History. It will relocate 27,000 students at the end of this month. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. From washington, i am alisa parenti. This is bloomberg. I am emily chang, this is bloomberg technology. Stage in take center france, with the president ial election days away. How big tech is mobilizing to prevent viral misinformation from influencing the vote. Earnings bonanza with apple and facebook leading the charge, we break down the latest headlines of this week in tech. Free original content courtesy of youtube. Bet oneo giants big celebritydriven shows. The nasdaq and s p 500 closed at new, alltime highs. U. S. Stocks rose for the Third Straight week. Abigail doolittle joins us now from new york. What happened in this session in tech stocks in the week in general . We started off, relatively lackluster session, and on the close, both the nasdaq and s p 500 finishing at record highs. A lot of this has to do with tech, the bestperforming sector of the week, relative to the best stocks for the nasdaq. It helped of the nasdaq rise of third week in a row. Some of the best weeks since november of last year. They posted a solid march quarter, beating estimates by 1. 5 . There drug numbers were good enough. That stock went up quite nicely on those results. Softwareinner, a company. They are saying some of the could include bain and carlyle. They have a 23 billion market cap. They may not choose to sell themselves that all three of but it shot up higher on the week around as big investors. The possibility they may by cit rix. And analyst said it has to do with a report out of europe suggesting demand for travel is very strong. Interesting, on the day the stocks were down as hotels say they will fight the monopoly these two Online Travel agencies have formed. Itll be interesting to see how that lays out. Emily we saw moves on the back of apple earnings, where did we end up . Abigail another record for apple. They put up a march quarter that was disappointing. They beat on earnings, missed on revenues. They are getting a pass on iphone 8 super cycle. We are waiting to see. That is where the pressure is for the back half of the year. Ande hop into the bloomberg take a look, this is a longerterm chart. And 2013, the Stock Plunged in a big way. That was around disappointment for the iphone 5. Then it shot up in a huge way. The disappointment was on the iphone 6s. The iphone 7 has been stronger. Everyone is looking forward to the iphone 8. If you look at the move up between the blue lines, we could see choppiness. The technicals here are mainly pretty solid. Lets rounded out with netflix. Netflix did trade higher on the week, having its best week, up a second week in a row. Deal,g on that baidu their entry into china. Netflix could potentially be bought by apple with that huge apple cash pile of more than 250 billion. Microsoft and intel were among the bed best stocks for the nasdaq. 9 laptopt released a 99 with an intel chip inside. Tech was the best sector on the week come a really helping the nasdaq. Abigail doolittle in new york, thank you so much for that update. Mentioned, a lot of Earnings Report cards over the past couple weeks from the biggest tech companies, apple alphabet, microsoft amazon. The majority have beat on revenue and earnings. What is the mean for the health of tech stocks, can they keep it up . Joining me, tom, great to have you here. Can tech stocks keep up with this optimism . Optimism is real, the big changes happening in the ecosystem are these moves to the cloud. Anytime you see 50 growth year over year in the u. S. , Large Enterprises starting to move, that drives operating income and growth. Emily so it is worth it . Tom in the private markets we version, when you had me on the show 18 months ago, the theate market valuation, same company in the private markets was twice what it was in the public. That is no longer the case. Emily you talked about a spike in venture debt. Why is that a trend . Tomasz one way is to raise equity dollars. They invest dollars to buy shares and that dilutes the company. We by 25 of the company. But there is a recent trend where companies borrow. It is happening more and more and growing faster than equity investment. That is because this kind of forncing is nondiluting founders. As Companies Stay private longer and longer, like uber, 10 years before they go public. Instead of raising that preipo round, they raise about 2 billion a day. Emily when you talk about private companies reverting to the mean, are and airbnb an exception . Tomasz they are. Emily are they the only exception . Tomasz no. What i mean by reverting to the mean, Exceptional Companies will command exceptional prices. Two were year two or three years ago many were demanding exceptional prices. The middle class of companies are not growing as fast, are not as iconic. Companies isthose lowering. Emily is it a reckoning . Tomasz no, a slow correction, not as dramatic as 2000. Added. Jobs report you have the chairman of alphabet say he does not think robots will take all our jobs. He said, i will not take the position because no one knows the answer. Well we have a tremendous dislocation and jobs, i am not you agree with him . Tomasz when the first dishwashers came out, it was the first robot in the house. People were terrified dishwashers and businesses would be out of a job. But we still have half a Million People with that job. With thea Panel Chairman and tesla. There are as many people employed per car produced in the tesla factory as in any other factory in america. What ends up happening with machine running automation, it is not that we have fewer jobs read but that humans do changes. We focus on more interesting, cerebral work, as opposed to more manual. Emily lets talk about self driving cars, uber and alphabet are in the middle of a lawsuit over whether or not technology, i. T. Was stolen. If self driving cars