We will talk to analyst Michael Levine as he boosts his price target. Mobility tech is all the rage and uber takes one more step to becoming a onestop shop for all of your transportation needs. Details on the uber bus. First to our top story, u. S. Stocks advance. Heavyweight Technology Companies led a rebound. 100 led by Companies Like salesforce in alphabet, fresh record highs. That means that the smallcap Technology Companies are looking relatively cheap on a valuation basis. Joining us, bloomberg across asset reporter sarah ponczek. Take a look at a chart i am showing on a forward basis, looking like some of these smallcap Tech Companies look cheap relative to some of those big things we cannot stop talking about. Sarah you are looking at the forward price to earnings ratio of the s p 500 versus the s p 600 for both technology sectors. The s p 600, as you can see, trading at a discount, at the lowest level since 2001. I will say that we posed this chart to Jonathan Golub of Credit Suisse about an hour ago and he said, i would not be too quick to count out these large Tech Companies. Yes, we saw the rally, but the earnings picture for smallcap is likely to be a bit rockier. At the same time, many are saying that it is probably time for a leadership shift. You look at 2019, facebook, amazon, apple, microsoft and google, those companies accounted for 29 of returns. Some are looking for any reason that we might see a shift. Byron from blackstone puts out an annual list of surprises every year. This year, one of those was that the fangs will likely lose their leadership luster. Likely because of the political scrutiny they will face ahead of the election. At least early on in 2020, especially today, we continue to see large cap tech outperforming. Taylor as we get away from some of the bigger tech names, we go into the smaller companies. Salesforce, a topic by rbc, closing at a record high. Why does rbc see salesforce as a top opportunity . Sarah it seems like the stars are aligning. And i mean analyst recommendations. Today we get a recommendation, what they did was they pointed to their revenue forecast for salesforce throughout 2020, through 2024. They also see room for margin expansion. It is not just rbc. We had also seen suntrust as well, one of the compelling names within the software space. When you go back to rbc, they did set a new price target. They have the street high, a 25 upside. We closed around 173 per share. We have to remember in 2019, just last year, salesforce was the laggard. Yes, the stock ended up, but when you compare that to the s p 500 Technology Index or the Software Industry groups, it is less than half of that. 40 gain. Taylor i also want to take a look at netflix. Appeared to be snubbed a little bit at the Golden Globes. Did the shares react to a lack of awards . Sarah we did see a little bit of a modest reaction, potentially negative, but we did see a pickup. Yes, of course, netflix will be facing immense pressure from other streaming services, especially with the launch of the likes of disney plus and others. I am not sure that investors are too worried that a netflix movie did not win the Golden Globes as opposed to some other production as well. Taylor i want to end on a more serious note. Cybersecurity stocks, crowd strike, for one, up 9 today as many brace for what they expect to be oncoming cyber warfare from iran in retaliation. What are you hearing in the cybersecurity space . Sarah we have seen quite the rally across cybersecurity is stocks. Fireeye, lifelock, crowd strike. Crowd strike of course is the company that went public just a few months ago in the middle of 2019. Bloomberg intelligence says companies that offer Threat Protection Services are likely to benefit more than those that just provide firewall defense services. It is much to be seen, people are still speculating, trying to get an idea on how iran will retaliate to the airstrike that did kill qassem soleimani. We will see how they truly do come out. The idea is that, if they may retaliate through cybersecurity excuse me, through cyber warfare, then these cybersecuritys, other companies will need their business. Taylor thank you for joining us. I want to stick with cybersecurity and escalating tensions between the u. S. And iran. Bloomberg has profiled one american businessman who can attest in detail what happened after he provoked iran. I want to bring in our cybersecurity reporter. Fascinating profile you did on Sheldon Adelson. Who is he, and what do we know about how he coped with the iranian cyber attack on him . He is a casino magnate. In 2013, he, at a conference in new york, was speaking about ways to deter irans approach against the United States. He suggested if you want to put them in their place, go test a nuclear bomb in the iranian desert. That did not go well with iranians. In the months that followed, his casinos were hacked, he had to spend at least 40 million to secure them. Over the next year, the u. S. Government did confirm that it was the iranian government, iranian assets that did infiltrate his system. They do have the capability to push back if threatened and i think that does hint to what could be in store after last weeks attacks. Taylor is there any lesson we can take from his experience, Sheldon Adelson at las vegas sands, to some other corporations in order to prepare . Kartikay it is hard to know exactly. Generally speaking, industries across the United States are paying close attention to their own networks if they werent already. Especially the financial sector. They know they are a representation of capitalism in the United States and perhaps low hanging fruit. We are seeing that by how close lipped they are this week. They do not want to talk about what has happened and how it could impact