Selling the rest of his shares. What is next for him and the company . Regulation, legal and legislative hurdles continue, especially for overseas apps. We will hear from senator Marsha Blackburn on how much more needs to be done. First, our top story, and a lot of Market Action on thursday, specifically in the tech sector. The nasdaq closed above 9000. It has returned more than 35 the tech sector has now returned more than 35 this year and is on track for its best year since 2013. One of the best performers has been apple. On a point basis, apple is one of the best performers in the s p 500. It has outperformed on a percentage basis. Another high, another day, another record at tesla, 430 a closing out at 430 a share. Tesla and elon musk have defied the shorts in the last few months and we will have more on teslas record coming up. First, i want to look at the 2019 story of uber. The Ridesharing Company went public in the spring, but has faced a barrage of legal hurdles. Some battles were fought over its International Expansion plans, with london stripping the company of its license. Another issue, whether drivers are contract workers or employees entitled to benefits. This week, we covered the man who cofounded the company, travis kalanick, and his desire to leave it all in the rearview mirror. We reported tuesday that kalanick is stepping down from ubers board and has sold all of his remaining uber shares. He was ousted as ceo in 2017 following months of chaos and controversy. Danmore, i want to bring in ives and our Technology Senior executive editor, brad stone. Does this help simplify it all . I dont think so. It does not simplify things anymore than 2017 when travis was ousted from the ceo spot, went to the board. I guess he was the largest shareholder and he was on the board but focused on his new company, cloud kitchen. He started selling the stock in early november after the postipo block expired. This is a little bit of a sort of slow moving divorce. From what i hear, traviss voice was not all that loud, so it codifies things already underway. Taylor dan, do you agree . Did anything change for you on tuesday on this announcement . It ended a dark chapter. He sells them 3 billion worth of shares. It has been an overhang on the stock. It would be awkward if he remained on the board. It speaks to uber being a train wreck since the ipo. This is the final chapter. Now for investors, the hope is optimism going into 2020, but there is a lot of pressure. There is a fork in the road situation. When you look at uber, that is the issue right now. Look at what look at some of the issues they have faced. I think right now there are a lot of worries going into 2020. Taylor brad, you are nodding your head. What are some of the issues they will be facing . One issue is profitability. This is a company that is still losing billions of dollars. It is 12 years old. Its core market, ridesharing in north america growth has slowed, so investors want to see growth in the newer geographies, also uber eats. Growth20 of ubers bookings. The question is can it keep growing. The ceo has put a stake in the ground, profitability is around the corner, but investors want to see it get there. Taylor investors do want to see it. If you want to look at a chart im showing inside my terminal, uber and lyft, both down now 30 since the ipo. Uber has been on an uptrend early to mid december. Dan, in your case, what is the bullish thesis for uber . Mean, for uber right now, you look at underlying growth not just drivers, but user penetration, today, the opportunity to monetize that going forward. If you look at growth and profitability in 2021, and if you look at uber eats, i see an eight dollar to 10 overhang on the stock. The question right now for uber is, do they cut that business or significantly get to a point of profitability, because it has been an anchor on the ship. Its the some of their parts. Of their parts. Investors right now, it continues to be a heartburn situation because of execution, overhang, i think as well as just miscommunication with the street. It has been that trifecta. Taylor brad, we were talking about uber eats, and if i want full circle and tie this to travis kalanick, we were talking about cloud kitchen. Where do we think kalanick might be headed next . Its funny, because he has really this company that could be a partner with uber. It is this virtual restaurant idea. You can start these kitchens, at these kitchens, lease the space to restaurants, and fulfill online delivery. You cant walk in and get a table. They are purely for the online business. An uber eats. Elp o uber eats also works with doordash, and travis has been hiring former uber employees and uber has gotten upset about that. Clearly, this could be an accelerant to the uber eats business, but they could find themselves working with and helping ubers competitors. Taylor dan, i spoke with mark mahaney of rbc this week, and top pick for 2020. He calls it peak regulatory fear, where there is so much fear about regulation, and he said it is overblown. What are your thoughts on regulation overhang on uber . Look, a ton of respect for mark and his call on uber. I am with him in terms of how stocks riskreward into 2020 but the big issue, the black cloud, that could be the gut punch to the business model, the gig economy, as well as uber. It needs to be resolved in sacramento. The broader worry for investors that i speak with, its not just california, but how about other states and other countries . Look at london, which continues to be an issue. I think regulatory, no doubt, is an overhang, but uber need to handhold much better rather than the disaster story we have seen over the last six months. Taylor dan, finally here, can you distinguish between uber and lyft, they are both ridesharing, but can you pick one over the other . I think lyft has a better shot of working in the near term. Domestic, which is the key. No overhang from the food delivery piece, which is important. I think it is more of a pure play, less regulatory issues. I think in the near term, its going to be easier for lyft to work than uber. I think both names work, but i think it will be an uphill battle for uber in the