are a success, what is the mean for these people who have been building cars in the first place . And driving them . Tomasz there are five stages of automation. We will not get to that in 15 years. Emily we will still have to have steering wheels. Tomasz or companies that offer to drive trucks with remote controls, like we drive drones in the military today. It will be another 15 to 25 years. The idea is that during that time, people will be able to learn new skills and still be employed. It is not a discontinuity where tomorrow, 19 million cars sold in the u. S. Each year will suddenly become a fully automated and everyone will be without a job. It is a much more gradual change. Emily what are the new skills . Eight imagine driving trucks at the same time instead of one. The gig economy is fragmenting labor. One thing we are pursuing inside our firm is a new forms of education. More vocational education. What those skills are going to be is still to be determined. We are hopeful that as we invest and build the next generation of educational institutions, people will be ready. A trend, automation is private companies are reverting to the mean, where you see the most potential . What you putting your bets on . Tomasz Machine Learning and artificial intelligence. We have been working on speak recognition. We believe speech recognition is the new form of humancomputer interaction. You can speak three times faster than you can type. It is more convenient to speak to a computer. Another big area of focus is machine translation, wondering which to another. Computers can do that better than humans. We are continuing to look for investments in that kind of way. Emily you are here a year ago. What it will be what will we be talking about a year from now . Tomasz very big ipos. We have seen Nine Companies go public through may. At a twotime space since last year. Airbnb, mostnd things point to those being two years out. Point, they will go out. You still have interest. Recent markets have shown that there is a lot of appetite for highgrowth technology companies, the average gain is 35 . , so lots ofe open companies will be going out at the same time. Emily thank you so much for joining us, great to have you. Coming up, is Warren Buffett saying byebye to big blue . Why the investor is cutting his stake in ibm. Bloomberg techs Live Streaming on twitter weekdays 5 00 p. M. In new york. This is bloomberg. Emily ahead of its annual shareholder meeting, Berkshire Hathaways ceo announced he would be ceo Warren Buffett announced he would be tricking his influence. One point trading at its lowest level since november. Johnson i bring in cory in new york. What is your read on this . Cory the fundamentals of ibm are not the kind he likes. He is not afraid to step into a business to turn around and make progress. If you look at ibms progress his first purchase was of a lowerlevel. He bought a lot of stock when it was at its alltime highs in 2012 and 2013. It has been a money losing position for Warren Buffett, a difficult one. The corporate results reflect a business that is contracting, not growing, which is what buffett wants. Emily how much has he lost . Cory we do not know what he has paid for the stake itself. Fundamentally, it is a s business. F ibm if you look at the sales figures, they have been drinking every year. Grow the bottom line. But if you look at the even audit growth, there is not been any. It has been falling 5 , 7 , 11 . It is not only getting worse, but worse faster. That is a great concern and not the type of business he wants to be involved in. Emily buffett said in the past he does not understand technology. He has a stake in apple but does not own an iphone. In fact, he has a flip phone and is quite happy with it. Does this prove maybe he should not be investing in a sector he does not understand . Cory really what he does not understand is the valuation of tech stocks. Stocks that are valued on what they have yet to do as opposed to what they have been doing. Intrinsic value and the Free Cash Flow generation from the business is always at the cone. Have been covering technology so long, it is hard to believe companies that have not done anything yet. It is hard to do it venture capitalists do. To discount future cash flows. There was a clue however that it was not his kind of company. When the annual letter comes out from berkshire hathaway, i have gone to to a quiet room on a saturday morning to go through the letter. Heot to a section where talks about the kind of businesses he likes and is not. I think we have the exact text of the letter available. He talks about how he and charlie look at the stock market. Charlie and i cringe when we hear analysts talk about managers that make the numbers. Business is too unpredictable for the numbers to always be met. Ibm always makes its adjusted number. They talk about that in press releases to journalists. But the stock tends to suffer because they focus on making adjusted numbers, not making the business any better. That was the clue that Warren Buffett had given up on ibm. Emily cory, our bloomberg editor at large in new york, thank you. Coming up, youtube betting big on original content to round up ad dollars. We bring you the latest from los angeles. This weekend we bring you our best interviews from the week. Tune in this saturday for the best of bloomberg tech. This is bloomberg. Emily a story we are watching, city analysts wrote a note on apple acquisitions. The targets, netflix, disney, hulu, tesla. They said netflix would be apples best bet. The iphone maker could use 1 3 to buy netflix, and 2 3 for buybacks. Youtube is planning to expand original content. They are getting even bigger. A halfy the announced dozen original Series Available for free on the worlds most Popular Video website. The alphabetowned Company Hopes to attract viewers and advertisers. Here with more on the expansion plans. What