Transcripts For BLOOMBERG Bloomberg Technology 20240713 : vi

Apple att price for 300 per share. But first, to our stop our top stories, a u. S. Air strike that killed one of irans top. Ilitary officials in the wake of the attack, the director of the u. S. Cybersecurity and infrastructure warning agency, heeded urging the public to brush up on iranian tactics in order to Pay Attention for political systems. Fromscuss, we are joined boulder colorado were tom telemann and in studio bloomberg. Eporter want to start with you. Thank you for joining us. I often read that iran will respond to our sanctions and increasingly it now looks like cybersecurity. It do you see increasing Cyber Security threats . Organizationst are constantly being bombarded by iranian actors, anyone who has the capability. The question now after the attack in what way does that change . In what way might new tactics me in play and how exactly the major glands Major Companies and organizations that manage or control system respond bolster their defenses . That iran will be responding to cyber warfare . Very much so. It will be met by a cyber strike. They have the technical acumen and the weaponry to leverage attacks against the energy, technology and cyber sector. You said they were looking at any new tactic. What could those new tactics be . Think we have seen them drop attacks, send malware or ransomware, but if they have something that can be backed, there is no quick solution for. There might this might be one of those cases. The problem with anticipating that attack is that they dont know what they are in for. The best solution and in those industrial control systems, what we are hearing is a lot of companies that have machines talking to machines dont always know exactly what that looks like. You mentioned energy, transportation, some financial institutions. Watch me through walk me argumentsch of those about how those sectors present vulnerability . [up and pay respect to the coding in iran. Numerous constructed malware throughout the year. We wish to be very concerned with the attack against the Energy Sector and Financial Sector to read even though the Financial Sector is much more secure as the inner than the Energy Sector as a whole. It is so fast that they can island hop through the trusted ecosystems whether it is the service providers, security vendors themselves. Research is up 11 last year and i can only imagine that they will explode in the coming months. Vulnerable aree the transportation sectors were mainly in the past, that sends the most targeted and that is an area where they have really tried to get a good defense up. How much more vulnerable does it make the other sectors . The concern is there is very little visibility to start with. If for instance, an Iranian Group was artie and that network, now might be the time they turn to a connecticut attack where they take syverson Cyber Weapons and use thems to use them to derail a hydro plant through a that is an excellent point. Walk me through that. They arty have footprints on system that they can now relies an attack against that infrastructure. We should be very concerned with lateral movement. The lack of visibility is quite profound because Many Organizations have not asked the tough questions. Do we have visibility across all our devices . And most important, do we have a Cyber Threat Team that is outucting exercises to root that . In au also mentioned that run, it has become very advanced. To heat off irans off iranseed coders . [inaudible] number one, number two is the Iranian Cyber Army is larger than what you would think of a division of military because the they are collection of cyber attackers who pay a march to the regime for activities around the world. All they have to do is deploy one destructive payload to destroy the integrity of that data which could cause a systemwide failure, cause Transportation Systems to fail and more importantly, they could leverage attacks against Emergency Management services during times of crisis. What are you hearing as the potential biggest threat . What would you revise or imagine companies to make sure they are prepared . We started looking at the Financial Sector to understand where things are done and most that got back to us said we are constantly paying attention. Nothing really changes because we have the groups that communicate with each other to prepare for this. E are looking at this everyday i think what has to happen first is iran needs to understand where the vulnerabilities came from before they start planning a new attack. Thoughts as we conduct cyber warfare instead of physical warfare, does the u. S. Start doing that as well to take on iran . The doctrineeak to of the military or strategies being implemented, but i will tell you there are certain red lines and cyberattacks that result in physical harm or significant attacks against the health care or Energy Sector. That being said, what type of response will be leverage is unbeknownst to me. Thing, ask them have we deployed our Cyber Threat Hunting Team . Thank you both for joining us. No wall street is increasingly pessimistic that tmobile will complete its takeover of sprint. Between the offer price and trading price is the highest since the deal was announced in 2018. The fcc and Justice Department have approved the transaction, but 13 states have come out against the deal thread coming up, tesla is on a roll, topping wall street. Can elon musk keep up the momentum . And if you like bloomberg news, check us out on the radio. This is bloomberg. The tesla turnaround continues. The carmaker delivered a record 112,000 cars in the Fourth Quarter. Buyers rushed taking advantage of subsidies in three key markets. The biggest seller was the tesla