AI Fears Grip Stocks, Barclays Beats Estimates, More

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Bloomberg News Now 7 min 6 speakers 4 chapters transcribed 1 month ago
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What is the main topic discussed in this episode?

Volodymyr Zelenskyy 0:00
The Bloomberg This Weekend Podcast.
Donald Trump 0:02
News, politics, and the lighter side of Bloomberg.
Kim Forrest 0:06
The great wealth transfer includes $570 billion in classic cars.
Emmanuel Macron 0:10
I'm not in a position to be inheriting any classic cars. You?
Kim Forrest 0:13
No, but my brother did inherit my non-classic car when I moved to New York, so. Ew. He still has not paid me for it.
Emmanuel Macron 0:20
Coming for you, Joey.
Volodymyr Zelenskyy 0:22
The Bloomberg This Weekend Podcast. Subscribe today on Apple, Spotify, or wherever you listen.
Stephen Carroll 0:30
News when you want it with Bloomberg News Now. I'm Stephen Carroll.
Caroline Hepker 0:34
And I'm Caroline Hepker. A global sell-off in AI-related chip stocks is accelerating as investors question whether the industry's spending boom can deliver long-term returns. In terms of what's happening in South Korea, SK Hynix has now shed around $570 billion in market value since peaking in June, while Samsung has fallen more than 12% in today's trading. Across Asia, a Bloomberg index of semiconductor shares is on course for its biggest one-day drop since March. Boca Capital Partners founder Kim Forrest sums up how many investors feel right now.
Kim Forrest 1:13
How much are these companies spending and will they ever get it back, right? Is the business model sufficient to drive revenues and earnings higher? And probably at this point, we're thinking more about margins and earnings in the future, right? We don't really care about what's happening today.
Caroline Hepker 1:33
Kim Forrest says investors also fear the AI spending boom is becoming increasingly circular. Those concerns intensified after Nvidia unveiled more than $750 billion in new AI deals, including financing for customers buying its own chips. Market fears are also mounting over China's rapid progress in advanced chipmaking after reports that a state-backed company has begun mass-producing sophisticated lithography machines.
Stephen Carroll 2:02
France and Spain are preparing emergency financial aid for communities devastated by the ongoing wildfires. Spain is set to declare the worst hit areas as emergency zones, unlocking government support for families and businesses. In France, insurers will cover relocation costs for more than 200,000 evacuees, even if their home escaped damage. French President Emmanuel Macron has warned that the wildfire season is far from over. Despite signs, the blazes are beginning to stabilise. His words are spoken by a translator.
Emmanuel Macron 2:32
It is difficult because we need to see too that we are faced with a never-before-seen fire. We have a situation today which is the most difficult we have ever measured since the Second World War.
Stephen Carroll 2:45
Macron also announced support for thousands of businesses hit by the fires. Temperatures in France and Spain are due to climb back towards a peak of 41 degrees Celsius this week.
Caroline Hepker 2:55
President Donald Trump says the US and Iran are holding talks to end their conflict, but warned that military strikes will resume if negotiations fail.

Why are AI-related chip stocks plunging in global markets?

Caroline Hepker 3:04
Trump's remarks came after the US held off attacking Iran for a third day on Monday. Tehran in turn suspended retaliatory strikes on Gulf countries, including Kuwait. Speaking to reporters aboard Air Force One, Trump claimed the talks were only happening because the US had been hitting them very hard.
Donald Trump 3:23
They want to meet and we're meeting. We'll see what happens. There's a chance we could make a deal. Without what we did, they wouldn't even be talking to us. They requested a meeting through their surrogates and directly. And we're meeting and, you know, good things can happen, I guess.

How much market value have South Korean chipmakers lost and why?

Caroline Hepker 3:38
Despite Trump's optimism, the two sides have repeatedly appeared close to a deal during the conflict, only for fighting to then resume. It also remains unclear whether Washington and Tehran are engaged in substantive negotiations. Iran's foreign ministry says while messages may be passed through mediators, no formal negotiations with the United States are currently taking place.
Stephen Carroll 4:01
Just some breaking earnings news next and revenues from Barclays Investment Bank has beat estimates in the second quarter, coming in at £3.96 billion. Net interest income also beat. And the lender announced a new £1 billion share buyback.

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