do you make on the reality is succeeds . My first take was, oh no, more tv. My friend said the handmade scale is great. But now i have to subscribe to hulu, too. Thethey invented video on internet. Push by thema huge in the last year or so. They have 35 channels coming out, a typical cablelike bundle they are offering. Withave youtube red original programming for 10 a month. Some you will be able to watch for free. It is a big push to captures some of those original programs. Googlebig picture, crushed print advertising and this is their chance to bring analytics to the tv world and get that revenue. Interviewed the youtube ceo toward the end of last year and asked her about her vision for the future. She said she imagines the youtube will be a platform for all of these different Media Companies. Take a listen. If you fast forward 10 years, you will see a new generation of Media Companies that have strong followings, are able to create amazing content. They will global, interact with their fans in all sorts of amazing ways. I am looking forward to being part of that. Emily we know anything about the numbers . Can youtube or is youtube competing with netflix, hulu, amazon . Can they give them a run for their money . Chris no doubt about it. These online Video Companies are promoting their wares. A lot of amazing technology, targeted advertising, tracking every single viewer. We see a dramatic turnaround even for youtube. Just a month or so ago, big advertisers were canceling. There was controversy, they did not want their ads placed next to beheading videos. Johnson, is now an advertiser for a big youtube show. They are embracing online advertising. With all this spending, you will see viewers. Emily how is it different from what you to have done in the past . Chris they had a push five years ago to produce 100 million to produce original content. This time there is an effort to create content with people that have both online followings and traditional followings. Ellen degeneres, for example. A lot of this is timing. This is the Tipping Point this year for online tv. Emily comedian kevin hart, a lead ellen degeneres, others will be producing these scripted shows. You will be charged and watching all the new original content out there. Thank you so much. Coming up, we bring you the top tech headlines of the week, including the possible criminal probe into uber. If you like Bloomberg News check us out on the radio and sirius xm. This is bloomberg. You are watching bloomberg technology. Lets start with the check of your first word news. French president ial candidate Marine Le Pen was pelted with objects at a local cathedral. Protesters are mostly supportive of emmanuel macron. Coveragering special of the french president ial election runoff result on sunday. Activist with the Environmentalist Group greenpeace unveiled a banner from the eiffel tower contain the French National motto. It was removed after 45 minutes. A conservative cleric running thepresident of iran, said nuclear deal with the u. S. Must be respected. They said despite issues that exist, the deal should be considered legitimate. Are hoping to in florence, italy, European Commission president opened his state of the e. U. Address today was a direct swipe at britain. I made a decision between english and french. [applause] surely, english is losing importance. [laughter] ahead of formal talks for britains exist on the block from the e. U. Will negotiate with the u. K. In full transparency. He meets with President Trump in brussels may 26. The e. U. s chief negotiator responded today to claim that the block is responsible for uncertainty leading up to the brexit. The only calls of uncertainty is brexit. The only way to remove uncertainty and to protect rights properly is through article 50 agreements. He also said before trade negotiations begin, he wants to ensure the rights of People Living and working in the u. K. Antie. U. German chancellor Angela Merkel is standing tough against President Trumps demand that germany pay more for natos defense. Nato countries are decided to contribute 2 of their Gross National product on defense. Germany includes foreign aid in that total, but mr. Trump does not. Merkel says she stands by her countrys spinning approach. A deal to set up four state zones in wartorn syria goes into effect today. Is still between russia, turkey, and iran would ban military action in those areas. From washington, im alicia parenti. This is bloomberg. Emily this is bloomberg technology. Im emily chang. Earnings season is just about to wrap up and almost all of the tech giants have reported, including apple and facebook. Next week, we will get scott numbers stock numbers. To break it down, we have our bloomberg tech editor and are bloomberg tech reporter. Lets start on apple. Shares ended up 4 . There is concern about the iphone, but there is optimism about services. What is the big takeaway . The actual number of iphone compared to the year before, but the iphone revenue went up, which means they sold that a lot of people bought the high end iphones. That bodes very well for the new iphone coming up later this year. From that point of view, it is good. Could you add in the services business, which means if you dont buy an iphone, you may subscribe to apple music, download apps. Uply he also played wearables. [no audio] away,is not going to go they are still working on it the air pods especially, you could have a lot of new Technology Based off voice interactions. Emily lets talk about facebook. The biggest concern is that they are running out of space in the core apps mark. Issues about these violent content and what they are going to do to police that. They said they are going to thise the ad load, but at point, it was not news. Their deadly trying to want the markets about that incident are going to calm down. On the other hand, i think people are really excited about inst