model three. Joining us, Bloomberg David welsh in detroit. You, 112 start with deliveries in the Fourth Quarter , 367,000 deliveries in 2019. Are you surprised that elon musk did it again . [inaudible] i think ultimately if you look at what he has done, he proved many of the skeptics including ofselves wrong in terms demand, especially in europe. I think if they are able to continue that, especially with china, i think that is where it becomes reachable. Caveat is you had a lot of buyers rushed to the market to take it vantage of subsidies that were lowered or expired at the end of the year. Is there enough demand . That is a big question theree as of january 1, are no longer available to buy tesla and we have seen model three demand in the u. S. Down. Did sales go down because people dont want them or elon musk diverting production to china . My guess is it is the latter. There is any of demand in the model three. As you get past the early adopters who wanted the bigger cars and you start selling less expensive model threes, can make can they make money doing that . Can they lower the cost of the batteries to make good profits on the cars and kind of margins to just about justify the huge valuation. Look, aboutk a 93000 and of those were the model three. Are you comfortable with the composition makes mix . They are really betting the and you have eventually cyber truck come about no doubt i do like the mix, especially what you are seeing in china. 7,500 per share and that is why they are really the linchpin of teslas china strategy. Chartant to show you a and every time we talk about tesla, this continues to be the big surprise with the earnings per share in the last quarter that we saw. Down to continue to cut their profit . Becauseis a big issue even though, they surprised on the upside. That is why there is still a case on this company for some analysts and investors who are can were not convinced and. Hey cant just make money to have to have the margins consistently do that. I think they will get the growth. Particularly in china they have really got to bring costs and get the kind of scale to make real money. Howalk to me more about they can cut costs operationally. Sames saying that on the assembly line, tesla is working on producing model threes and some of the other models on the same line and they have not been able to do that before. Have you noticed that another way to cut costs . Seen, i thinkve there are two areas. One [inaudible] in terms of taking over some of thinklines and then i just operating efficiencies, you willy the scale start to see profits increase, especially model three with software and some of these other pieces. That all flows to the bottom line. I think that is what elon musk is betting on. While i have you, i wanted to show another chart that im looking at and it is a runaway stock price that we have seen. 303. Edian price is that are you comfortable given the size and scope . Runup. A parabolic i think what is starting to happen here is that the vision in terms of europe and especially china, it is now and weg to happen criticize them as well as others , but now this thing starts to really take off and you can get look at theand you stock and it could be 500 or 600 and i think that is what the bears are starting to see. Us andk you for joining dan will be sticking around with us because of next, we will talk about another stock and that is apple and why analysts are so optimistic about this holiday season. Livestreaming on twitter, check us out on technology. Be sure to follow us on quick take on twitter. This is bloomberg. Byapples target was raised analysts on friday. Rbc Capital Markets and bank of america boosted their targets to 330 per share. For more, dan ives on what bush of wedbush. You see apple at 300 per share, 297. Pulling back at overvalued, overextended or breaking out to a new trading range . Breaking out to a new trading range. In the first part, you saw stocks had a massive moves and it is a super cycle we are going through. You look at where penetration is, i think a third of those the for few years, that remains five and i think it is continuing to happen on apple and they are starting to come around. Look, yourake a price target now, leading the way at 350. After an 86 runup in 2019, how much of the good news is already baked into the share price in your opinion . I think only half of it. We are talking about investors , many not basis believing in the 5g super Cycle Company thator a to 16 times now breaking out in terms of trading. Theres still a lot of haters out there. They will continue over the coming quarters not just i funds iphones rocking gibraltar. You get to 350 or north of that as we go into next year. Out . At if 5g does not pan what is or downside or downside your downside . Do look at what is baked into the numbers right now , 200 Million Units line the san. I think what is being baked in numbersnot only bullish , that is what i love about the setup and if it is a dud and you see some disappointment, you see ise sort of speed bumps, it a twopart 5g cycle, so i dont cycle,is as a 69month i view it as 1218 months. So much of the frustrations over this is the cyclicality. What percent of revenue do you tot to see from Services Become a more stable stock . Continuew, iphone will to be the core part of apple. What i would say now, north of 50 billion and next year north of 60 billion. You are starting to see more occurring revenue and i think that is also being berated and that is what i love about the system playing out. We are waiting to get a rare. Pple appearance over at ces anything you are looking out for . We will be there at person and that is obviously more about privacy. Applew last year, that is being like we are here