them. We go to one line response from a group that represents them after the hacked, basically saying we are doing what we always do to protect our infrastructure and we will let you know if we have more to say. Taylor you mentioned the financial industry, how well prepared are the other industries, energy, infrastructure, education are all ones that come to mind. Kartikay the financial industry is one that we deem to be pretty well prepared. They have spent hundreds of millions of dollars to prepare themselves. There are others that are more cashstrapped. Obviously, hospitals. They do not have the resources to protect their networks. Local governments, we have seen Ransomware Attacks. They occur because these are easy targets. Hospitals. Then you have utilities, companies that manage gas lines, to an extent, power grids. These are industries that are lacking resources or priorities to nail down for abilities. Nail down there securities that could be targets in the future. Taylor now that we can look back at the last few days, what what are we hearing . Kartikay over the weekend we saw a government website defaced with proiranian antiu. S. Messaging. This is pretty common and often automated, but it is a hint that perhaps the slow trickle of attack finding its way into government and private spaces. What we are hearing now is that irans sophistication has evolved over the past decade. About 10 years ago, the stuxnet attack crippled their uranium facilities. Motivated, that has iran to prepare for their own offensive capabilities. Over that decade, we have seen them attack. The saudi government a couple of times, other governments that are fair warning that a similar attack could occur. What that will look like is largely speculation. Taylor still waiting to see. Thank you. Coming up, alphabet gets a new buy rating. We will speak to Pivotal Research next. If you like bloomberg news, check us out on the radio, the bloomberg app, bloomberg. Com, and in the u. S. , on sirius xm. This is bloomberg. Taylor alphabet was upgraded from a buy to a hold from Pivotal Research. Michael levine says the narrative continues to improve in 2020 and beyond. Give me your take. How do we get from a 1397 to a 1650 on the stock . Michael one thing that was most compelling to us, a change in regime with sundar stepping in, as ceo and chairman. But something i think investors may have missed, his compensation agreement was filed under december 20, and what struck us was that he basically is compensated on the percentage differential that google stock does relative to the s p 100. He has basically got a 45 million on plan for Stock Performance in 2021. A second 45 million for 2022. It is pretty refreshing and encouraging to see alignment between management and Stock Performance. From a company that is historically taken a very different approach to working with the street. Taylor what do you think he can do that the former founders of alphabet could not do . Michael i think it is not what they could not do, it is this philosophy they had that we are smarter than the street, we will beat to our own drum and there is no need to do anything differently than what we are doing. Fastforward, if you look over the last couple of years and you see the kind of disclosures we have seen from Companies Like amazon, netflix, alibaba. You are able to see in the example with netflix, they had been running at losses until quite recently internationally, but a pretty wide gap with domestic margins. If you did not have that disclosure and did not understand what was going on, you would have seen this big push. With google, we are pretty on thomas currian, saw that he was quoted in the april time frame basically they were around 1 10 the size of azure or awss salesforce. His intention is to get it to years. Eir size in two that is expensive. You help them understand what youre doing revenue wise, what the margin drag is, it allows people to better understand the moving pieces. Taylor michael, you call 2019 a Critical Foundation year. Take a look at a chart i am showing in my terminal, frankly, alphabet has been lagging other big faangs like apple, facebook. Why was 2019 so critical . Michael the part i was trying to call out as critical is really around the Cloud Business. The Cloud Business is where we will look back and see that currian basically got brought in from my perspective underwhelming with their cloud efforts, but has made a lot of changes in a hurry, bringing in key lieutenants for the different regions, making an acquisition of a Company Called lookr individualization space for 2. 6 billion. Outside, looking in, what i suspect happened was they actively tried to recruit him and he said, i dont need the job. I am interested but i will only do this if i am set up to win. It is probably a couple year journey in terms of getting the Building Blocks in place, the right heads in the right seats. But i think he has made a lot happened in a relatively short period of time. Taylor i want to finish pivoting from the cloud to the ad revenue business. I keep hearing that facebook more so than alphabet poised to benefit from 2020 ad revenue growth. Do you think they can both Grow Together or is one growth at the expense of the other. . Michael i think they can Grow Together. The ratings have obviously been suffering. Money is trying to find a way to get spent. It is one of the reasons we thought that q4 was particularly strong, that ratings were underwhelming. As a marketing manager, you dont want to have budget left at the end of the year. We think that helped provide some bolster. For context, what is impressive with alphabet, we basically have them forecast growing 24 put in growing 24 billion in 2020 versus 2019. Facebook, a little bit smaller , 16 billion of incremental