near term given the broader regulatory issues, especially london front and center. That is a focus for investors. Taylor Bloomberg Technologys brad stone, thank you for joining us. Dan ives, you are sticking , youank you dan ives are sticking around. Amazon said it had a record holiday season. The online giant said billions of items shipped and devices like the echo dot sold. The number of items delivered with same day shipping quadrupled compared to last holiday season. Coming up, tesla shares trading at an alltime high. Wedbush raising its price target on the stock from 100 to 370 this morning. We will bring you the latest. If you like bloomberg news, check us out on the radio come the bloomberg app, bloomberg. Com, and in the u. S. On sirius xm. This is bloomberg. Taylor tesla shares trading at an alltime high, up 1100 since up more than 1100 since going public in 2010. According to wedbush analyst dan ives, the turnaround in the stock is looking more credible. He raised his price target to 370 from 270. Take a look at this chart im showing in my terminal. At 370, you are higher than the median average estimate of the street, which is 296. But frankly, the stock has run ahead. What do you see as your bull thesis . Now, ifk, i think right the last six at months, it has been massively impressive what they have been able to do in terms of turning this around for demand and profitability. I view the stock as a base and bull case, so base case, 370. Bull case, 580 to 600. If theyre able to execute in this china thesis, the upward trajectory in terms of demand, you can see it the stock go much higher. This gets us to a base case. Bull case, 580 to 600. I thinko 600, and i think a love that really rests on china. To ar dan, ive spoken few neutral bearish analysts who are concerned about demand in china. Do you have any sense of what could be a bear case if something were to happen, may be the economy starts to slow . What do you need to happen for you to turn more bearish . Dan in terms of work on the ground in asia, and overall demand, how quick could you get to 100,000 units in china . Could that be quicker than the u. S. Or europe . If the answer is yes, then this then i think this is something that really could take the story to the next level. In terms of the bear thesis, ultimately, you hit some sort of regulatory road block in china giga three hits a snag, or , you have competition that slows down the underlying demand story in china. That would be the bear thesis. Some have been skeptical, as you and me have talked about many times over the last six months. Elon musk has proved things over the last few quarters. Stocks had a parabolic short squeeze, but china is the next leg of the growth story. Taylor so much of the bull thesis relies on demand for the model three. That is the least profitable of all the models. Demand point do you need to shift to the more profitable models . Dan when you look at s and x, demand has started to tail off. What has been key to the tesla bull thesis and the stock going from 300 to now 430, it is really profitability. They have done a great job getting profitability on core model three and what that trajectory looks like. But i do agree, you need to see. It is really software and sort of upticks within the actual versions. You need to see that Software Version from selfdriving to others, thats an extra 5,000, 7,000, 10,000 per car. That is all profits that go to the bottom line, so that is the key, the Gross Margins story for tesla over the coming quarters. Taylor dan, come and take a look at a chart im looking at in my terminal. They had a big surprise profit last quarter. They are cutting their way towards profit. Is that sustainable in 2020 . , that isink right now why we are still waiting. The rubber does meet the road. It will be tough to cut their way to profitability on that trajectory, especially juggling with china,lls insurance, robo taxis, others. Thats why the next few quarters, this is a stock that hits a speedbump in the bears come out of hibernation mode and here we go again or taylor sorry to cut you off. When does tesla need to tap the Capital Markets again . Dan well, as of right now, if they could stay profitable, they dont need to tap the Capital Markets. If they hit a speedbump, you go into the red ink, 2021, you could start to hit Capital Markets. That has been the huge overhang on the stock. Many investors say how come it has had such a huge run . Now with the profitability in demand, it doesnt look like they have to Access Capital after accessing it earlier this year. That is the key to the stock. Taylor who is the competition . Dan competition, many far and ine, if you look not just the u. S. , as well as internationally. I think front and center really is going to be in europe, in terms of when you look at the competition they are seeing, does it impact them, especially countries like norway. There is one key competitor. Right now there is a moat. Does it hit them in terms of demand . I dont think you will see that until q1 and q2. That is why the tesla bulls feel there is fuel in the tank. We are still wait and see, but no doubt, the fundamental story has changed over the last six months. Taylor dan ives of wedbush, you are staying with us, because up next, we are going to go through your research on what to expect from big tech in 2020. This is bloomberg. Taylor we are back with dan ives of wedbush. Hes an analyst. I want to look forward to 2020. You know more than anybody else. It would not be a day of technology if we did not mention apple. Here, thanks to you, and what we get more street highs. Now 350 a share. Take a look at this chart in my terminal. That is well above the median analyst and where the company is treating now, so why 350 . Dan it is a continuation of our thesis playing out this year into next year in terms of the super cycle. It really comes down to the math, 900 million iphones worldwide. Those, 350 million have not upgraded in 39 months. We are going into a super cycle, 5g on the tail end of that, and when you look at that, some of the parts, i think this is a rerating stock that continues to go higher. I think 350 is base case. I continue to look out two, three years you could see a , stock that starts to approach 1. 