and these others are over here. Them from a data privacy perspective. To drawas they continue the line in the sand on data the 202 areacially code knocking this year. Dan ives of wedbush, thank you for joining us. Coming up, we continue to look at the standoff between the u. S. And iran following that deadly american attack. This is bloomberg. Taylor this is bloomberg technology. Im taylor riggs. Our top story, escalating tensions between the u. S. And iran. Speaking in florida, the president defended u. S. Airstrikes that killed a top iranian leader. If americans anywhere are threatened, we have all of those targets already fully identified, and i am ready and prepared to take whatever action is necessary. And that in particular refers to iran. Taylor to discuss, we are joined from washington by jamil ironnet, Security Firm started by former director of the nsa, and before that he served on the House Select Committee on intelligence. Great to have you. Give me your broad thoughts on iran, most certainly responding via cyber warfare. Jamil iran is going to feel the need to respond. We have taken strong action, the president has, and response to a long series of aggressive activities by the iranians. They are likely to respond in one of two ways. Terrorist attacks abroad, it would be dangerous to provoke a terrorist attack in the United States. But more than likely they are likely to conduct Cyber Attacks in the United States against industry or the american government. Taylor talk to me why a cyberattack seems the better option, versus a physical military attack from them . Jamil depending on what level of cyberattack, they could ratchet it down to a level where it has an effect, but not the kind of effect that would form a very aggressive response from the president , who is willing to take action directly to the iranians in a way he hasnt yet, and the prior president , president obama hadnt in the bulk of his presidency. Iranians are the thinking, President Trump might be willing to go toe to tell with us, that is something they may be weighing in that is why a cyberattack may be the way they come at us and ratchet it down with respect to an attack tear the u. S. They are likely to conduct in response. Saysr i concern is iran that a concern a concern is iran coming out and saying, we could do this at any moment. If that is the route, would you expect a cyberattack coming . Jamil the idea is that iran would do it in the fairly near future. Iran feels the need to respond. They are under pressure publicly, their own population, the regime certainly, the uranian the hour romney and theiranian people are going to be looking for response. Remember, Qassem Suleimani has blood on his hands. Taylor we have an earlier soundbite from an admiral. I want to get your reaction. Listen to what he has to say. They are quite capable in launch am to significant cyber attack against financial, our infrastructure, our educational system, they are highly capable in cyber. So look for horizontal escalation in iraq. Taylor the admiral talking about financial and other infrastructure areas we are leaving more at risk. Where do you see the most risk as well . L the admiral is right. Historically they have been looking at things like financial services, energy, oil and gas, health care, the government itself, so institutions that have an impact publicly and are seen as having an impact publicly. Oft of this is perception the iranians to be responding to something. Abouty to a defense is individual Companies Working together, and ultimately industry and government working together. Somebody said on twitter something that is very important, the dhs needs to step up and share actual information with the private sector to defend the private sector. Iranianhow far have hackers gotten and are we prepared . Jamil i think we are prepared. But the iranians have gotten a lot better a lot faster. Koreansians and north are newer at this game but have dramatically upped their game in the last two or three years and are able to understand able to undertake very serious activities. The question is not the capability, the question is are they willing to take the risk, with President Trump willing to punch back very hard may. Willing to maybe punch back very hard. Do you see big differences in china, north korea, iran . Jamil china is a political, military and economic threat and a longterm strategic threat. Russia being a longer challenger to us has longerterm interests. Iran and north korea are important regional players with global ambitions, but certainly have capability in the cyber arena to act aggressively and attacks above their prey above their pay grade, as it were. There is that concern with iran, that they can do more damage than their military strength or regional capabilities might suggest, and that is why they are a threat in this space. Taylor jamil jaffer of ironnet cybersecurity, thank you. Facebook expected to face headwinds in the year, but one analyst protects a blowout. Victor anthony of ages capital of Aegis Capital is next. This is bloomberg. Taylor fears of facebook hitting a 52week i friday, the stock up over 2 since the start of the new year. Our next guest raised his price target on facebook to 300 from 230 five dollars, saying in a note monday the company will power through regulatory and antitrust risks it faces in 2020. That is Victor Anthony of Aegis Capital. He joins us from new york. Victor, share price closing just short of 209. Give me your path from 209 to 300 . Victor they had a very strong fourthquarter. I base it on three reasons. The user numbers i am looking out for core facebook, instagram, messenger and whatsapp are certainly strong, certainly high engagement in the Fourth Quarter, User Engagement