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Bloomberg Television1h 11m

Microsoft Races to Fix Outage, Stocks Slip of Inflation Test

Anna Edwards, Guy Johnson, Tom Mackenzie, Jensen Huang, Manish Kabra, Marieke Blom, Nataliia Lipikhina, Oliver Crook, Paul Dobson, Olivia Neville, Peter Elstrom, Andrea Felstead

Conference Presentation, Interview, Press Conference
  • European equity futures are projected to decline by approximately 0.5% immediately, with Euro Stoxx 50 futures specifically expected to drop 0.3%, while U.S. and European stock markets are anticipated to remain flat to negative.
  • The Anthropic IPO is fully subscribed six times with plans to raise $64 billion plus an additional $26 billion in a private placement, targeting a fully diluted valuation of $1.4 trillion.
  • NVIDIA faces increased scrutiny regarding loopholes allowing smuggled chips into China, with Jensen Huang potentially testifying before committees as early as next week and a permanent CEO search actively underway to succeed current management.
  • Colette Kress faces expected scrutiny from lawmakers and questions regarding her commitment to NVIDIA ecosystem financing, with some investors preferring to wait for Jensen Huang's next moves or keeping capital dry.
  • U.S. 10-year Treasury yields are expected to remain under pressure for a significant period, with December Fed rate hikes priced in at 110% for a 25 basis point increase, and yields near 4% viewed as necessary for AI ecosystem escape velocity.
  • Cisco and Cerebras are forecast to deliver sales results better than expected, with Cerebras shares rising 16% after hours, while Samsung considers acquiring data center or cooling equipment suppliers.
  • ASML order books are expected to remain full with demand exceeding supply for the next couple of years, though its sales share from China is projected to decline from 40% to approximately 20% over time due to export restrictions.
  • European markets are expected to benefit from the AI data center capex cycle, particularly in power generation and cooling sectors, with the Dutch economy potentially seeing 0.3% to 0.4% annual growth attributed to ASML.
  • Global markets may rotate capital away from NVIDIA into other semiconductors, potentially adding $650 billion to other semiconductor stocks, while hyperscalers are expected to see free cash flow inflect higher as CapEx ratios drop from 90% to 10%.
  • S&P 500 earnings are expected to grow double digits for the next two years, supporting a price target of 8,600 by the end of 2027, though the index may re-rate from 22 to 18 times earnings assuming yields remain near 5%.
  • A Microsoft outage affecting Outlook, Teams, and Copilot is expected to persist with over 200,000 reported issues, causing global disruptions including delayed corporate earnings and impacts on the Japanese Ministry of Finance and Euronext.
  • Two ECB rate hikes are expected within the next year, benefiting European banks, while Japan is highlighted as a high-conviction opportunity with double-digit earnings growth next year driven by corporate reforms.
  • Oil prices are projected to rise with Brent trading above $96 a barrel, and European gas futures are expected to remain elevated after a 13% rise to 95 in the last three days.
  • Specific European stocks face varied outlooks, with Richemont down over 6.5% due to jewelry unit misses, Aconia down over 4% on deal risks, and Wise Group up over 5.5% following strong 2027 guidance.
  • The AI trade is expected to continue despite the NVIDIA scandal and a slower data center rollout, provided earnings growth does not revert to the long-term average of 7% to 8%, with investors reassessing ROI and looking for diversifiers in Europe.