Bloomberg Television47 min
Stocks Gain on AI Optimism Despite US Inflation Concerns
Christian Bruch, Chad Thomas, Winnie Hsu, Matt Bloxham, Mark Cranfield, Tony Halpin, Joachim Nagel, Laura Milan, Tim Clark, Benedict Hamel
Interview, Press Conference, Conference Presentation
- Siemens Energy forecasts a profit margin of 14% to 16% by 2027, potentially reaching 22% by 2030, with 2026 projected as a record year featuring a 164 billion euro profitable backlog and approximately 9 billion euros in cash flow.
- Infrastructure build-out is anticipated to accelerate continuously driven by AI, general electrification, cooling, air conditioning, and battery needs, though physical implementation speeds are expected to be lower than previous expectations and nuclear growth is projected to impact the market from 2035 onward.
- Data center demand is expected to remain resilient post-election and grow globally in regions including the Middle East and Europe, while CoreWeave expects $9 billion in customer prepayments over the next three months to fund capacity expansion without expensive debt.
- Interest rates are projected to rise before year-end with potential hikes in December, January, and one more by the end of Q1 next year if inflation remains firm, alongside a market preference for fixed income assets over equities.
- Anthropic's IPO is expected to price next week with a potential valuation target approaching $1.5 trillion, likely remaining higher than OpenAI's, which is projected to report Q3 revenue of roughly $10 billion and an annualized run rate of $50 billion.
- Monetary policy across the ECB and US Federal Reserve is expected to maintain a hawkish stance in December to anchor inflation around the 2% target, with full policy effects anticipated within 1.5 years.
- Climate objectives are projected to shift toward bilateral or small-group agreements rather than global targets at the current COP, with countries encouraged to join a 2035 target of electrifying 35% of energy sources and transitioning away from fossil fuels.
- Air travel demand is expected to continue growing in Dubai despite conflicts, though supply chain constraints regarding propulsion will cause capacity shortages through the holiday season, prompting a strategy to avoid discounting and a focus on premium cabin resurgence.
- Geopolitical and regulatory developments include ongoing U.S.-China AI dialogue, planned AI model testing channels, and an expectation that memory chip demand for older generations remains weak, creating market divergence.
- Risks identified include overrated infrastructure implementation speeds, potential inflationary spillovers from high energy prices, the difficulty of accelerating climate model accuracy as climate change progresses, and the possibility of predatory strategies by carriers in the Middle East post-conflict.