in the Fourth Quarter. Advertiser comeback is extremely positive. That is a strong indication Revenue Growth is solid. The third is a readthrough from Online Retail numbers that we saw, up 18 in the Pay Attention<\/a> for political systems. Fromscuss, we are joined boulder colorado were tom telemann and in studio bloomberg. Eporter want to start with you. Thank you for joining us. I often read that iran will respond to our sanctions and increasingly it now looks like cybersecurity. It do you see increasing Cyber Security<\/a> threats . Organizationst are constantly being bombarded by iranian actors, anyone who has the capability. The question now after the attack in what way does that change . In what way might new tactics me in play and how exactly the major glands Major Companies<\/a> and organizations that manage or control system respond bolster their defenses . That iran will be responding to cyber warfare . Very much so. It will be met by a cyber strike. They have the technical acumen and the weaponry to leverage attacks against the energy, technology and cyber sector. You said they were looking at any new tactic. What could those new tactics be . Think we have seen them drop attacks, send malware or ransomware, but if they have something that can be backed, there is no quick solution for. There might this might be one of those cases. The problem with anticipating that attack is that they dont know what they are in for. The best solution and in those industrial control systems, what we are hearing is a lot of companies that have machines talking to machines dont always know exactly what that looks like. You mentioned energy, transportation, some financial institutions. Watch me through walk me argumentsch of those about how those sectors present vulnerability . [up and pay respect to the coding in iran. Numerous constructed malware throughout the year. We wish to be very concerned with the attack against the Energy Sector<\/a> and Financial Sector<\/a> to read even though the Financial Sector<\/a> is much more secure as the inner than the Energy Sector<\/a> as a whole. It is so fast that they can island hop through the trusted ecosystems whether it is the service providers, security vendors themselves. Research is up 11 last year and i can only imagine that they will explode in the coming months. Vulnerable aree the transportation sectors were mainly in the past, that sends the most targeted and that is an area where they have really tried to get a good defense up. How much more vulnerable does it make the other sectors . The concern is there is very little visibility to start with. If for instance, an Iranian Group<\/a> was artie and that network, now might be the time they turn to a connecticut attack where they take syverson Cyber Weapons<\/a> and use thems to use them to derail a hydro plant through a that is an excellent point. Walk me through that. They arty have footprints on system that they can now relies an attack against that infrastructure. We should be very concerned with lateral movement. The lack of visibility is quite profound because Many Organizations<\/a> have not asked the tough questions. Do we have visibility across all our devices . And most important, do we have a Cyber Threat Team<\/a> that is outucting exercises to root that . In au also mentioned that run, it has become very advanced. To heat off irans off iranseed coders . [inaudible] number one, number two is the Iranian Cyber Army<\/a> is larger than what you would think of a division of military because the they are collection of cyber attackers who pay a march to the regime for activities around the world. All they have to do is deploy one destructive payload to destroy the integrity of that data which could cause a systemwide failure, cause Transportation Systems<\/a> to fail and more importantly, they could leverage attacks against Emergency Management<\/a> services during times of crisis. What are you hearing as the potential biggest threat . What would you revise or imagine companies to make sure they are prepared . We started looking at the Financial Sector<\/a> to understand where things are done and most that got back to us said we are constantly paying attention. Nothing really changes because we have the groups that communicate with each other to prepare for this. E are looking at this everyday i think what has to happen first is iran needs to understand where the vulnerabilities came from before they start planning a new attack. Thoughts as we conduct cyber warfare instead of physical warfare, does the u. S. Start doing that as well to take on iran . The doctrineeak to of the military or strategies being implemented, but i will tell you there are certain red lines and cyberattacks that result in physical harm or significant attacks against the health care or Energy Sector<\/a>. That being said, what type of response will be leverage is unbeknownst to me. Thing, ask them have we deployed our Cyber Threat Hunting Team<\/a> . Thank you both for joining us. No wall street is increasingly pessimistic that tmobile will complete its takeover of sprint. Between the offer price and trading price is the highest since the deal was announced in 2018. The fcc and Justice Department<\/a> have approved the transaction, but 13 states have come out against the deal thread coming up, tesla is on a roll, topping wall street. Can elon musk keep up the momentum . And if you like bloomberg news, check us out on the radio. This is bloomberg. The tesla turnaround continues. The carmaker delivered a record 112,000 cars in the Fourth Quarter<\/a>. Buyers rushed taking advantage of subsidies in three key markets. The biggest seller was the tesla model three. Joining us, Bloomberg David<\/a> welsh in detroit. You, 112 