yearoveryear growth. I think it is fine for both of them. I think both of them can do great. Taylor Michael Levine, analyst, Pivotal Research group, thank you for joining us. Up, Columbus Ohio touts its Transportation System as one of the smartest. We will speak with the mayor, next. Bloomberg technology is livestreaming on twitter. Check us out technology and follow quick take. This is bloomberg. Taylor the annual ces 2020 kicked off today in las vegas and the future of Mobility Technology is front and center. Lummis, ohio is one city looking for opportunities to reinvent its Transportation System through technology. I am joined by columbus mayor Andrew Ginther. Many cities want to be the new tech city. What have you done specifically in the last year to make yourself a smart city . Mayor ginther we went up against other cities for the smart city challenge. My first years mayor in 2016, there are so many things that connect, the integrated data exchange. We now have autonomous shuttles we have been using in downtown columbus. We are going to launch this month the first one in america that will serve residents in a neighborhood. We believe in columbus that mobility is the great equalizer of the 21st century. We want to make sure we are using innovation and technology to help people improve their own lives. Taylor the first selfdriving shuttle operating on public roads in a residential neighborhood. Given all the safety concerns, how did you overcome that to make sure you are efficient but safe . Mayor ginther we started working with the residents of linden. That is where the shuttle will connect residents to the community center, the settlement house, other opportunities. Continuing to work with federal, state, and local officials. We have been working on it in the last month, and it will go live for the public in january. I am going to be on the first shuttle, letting them know it is safe for them and their family, but also taking into account that there will be schoolchildren. We will be limiting the hours just to be extra careful and reassuring the public that this is a safe way to get where they need to be. Taylor you said you would be releasing evs to the fleet by 300 2020. 2020 is here. How are you doing on that goal . Mayor ginther we have continued to grow that. Over the last three years, we are at 121 growth in ev adoption. The country is at 94 and the midwest is at 82 . Our goal is to have that ev penetration. We at 0. 3 . Started we were we are currently at 1. 2 . Making Great Strides in ev adoption and it is because of this great publicprivate partnership. We had 90 million put up toward a local match. The 40 million came from dot and 10 million from philanthropies. We are now up to 730 million in aligned investments in our smart investment work with a goal of a billion dollars by the end of this year. Taylor we talk about 5g on this program, how it will be transformational. Especially for midwest regions. Where are you in the race for 5g . How beneficial do you think it will be to columbus . Mayor ginther another way we are collaborating with the private sector, protecting the rightofway interest but working with these providers. Our big focus is on equity. Making sure that as we are growing dramatically, we are doing it inclusively, making sure that residents of neighborhoods throughout the city can access and benefit from 5g technology. Taylor iring tech workers, Millennials Want to be in tech, where are you in being the next tech center . Mayor ginther we believe we will grow by one third over the next 30 years. We know that growth will be dynamic and dramatic. We want to do it inclusively. As more people call columbus home, we want to make sure there is a place in our future for the people of columbus who have made it so special. Taylor thank you to mayor Andrew Ginther of columbus, ohio. Coming up, tensions continue to rise. The u. S. Braces for a potentially iran cyberattack in retaliation to that deadly american attack. We discuss that next. This is bloomberg. Taylor this is bloomberg technology. E join bloomberg daybreak australia to bring you the latest tech news. Lets take a look at the top mobile tech stories of the day. Lets start with china. Bloomberg has learned that the chinese trade delegation plans to sign the first phase of the deal with washington. That is on january 15. The funny part of the story, a chinese newspaper says the Group Originally planned to travel earlier in the month. Plans when alter the trump tweeted that it will be signed on the 15th. Food ordering software, ordering an initial Public Offering where it could see a valuation of 1 billion. The shake shack founder sits on the board. Xerox, a loan with banks that continue pursuit of hp. It is the largest ever bridge loan in the tech sector surpassing ibms 20 billion for its acquisition of red hat. The xerox bridge is also the first jumbo acquisition to emerge in the loan market this year. Those of the top tech stories we are watching. Taylor lets get back to our top story of the day, the u. S. Air strike that killed one of irans top military officials is raising the spectre of a cyberattack from iran. Cybersecurity companies gained after the increased risk of attacks will result in more business. For more, we are joined by the senior director of intelligence analysis at fireeye. Great to have you on the program. What have you noticed recently anyhe last few days of pickup in activity or potential attacks we may have thwarted already . John our biggest concern now is for the physical safety of some of the users we have worked with. We have seen iran after incidents such as this, when tensions rise, carry out cyber espionage. We are concerned about cyber espionage. We have seen them develop a surveillance capability where they have tracked pe