion
[19:33] Speaker 9: dollar valuation, which at the moment looks pretty far fetched,
[19:38] Speaker 9: maybe there is a lot of revenue coming through AI
[19:41] Speaker 9: in the next few years. Particularly they've got this deal
[19:43] Speaker 9: with Anthropic and that is going to add a bit
[19:45] Speaker 9: to revenue, So maybe you can see the revenue scale
[19:48] Speaker 9: up a bit. Still, still you want to see it
[19:49] Speaker 9: scale up a lot to justify this valuation.
[19:52] Speaker 6: That's what I say.
[19:52] Speaker 5: All right, So, do we know anything about any type
[19:55] Speaker 5: of roadshow that the company and its advisors will go on.
[19:58] Speaker 9: Yeah, so I mean, like in the IPO, there'll be
[20:00] Speaker 9: a road show, and at the moment we think it's
[20:03] Speaker 9: going to start on June four, so fifteen days.
[20:07] Speaker 6: From the filing, and then.
[20:09] Speaker 9: We could see the IPO potentially price on June eleven,
[20:15] Speaker 9: is the current speculation. Then you'd have on that Friday,
[20:17] Speaker 9: which is the twelfth, you'd see the stop start trading.
[20:19] Speaker 9: But obviously in the next few weeks we would actually
[20:23] Speaker 9: see evaluation in the price range, which would be give
[20:25] Speaker 9: us a much better idea of like whether this is
[20:28] Speaker 9: going to be a good investment or not. But obviously
[20:30] Speaker 9: a bunch of hype and a lot of people are
[20:31] Speaker 9: interested in them.
[20:32] Speaker 5: Presumably they'll be a video publicly available with kind of
[20:36] Speaker 5: the road show presentation.
[20:37] Speaker 6: Yeah.
[20:37] Speaker 9: So typically there's a retail road show that's publicly available,
[20:40] Speaker 9: and then there's an institutional roadshow as well, which is
[20:43] Speaker 9: more you know, may include brought it brought more information,
[20:48] Speaker 9: but the retail road show would be something would be
[20:51] Speaker 9: publicly available.
[20:53] Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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