start with deliveries in the Fourth Quarter<\/a> , 367,000 deliveries in 2019. Are you surprised that elon musk did it again . [inaudible] i think ultimately if you look at what he has done, he proved many of the skeptics including ofselves wrong in terms demand, especially in europe. I think if they are able to continue that, especially with china, i think that is where it becomes reachable. Caveat is you had a lot of buyers rushed to the market to take it vantage of subsidies that were lowered or expired at the end of the year. Is there enough demand . That is a big question theree as of january 1, are no longer available to buy tesla and we have seen model three demand in the u. S. Down. Did sales go down because people dont want them or elon musk diverting production to china . My guess is it is the latter. There is any of demand in the model three. As you get past the early adopters who wanted the bigger cars and you start selling less expensive model threes, can make can they make money doing that . Can they lower the cost of the batteries to make good profits on the cars and kind of margins to just about justify the huge valuation. Look, aboutk a 93000 and of those were the model three. Are you comfortable with the composition makes mix . They are really betting the and you have eventually cyber truck come about no doubt i do like the mix, especially what you are seeing in china. 7,500 per share and that is why they are really the linchpin of teslas china strategy. Chartant to show you a and every time we talk about tesla, this continues to be the big surprise with the earnings per share in the last quarter that we saw. Down to continue to cut their profit . Becauseis a big issue even though, they surprised on the upside. That is why there is still a case on this company for some analysts and investors who are can were not convinced and. Hey cant just make money to have to have the margins consistently do that. I think they will get the growth. Particularly in china they have really got to bring costs and get the kind of scale to make real money. Howalk to me more about they can cut costs operationally. Sames saying that on the assembly line, tesla is working on producing model threes and some of the other models on the same line and they have not been able to do that before. Have you noticed that another way to cut costs . Seen, i thinkve there are two areas. One [inaudible] in terms of taking over some of thinklines and then i just operating efficiencies, you willy the scale start to see profits increase, especially model three with software and some of these other pieces. That all flows to the bottom line. I think that is what elon musk is betting on. While i have you, i wanted to show another chart that im looking at and it is a runaway stock price that we have seen. 303. Edian price is that are you comfortable given the size and scope . Runup. A parabolic i think what is starting to happen here is that the vision in terms of europe and especially china, it is now and weg to happen criticize them as well as others , but now this thing starts to really take off and you can get look at theand you stock and it could be 500 or 600 and i think that is what the bears are starting to see. Us andk you for joining dan will be sticking around with us because of next, we will talk about another stock and that is apple and why analysts are so optimistic about this holiday season. Livestreaming on twitter, check us out on technology. Be sure to follow us on quick take on twitter. This is bloomberg. Byapples target was raised analysts on friday. Rbc Capital Markets<\/a> and bank of america boosted their targets to 330 per share. For more, dan ives on what bush of wedbush. You see apple at 300 per share, 297. Pulling back at overvalued, overextended or breaking out to a new trading range . Breaking out to a new trading range. In the first part, you saw stocks had a massive moves and it is a super cycle we are going through. You look at where penetration is, i think a third of those the for few years, that remains five and i think it is continuing to happen on apple and they are starting to come around. Look, yourake a price target now, leading the way at 350. After an 86 runup in 2019, how much of the good news is already baked into the share price in your opinion . I think only half of it. We are talking about investors , many not basis believing in the 5g super Cycle Company<\/a> thator a to 16 times now breaking out in terms of trading. Theres still a lot of haters out there. They will continue over the coming quarters not just i funds iphones rocking gibraltar. You get to 350 or north of that as we go into next year. Out . At if 5g does not pan what is or downside or downside your downside . Do look at what is baked into the numbers right now , 200 Million Units<\/a> line the san. I think what is being baked in numbersnot only bullish , that is what i love about the setup and if it is a dud and you see some disappointment, you see ise sort of speed bumps, it a twopart 5g cycle, so i dont cycle,is as a 69month i view it as 1218 months. So much of the frustrations over this is the cyclicality. What percent of revenue do you tot to see from Services Become<\/a> a more stable stock . Continuew, iphone will to be the core part of apple. What i would say now, north of 50 billion and next year north of 60 billion. You are starting to see more occurring revenue and i think that is also being berated and that is what i love about the system playing out. We are waiting to get a rare. Pple appearance over at ces anything you are looking out for . We will be there at person and that is obviously more about privacy. Applew last year, that is being like we are here and these others are over here. Them from a