Caroline i am caroline hyde. Ed im ed ludlow in San Francisco. Caroline full earnings coverage or had. We have cisco its outlook conservative we will hear from the cfo. Ed walmarts results posted big jump in its online business. Caroline we will be sitting down with start up perplexity to discuss complexity and the search place. Nasdaq out of new record high. Global stocks still raise higher in the Economic Data gives us confidence but will the agency be able to cut . 10 year flat. This is a risk on day. We have seen, down on the day at 65,000 level. Its not all risk on n. End. Ed walmart is up 6 . This story is a search on growth in its online business. We will go to j wolf to talk about that. Cisco is now down 2 in its outlook was seen as strong. We are going to hear from the cfo to break down the networking gear. We come to china. Jd. Com we are learning who the winners and losers are in the ecommerce space. Ali baba is up, why . Jd. Com number one and ali baba number two. Caroline Investor Sentiment more broadly. We will tackle these record highs with chief global strategists joining us. Willie carreon to the tech outperformance . Great to be on with you. More fundamentally we can see that from the implemented data, it is sewing. This is still a fundamentally Strong Economy and it should be fairly solid through the year and should translate to a broadening of the rally. Ed i have been looking at the index levels you look at the nasdaq 100 and s p i cant believe we showed the average on the top of the program. Is there any commonality in the direction of the market and strip out the magnificent seven. Is there something in common for this Market Forces dominated by our look at those Single Technology names . Seema they are still dominating the market. What you have seen from the most recent earnings season is this performance is spreading out to other parts of the economy. If that can be maintained and if you start to have more customers at the latter part of the year. They need those rate cuts. This is a broad, good story but we need to see more evidence in order to secure the perspective. For now, evidence suggests this is not just a year for the mag seven. Caroline what about valuations , chip stocks, the reigning formula of nvidia and alphabet and apple getting a lift. Are they out of whack . Seema i was traveling across the u. S. With investors everywhere. Thats a question that still keeps coming up. Do we think this is overvalued and time for correction . We would push back on that yes is frothy but comparisons to the dotcom bubble . Absolutely not. These earnings are believable but there is something fundamental in this valuations. With this kind of market where there is so much good news there is always a risk of a call back. We look at the story as a longterm play and its one of our favorite areas of the market. Ed the good news priced in. What we have been talking about recently is the relationship between u. S. And china constructive or otherwise. Is that a headwind youre factoring in when you look at the Technology Sector . Seema is something we need to consider when youre going into an election year. Its very much of a single stock named bases because some will be exposed and others not so much. From the most recent data, it does seem like its cyclical. Something to lift expectations, if thats carried through those bigger Multinational Tech Companies suggest they are less at risk then we would have considered. Its not yet at that point where its changing our perspective. Caroline i like that we go global. Japanese stocks are on a twoyear and european stocks are setting records as well where do you like other geographies . Seema in the past couple of weeks what we have been challenged with although people believe in the u. S. Exceptionalism they have been converted by the rate cut continuing any think about the growth story you see downside surprises and of course, valuations. This is a good time to think outside of the u. S. Europe the perennial disappointment, we know what the ecb will do and confidence zero because in june and thereafter. We are starting to see cyclical economic upside surprises. And valuations are more attractive. Even in china, given where sentiment was, you couldnt get worse than that. The Economic Data seeing signs of brightness, that is looking like a more attractive part of the market. Ed youre a on Bloomberg Television and Bloomberg Technology. I wanted to ask you how you are using ai at work, at home. What have you been up to you in the world of ai . Seema any company has to be embracing ai and trying to figure out where they can use it from a work perspective trying to adopt ai into our models and analyze companies from a single stock perspective. That will be the easiest way to do a full analysis and get a full, complete level of information. I have small children and ai is something they talk about at school as well. Its not just dominated by finance news. Ed principal Asset Management seema shah. Coming up on the show we will hear from the cisco ceo scott herron as is outlook is seen as conservative. We will be right back. This is Bloomberg Technology. Caroline we are going to talk cisco is been quite the volatile trade. We are now off by 1. 