5 trillion to 2 trillion in terms of that core thesis playing up for the next two years. Taylor what if the super cycle upgrade doesnt materialize . Dan what happens if 5g is a bust . Especially on the first part, i look at the iphone 11, you look at the trajectory going into later this year. From our work in asia, it looks like the line in the sand is about 200 Million Units with the 5g cycle, so in terms of suppliers, all indications are that will be a strong product cycle. There could be speedbumps and we will hit those in a given quarter going into 2020. Go back 5, 6to years in terms of where ive seen it. That is why we have such a bull thesis on apple in terms of the iphone in terms of services and rerating. Taylor part of the bull thesis is a supreme balance sheet. I am taking a look at another 100 showing frankly billion of net cash, cash after the debt they have. What is the best use of cash . Dan it generates 60 billion in free cash flow. I continue to believe they will get vertically integrated. They will have more technology phone. The you saw the intel 5g acquisition, i could see more of those, but i do think content is what they go after. I think they will acquire a studio in 2020, mgm, lionsgate, a handful of others that i think would fit the bill, because content is key, that is services. When you look at the streaming tv service, that is something they could look to acquire. They will continue buybacks significantly, but i do believe cupertino gets more inquisitive gets more acquisitive in 2020. Taylor i want to go to microsoft. According to the bloomberg terminal, you still have an outperform rating on microsoft. I keep hearing their azure cloud product is poised to benefit more than amazon from the shift to cloud. Do you agree . That continues to be why it top pick, along with apple. The ceo in my opinion, covering tech for 20 years, it is one of the most jawdropping turnarounds i have seen for any tech company. Because right now, microsoft is the cloud play. I think they further narrowed that gap with aws. Look at the jedi deal. I think on the first phase of cloud, it was amazon. They won that. The next phase will be microsoft. That is why it is a rerating stock and numbers continue to go higher. That is one that is only halfway through this cloud story playing out. Taylor Microsoft Teams product is a big competitor to slack, which you have an underperform rating on. Walk me through why you will be shying away from slack. Dan not to be too game of thrones here, but i think winter is coming for slack. When you look at teams in terms of where that is focused on the broader azure 365 holistic vision, teams goes up against slack. What will be tougher and tougher is that slack tries to penetrate their core microsoft install base, which is key to the bull thesis. Slack is a stock that will go significantly lower from here because of that competition. It is tougher and tougher to go microsoft on this area. Slack is a phenomenal company, everything they have done, but i just think some darker days ahead. Taylor you also cover cyber stocks, especially as we head into an Election Year in 2020, what is your thesis on cybersecurity . Dan thesis is i. T. Spending is going to go 3 to 4 . Cybersecurity as of right now is six to seven times that number going into 2020. In terms of cybersecurity, that continues to be i think it is a golden age for cybersecurity. I look at names like palo alto, point, you are seeing more and more data moved to the cloud. You have to protect that. Today, only 30 of workloads are in the cloud. That will go to 50 in the next two years. A big beneficiary is cybersecurity. Thats why in my opinion going into 2020, cloud and cybersecurity are the two key themes, especially in software, where i want to be invested. I think there will be a lot of m a and cybersecurity. It is fertile and ripe for consolidation. Taylor you heard it here first, cloud and cybersecurity. Wedbush managing director dan ives, thank you for joining us. Coming up, senator john h awley is making his mark by taking on big tech. We will hear from him on how he plans to make sure Companies Like facebook and google respect your privacy. That is next. This is bloomberg. Taylor senator josh hawley may be the junior senator from missouri, but hes making a name for himself by being one of the senates most outspoken critics of big tech. He has introduced bills to make big tech more transparent. Hawleye with senator in november about taking on big tech, starting with a letter he sent facebook demanding they explain their location Data Tracking policies. Senator Hawley Facebook has said to users that users can turn off location tracking, but it turns out you cannot. Even if you say you dont want to be tracked by facebook, facebook on your phone continues to scan all the wifi in your area and continues to use your cellular information and continues to transmit that information to facebook. This is another misrepresentation, and i would like to know why facebook is telling users they can stop tracking when, in fact, they cannot stop tracking. Google does the same thing, by the way, and i think this is one more instance of Big Tech Companies not being honest with us about the data they are collecting. Taylor so you think they are purposely misleading users . Senator hawley i dont know how to read it any other way. I mean, you read the post facebook put up for all of its users saying you can stop facebook from learning your precise location a very lawyerly phrase, as it turns out. I think the normal consumer would never imagine if they say i want to turn off my Location Services, that facebook is still tracking them, still tracking wifi, still using cellular data, the Cellular Network to pinpoint their location. I think it is very misleading. Taylor what would you like to hear back in response from facebook . Senator hawley i would like to hear the facts. I would like to hear their explanation for the difference between what they have told consumers and users and what they are actually doing. There is a huge gap there, and i would like to hear them explain it in their own words, actually come clean, be h