data privacy perspective. To drawas they continue the line in the sand on data the 202 areacially code knocking this year. Dan ives of wedbush, thank you for joining us. Coming up, we continue to look at the standoff between the u. S. And iran following that deadly american attack. This is bloomberg. Taylor this is bloomberg technology. Im taylor riggs. Our top story, escalating tensions between the u. S. And iran. Speaking in florida, the president defended u. S. Airstrikes that killed a top iranian leader. If americans anywhere are threatened, we have all of those targets already fully identified, and i am ready and prepared to take whatever action is necessary. And that in particular refers to iran. Taylor to discuss, we are joined from washington by jamil ironnet, Security Firm<\/a> started by former director of the nsa, and before that he served on the House Select Committee<\/a> on intelligence. Great to have you. Give me your broad thoughts on iran, most certainly responding via cyber warfare. Jamil iran is going to feel the need to respond. We have taken strong action, the president has, and response to a long series of aggressive activities by the iranians. They are likely to respond in one of two ways. Terrorist attacks abroad, it would be dangerous to provoke a terrorist attack in the United States<\/a>. But more than likely they are likely to conduct Cyber Attacks<\/a> in the United States<\/a> against industry or the american government. Taylor talk to me why a cyberattack seems the better option, versus a physical military attack from them . Jamil depending on what level of cyberattack, they could ratchet it down to a level where it has an effect, but not the kind of effect that would form a very aggressive response from the president , who is willing to take action directly to the iranians in a way he hasnt yet, and the prior president , president obama hadnt in the bulk of his presidency. Iranians are the thinking, President Trump<\/a> might be willing to go toe to tell with us, that is something they may be weighing in that is why a cyberattack may be the way they come at us and ratchet it down with respect to an attack tear the u. S. They are likely to conduct in response. Saysr i concern is iran that a concern a concern is iran coming out and saying, we could do this at any moment. If that is the route, would you expect a cyberattack coming . Jamil the idea is that iran would do it in the fairly near future. Iran feels the need to respond. They are under pressure publicly, their own population, the regime certainly, the uranian the hour romney and theiranian people are going to be looking for response. Remember, Qassem Suleimani<\/a> has blood on his hands. Taylor we have an earlier soundbite from an admiral. I want to get your reaction. Listen to what he has to say. They are quite capable in launch am to significant cyber attack against financial, our infrastructure, our educational system, they are highly capable in cyber. So look for horizontal escalation in iraq. Taylor the admiral talking about financial and other infrastructure areas we are leaving more at risk. Where do you see the most risk as well . L the admiral is right. Historically they have been looking at things like financial services, energy, oil and gas, health care, the government itself, so institutions that have an impact publicly and are seen as having an impact publicly. Oft of this is perception the iranians to be responding to something. Abouty to a defense is individual Companies Working<\/a> together, and ultimately industry and government working together. Somebody said on twitter something that is very important, the dhs needs to step up and share actual information with the private sector to defend the private sector. Iranianhow far have hackers gotten and are we prepared . Jamil i think we are prepared. But the iranians have gotten a lot better a lot faster. Koreansians and north are newer at this game but have dramatically upped their game in the last two or three years and are able to understand able to undertake very serious activities. The question is not the capability, the question is are they willing to take the risk, with President Trump<\/a> willing to punch back very hard may. Willing to maybe punch back very hard. Do you see big differences in china, north korea, iran . Jamil china is a political, military and economic threat and a longterm strategic threat. Russia being a longer challenger to us has longerterm interests. Iran and north korea are important regional players with global ambitions, but certainly have capability in the cyber arena to act aggressively and attacks above their prey above their pay grade, as it were. There is that concern with iran, that they can do more damage than their military strength or regional capabilities might suggest, and that is why they are a threat in this space. Taylor jamil jaffer of ironnet cybersecurity, thank you. Facebook expected to face headwinds in the year, but one analyst protects a blowout. Victor anthony of ages capital of Aegis Capital<\/a> is next. This is bloomberg. Taylor fears of facebook hitting a 52week i friday, the stock up over 2 since the start of the new year. Our next guest raised his price target on facebook to 300 from 230 five dollars, saying in a note monday the company will power through regulatory and antitrust risks it faces in 2020. That is Victor Anthony<\/a> of Aegis Capital<\/a>. He joins us from new york. Victor, share price closing just short of 209. Give me your path from 209 to 300 . Victor they had a very strong fourthquarter. I base it on three reasons. The user numbers i am looking out for core facebook, instagram, messenger and whatsapp are certainly strong, certainly high engagement in the Fourth