7 . Despite the forecast showing the return of customer spending. Bloomberg got the chance to discuss the results with scott herron. Scott this was our fiscal fourthquarter. I would not guide 25 until we got to the fourth quarter. We acquired splunk and analysts are trying to adjust to what does the combined company look like. I wanted to get ahead of that without doing a fulsome guide get enough information so they could narrow down their expectation. It it conservative . Its a first few. The encouraging thing for us, we work through supply Chain Disruption that cause us to build a big backlog. As we got the components and we were able to clear that backlog, revenue spiked and compare those compare points. The year over year is difficult to unpack. We will do more of that later. We are trying to give them enough insight so the models will converge on what we guess the right side of the numbers. Katie making the point is very early. Lets talk a little more about inventory you make the point that it feels like youve turned a corner with supply Chain Disruptions and what is that say about corporate spending. There is a bit of an uptick. Where is that coming from and what kind of customers are we seeing demand from . Scott we have splunk added in for half of a quarter. Orders were flat overall which is an improvement. Customers have been trying to implement a huge amount of product we shipped out to them and we see that ending. We see them getting through implementing the product i the end of this fiscal quarter and as that happens we are starting to see demand return. Within that overall flat, growth and security, growth and Data Center Networking orders and growth and campus switching. That shocked a lot of people that were seeing growth there with the sense that theres more office space than ever. Caroline tailwinds there. We have to talk about ai. A detail that caught a lot of peoples eyes is you have a billion dollars on Ai Infrastructure orders and my question there, is out for a particular line of business . Where will that spending be taking place within cisco . Scott we put that out there and its in the backend if you think about how these models get trained and used as in the backend networking and optics in the backend. That big large cloud and tier two infrastructure buildout. Ed cisco cfo scott herron giving a classic class on being a cfo for a technology company. Lets get some clarity on cisco and its earnings from ian king. There was a lot of cfo speak in that. Unpick it for us. The best way to pick it is what happened with this chair prize. We got an initial spike. Trading today was down moderately but what really happened and scott alluded to it is the expectation for orders was that it would be down as much as 10 or even more in the quarter they reported. It came in as kind of ok, may be up slightly. It was not as bad as we feared. Then when we go through the numbers and listen to the call which is seeing a reaction this morning. Bearing in mind that just did this massive acquisition. Caroline we have to take splunk here. They had this bedding fanfare over and nvidia dl has not brought in Revenue Streams . Ian that is still early days. This billion dollar ai related orders cisco once to go to the party. There are a lot of questions on the call yesterday what did you mean by a billion dollars . How sure are you that these are real orders . There was a lot of two and fro about whether this is real in the bottom line is, investors arent quite ready cisco went to the party. Ed you broke astarte before a story about qualcomm. Ian they are a server chip company and teaming up with qualcomm to bring in this accelerator to bring cheaper alternatives to what nvidia is selling for tens of thousands of dollars. Caroline we sat with renee james at various times throughout that event and she is a breath of fresh air to the area of computing but its like a trifecta is going on. They cant do it alone they have to work through qualcomm but Energy Efficiency . Ian as you point out she is making a point which many agree we cant carry on like this. The cost of ai is just too great right now. We need technology answers to that problem and more efficient chips and cheaper chips and she is trying to offer her company as a solution to that problem. Caroline managing to come out to the market with a combination offering. Its brilliant that you got to break it for us. Coming up we will talk about walmarts Earnings Results and finish on the ecommerce side. 4 billion deliveries in one day and same day over the last year. We are down by 12. 8 . It is a video game publisher warning it will be lower than the estimate. This is Bloomberg Technology. Sandals jamaica sale is now on with rates from 199 per person per night. Visit sandals. Com or call 1800sandals caroline time now for talking tech. Microsoft is said to have vast hundreds of visits china staff to relocate. The tech giant has asked us employees to another country. Amid growing tensions between the u. S. And china. Plus, according to filings jd was the top holder. Barry has been making a return to the chinese sector. Chinas internet search leader. After the beijingbased retailer cut prices to counter competition. They are seen a key bellwether of chinese consumption. Ed there will be a big ecommerce theme because walmart is also out that shows a 22 jump yearoveryear and is online business. Thats a story but what is behind it . What has walmart been doing with his digital presence . Ecommerce has been an important business for walmart. Its one of the big factors of growth and what they have been doing is adding capabilities like delivering orders early in the morning and delivering items faster, same day. They are also improving what they call the perfect order which refers to different metrics like when orders arrive or how complete the orders are and they been working on improving all of those things while cutting costs associated with delivery. Caroline the numbers are phenomenal and when youre looking at 4 billion items in the past 12 months delivered by same day or next day, thats comparable to amazon. I was just set down and make up saying have you seen fake handbags being sold on walmart . It came from a thirdparty vendor and they did not live up to expectation. Marketplace has been one of the factors for growth for walmart and it has been trying to add sellers. The huge benefit of that business is the fact that the company could really grow the range of items that it sells online and they see a lot of opportunities with general merchandise in particular. They talked about items like pets, baby going up in sales by 30 on marketplace. At the same time compared to selling items in stores, we will see the different takes they test out with that business. Caroline for now, outlook looking very strong. Coming up we will be doing all things search. With the ceo of perplexity Aravind Srinivas. Ed standby for daily game stock, meme stock update. Down 24 in the session. There is a story about the meme stock frenzy unraveling but if there is a Lesson Learned is that meme stocks on market does not make. Caroline welcome back to Bloomberg Technology and carolyn haydn you are. Ed im at the San Francisco we had record highs but i wanted dig specifically into tech. S p up. 3 mastec up as well. Some of the u. S. Listed but chinese Automotive Companies are under pressure because of the expansion of tariffs on those names. We are in the meat of the earnings season coming out of china. That index up is up 1. 