Quarter<\/a>, User Engagement<\/a> in the Fourth Quarter<\/a>. Advertiser comeback is extremely positive. That is a strong indication Revenue Growth<\/a> is solid. The third is a readthrough from Online Retail<\/a> numbers that we saw, up 18 in the Fourth Quarter<\/a>. The market ascribed most of that to amazon, but they are missing the fact that there were ads that actually drove Online Retail<\/a> sales, and those ads were on digital lot forms, i merrily facebook, instagram, google, twitter and snapchat. So those three put together i think suggest facebook had a very solid Fourth Quarter<\/a>. Yourr i wanted to get thoughts on instagram, because you mentioned that a few times. We were getting other reports that Instagram Stories<\/a> alone make up 10 of all ad revenue for facebook. What is that upside down side tail risk if growth in instagram starts to slow . Jamil victor stories really took off instantly on instagram, not so much on the core facebook platform, but i think that changes in 2020. It is a combination of stories on instagram, the newsfeed, advertisers have really gravitated to stories, from the feedback we are getting. But it is a long runway for stories on instagram, so i am it is aconcerned that large potential today. Want to get your thoughts on a pure evaluation. If you look at the chart i am showing inside my terminal, you know the story, it hasnt rebounded off of its lows and is trading below other Companies Like<\/a> google, apple. This facebook just look undervalued . Victor Facebook Stock<\/a> hasnt really been a story this year, unlike other stocks and other sectors, but i think that story could likely change. Continued, there is user growth in 2020 across all four platforms. Number two, advertising, Facebook Accounts<\/a> for a portion of Global Advertising<\/a> budgets today, growing by 18 by 2022, i think. A significant shift on facebook. You also have 2019 is a peak investment, so you have marginal extension in 2020, 2 thousand 21. In 2020,epfs appreciating 25 , normalized had 35 percent etf growth in 2019. You also have a strong Balance Sheet<\/a> and cash flow, which they dont often get credit for, whatsapp has a billion plus users and they havent even scratched the surface in terms of monetizing those assets. Is worthok stock mainly because of estimates coming in significantly above what analysts like me have been projecting, but i think ultimately will get that multiple extension in conjunction with upside to and revenues this year. Im convinced it is a stock you want to own over the next five years, because of the factors i talked about, cheap relative growth, large cap, and relative to china, it trades just a few points above the s p 500 index. If you look at the multiples versus the s and p 500, it is even more compelling. Taylor you also cover alphabet. Is facebook poised to benefit more from olympics, political ad spending, all in 2020, more so than alphabet . Victor i like both companies. Alphabet will benefit as well as facebook. Facebook is scrappy or and may take more share is scrappier and may take more share than google or alphabet. But you have a benefit from several tailwinds. You have the fact that youtube continues to grow users and the cloudg dollars, business is a formidable competitor in the space, i think it reported will report 12 million runway by the middle of the year. You have good Corporate Governance<\/a>. I was at google headquarters and met the employees, extremely enthusiastic despite headlines you hear about the work at google. I spent a few minutes with the cfo, excellent cfo, Good Management<\/a> team, good Corporate Governance<\/a> which they dont get stocksfor, and multiple as well, similar to facebook. Taylor look at a chart i am showing inside my terminal. You know the story better than anyone, apple and facebook taking off, the loser in all of this is netflix. His netflix prepared for upcoming streaming competition . Victor i have a hold on netflix. The Fourth Quarter<\/a> though, disney plus, the data i am looking at is that user growth he is strong in the Fourth Quarter<\/a>, but ultimately i think all the streaming options, and ones that have yet to be released, when they all coalescing 2020, that will put significant downward pressure on netflix user growth in the u. S. And ultimate the, as these platforms get rolled out internationally, downward pressure on growth outside the u. S. As well. But not only that, you have the cash issue, which is an issue for me. You have the fact that they are losing premium, secondrun content which would ultimately have anturn, and you intrinsically high multiple stocks. And after that is the fact that that i think they have lost Pricing Power<\/a> in the u. S. And they are well on the way to losing Pricing Power<\/a> outside the u. S. Taylor Victor Anthony<\/a> of Aegis Capital<\/a>, thank you for joining us. Apple is making another investment in its streaming service. Butlerhbo ceo richard and his Production Company<\/a> will develop original movies and tv shows exclusively for apple tv plus. Another sign of apples growing investment in hollywood and its ability to attract top talent as it competes for viewers with the likes of netflix, amazon and disney. Here to help break it down is shaw joininglucas us from los angeles. How big a win is this for apple . Lucas it is a big one. Few entertainment executives have a better reputation than richard butler, worked for hbo for close to 30 years during the heyday of what you would consider hbo, starting with the sopranos and recently with game of thrones and the watchmen. He was ceo for the past six years and really only left after at t came in and bought time warner, hbo parent, and had plans to change hbo and make it less independent. Butler had