2 . The name of the week is alphabet, the parent of google. A lot of that to do with google i o and the key announcement centering around a deeper focus on ai and how it is searched. It is another name etc. Record high. Maybe online but the market but there is a lot of focus on this single name and enthusiasm google is making to combine as Search History with this work on ai. Caroline there are a lot of other companies in that space. There is a key player making headway for the past couple of years and we will get to the Business Model and him moment. Perplexity is creating a new advisory board. Here for more is the ceo Aravind Srinivas. Caroline you are for male directors, where some women . We have a lot of people from many different diverse backgrounds helping us. Caroline so one female and foster and board member. Lets talk about what these three people bring across the board and experience what do you need in terms of advice . Aravind as a start up weve been able to scale up in a short period of time. We need strategy on search and build our index and scale it up to more users. In terms of how our mobile strategy evolves. Searches about distribution. You really cracked the distribution code to crown so we are working with email from hoover who was aggressive towards growth. Caroline someone say it was too aggressive . Aravind we tried to tone it down. Startups have to be aggressive in terms of competing against incompetence who have millions incumbents who already have millions of users. A great mobile strategy a great mobile experience and recording a search. He is going to advise us on getting a lot of inhouse issue. Ed i have to ask you about google and the real emphasis that google put on integration of ai into search. This idea of ai overview. You search for something and it gives you the text answer as opposed to links. A lot of people want to know what is Aravind Srinivas reaction . Aravind is the same thing they just call this a different name. Its being rolled out to more people but not rolled out to every user of google. When people go to google they hate the latency they expect instant surrender. The moment you wonder whats gonna happen. Whether there will be links, ads or other panels. You are clobbered with all of these elements versus a single question answered. User likes simple, minimal, clean products. Ed do you have any information or sense that this was google responding directly to perplexity . Aravind possible. Ed how do you plan to respond yourself . Aravind by being a better product and working on categories of searches that they are not as incentivize two. Like shopping. I still get ads. There are categories commercially, insurance, travel, shopping, education. All of these different categories where advertisers are screaming at you to click on them. Caroline whats interesting, you have built, you use openais large language model and rumors they will come up with the substantive search. Aravind their strategy is cleaner than what google is doing. They are building out a separate product. Building out a separate product theyre competing for users from the same place. They are taking advantage of the existing user base and we are confident our work on using many models and many indexes on the orchestration we do will keep us the superior product but it is a good competition. We will watch what they release and secure it faster. Caroline is competition for talent, for dollars . This is not a cheap process. Are you fundraising again . Aravind are there rumors . All i will say is we are trying to be efficient as possible and not going bracing a Million Dollar rounds. I would say yes, i agree with you. This is going to be expensive you will have to fundraising again at some point but our goal is to get our revenue in good shape so as we scale in terms of number of people there is good revenue for the employees. Ed welcome to Bloomberg Technology. Im glad youre in the studio with us today. We get a lot of questions from the audience. There are many perplexity users out there what always strikes me is how simple the questions are they want the daily active metrics, where these people are . Aravind we care more about the number of queries we get every single day thats a better metric for us because its tied to expanding our index. We are pretty close somewhere in the late single digit is. Thats really Good Progress from where we started. Every single month we serve millions of inquiries. Looking forward, being chats served a billion inquiries and we had 500 million. Looking forward, if we sustain these growth waves were headed for a great future. Ed i wrote on monday that consolidation is coming among ai startups. Have you held talks with Bigger Technology companies about the potential of being acquired or do you see yourselves as an acquirer of smaller names . Aravind i agree with you on the broader line of consolidation thats already happening with the ai startups that are no longer there. The ones that exist are getting more and more powerful in terms of market share and apis. We have looked into acquiring smaller s