really run his own company and had his own team for a very long time and wanted no part of at ts vision. He left and decided to start a Production Company<\/a> and lean into the relationships that he had. He probably could have had his choice of company with whom to work, and he chose apple. What unique ideas, creations, can butler and apple release, and i will give you that it is a crowded space . Lucas it will be all about talent relationships. Developingrength was relationships with documentarians, filmmakers, writers, producers, he always put talent first and will lean into that network, whether it is with publishers of hot new books, and come up with projects that appeal to apple and to viewers. One thing hbo was good at under butler, even better than disney, as you would take a show that is not one of the most watched shows, and it would seem like everybody was watching about it. If you think about girls are or westwood,irls these had small audience releases but had huge impact culturally and were shared constantly online. Reportingur great highlights how these companies differentiate themselves to compete and you noted netflix may try to win an oscar for some of their movies to really stand out. Where do you think apple continues to focus in 2020 . Lucas i think it will be shows and to a lesser extent movies, with bigname talent that helps them breakthrough. It will be Something Like<\/a> the morning show with Reese Witherspoon<\/a> and Jennifer Aniston<\/a> and steve carell and is up for three golden globes, i believe, this weekend. And that is an Apple Original<\/a> production. Next year you will see them try more of that, but whereas netflix has taken a volume approach, making hundreds or this year maybe 1000 pieces of product, apple will make fewer but everyone they make, they will try to make big. Bloombergsk you lucas shaw, all things streaming wars. Still ahead, Big Tech Companies<\/a> had to las vegas for the cef trade show with digital assistant technology set to take the spotlight. We discuss what else is in store. This is bloomberg. Taylor the worlds biggest Tech Companies<\/a> are headed to las vegas for the annual ces with a rarext week, official experience. Technologys correspondent joins us from los angeles. Mark, what are you looking for . Think isis year i going to be kind of boring, to be honest, for lack of a better term. Im not expecting any bombshell or breakthrough developments from any of the big companies, even apple. I think there will be a lot of talk about smart speakers, integration with cars, so you will hear all the buzzwords. Shower ihad a saw a shower that had alexa integrated into it, so i think it will be a lot of the same and that companies will continue holding their fire until they are ready to make big splashes on their own timelines. Taylor mark, you are never allowed to say boring with me on live tv again. Talk to me about apple making that rare official appearance. Why now . Mark this is all about privacy rights. Apple is not going to be making any hardware or Software Announcements<\/a> or anything. They are going to have their privacyirector of initiatives onstage on a roundtable with chief privacy officers from other companies, including u. S. Government officials as well as facebook. What apple is going to be doing is giving its stance on privacy. Their stance is, when it comes to las vegas where ces is, what happens on your iphone stays on your iphone. There is an argument that that is not entirely true, but you see their perspective, trying to hold themselves up as a privacy pioneer in technology industry, and they are going to do this with the speaking engagement. Apple makes many speaking engagements related to this topic as well, so this is not unique. Taylor i just spoke to dan over at wedbush who said he is going to ces and this is apples way of differentiating themselves from facebook, for example, given their stance on data privacy. You have been covering apple, how is their stance on data privacy . Are people buying the fact that it is safe and they are keeping our data private . Mark in terms of apples stance on privacy, people believe it. People understand there has been a tradeoff mademark in in tere functionality of some apple ai initiatives, with privacy, that they are perhaps not as good as amazon. Or apple pushes back strongly on that and says it is not true. A lot of people think it is true. I think there is truth to that. But apple has the technology to beat that out and make it true that people can have the best technology on ai but also be the most private on apple. People understand there is a lot of encryption and security that goes into effect with the iphone. And what you havent seen as a major privacy breach or anything like that on apples part, compared to some of the other Internet Service<\/a> giants. Talking a, apple is lot about privacy but also backing it up in practice. Taylor should we continue to see further integration between all these companies, so that my experience as a consumer is seamless, i could have an ios on an amazon, alexa, etc. . Mark they say you will but i dont buy it. These companies are trying to beat out each other. This is a lot of talk and i will believe it when i see it, but i dont think it is going to be at 2020 ces. Taylor bloombergs mark garman gurman. Bloomberg technology is streaming on twitter. This is bloomberg. Why is it wall street doesnt Value Airlines<\/a> as much as you think they should . Investor, warren buffett, said you guys are the chicago cubs of the business world. You not only had a bad decade, you had a bad century. Right . Went to fritolay, what percentage of people lose their luggage . Can you fix your tie please . 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