Amazon, Intel, Sandisk Report Earnings on Heels of Disappointing Alphabet Report

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This is Bloomberg Businessweek Daily. Reporting from the magazine that helps global leaders stay ahead. With insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily Podcast. With Carol Masser and Tim Stenebeck.

We got to just kind of recap what we've been seeing because right now Amazon, not as down as much as it was earlier, still down about 6.2% here in the aftermarket. And we're taking a look again, some of the headlines when it comes to Amazon. Still sees a year cash capex about $ 220 billion.

Sees fourth quarter net sales $ 240 billion to $ 247 billion. Street estimate was for $ 244.

52 billion.

And then again, some look at the third quarter backward. AWS, of course, Amazon Web Services, net sales, XFX currency up 39%.

The estimate was for a gain of up about 38%.

But again, investors not totally loving what they got from the company.

Not totally loving what they got from Intel either. Shares for Intel down more than 20% right now.

This after.

Its revenue forecast missed analyst estimates. It was hurt by sputtering demand for PC processors and supply chain problems with its.

Lucrative data center components.

I want to bring in Kunjan Sabani, Senior Semiconductor Analyst for Bloomberg Intelligence. Kunjan, this stock was up 150% going into today's print, but still a 20% haircut is a big haircut no matter which way you look at it.

What's your take on this print?

Yeah, I mean, look, the massive misses on the 4Q guide is just, very surprising. We all knew that the PC market is not looking that strong, but the results that came in are again surprising. At least from what we have seen so far, it looks to me that the data center, which was a beat, is looking strong, but they cannot get enough supply there to sell more into the data center. And the headwinds from the PC are large enough that Whatever they are able to get more supply on the data center side and get a bead, it's not large enough to offset. One more key important point here is that gross margin miss. That's very substantial.

We finally had Intel getting to sort of the mid 40s after a few quarters of really good work. And so we are back down again with almost 600 plus basis point of a decline quarter over quarter.

That's substantial.

We think that's again coming from Intel trying to get more supply and push more on the data center side. which is where the future is. But that comes at the cost of lower margins, loading up the factories on the new nodes, which are, again, a headwind to the margins. And the PC business, which is a better margin business, not doing so well. So the mix of combinations between data center and PC is not helping Intel.

Yeah, Kunjan, you know, what's interesting too is, you know, is it a case of that if they could get all the supply they needed in order to meet demand, we would be having a very different conversation today? Or is it more than that because of what we're seeing on the PC side?

Look, if they were able to get more demand on the data center side, on the revenue line item, we would not see such a big deviation. It would still be able to offset the weak demand in PC. But I think we would still have seen some headwinds on gross margin. Remember, Data center products, the more they ship right now, it's a headwind for gross margin because it's a lower gross margin. They are loading it all up on the newer nodes, which are much more expensive until you reach a certain point where it starts being more profitable.

So we would have seen less of an impact on the top line, but still an impact on the gross margins.

You know, it's interesting.

We had a conversation earlier with one of our guests here at Schwab Impact in Boston, and This kind of concept of, you know, you kind of have to invest for the future so that if you look at a company like Alphabet, which just got creamed today in today's session, if you think about the market cap drop that it endured, that this whole idea that you're investing in the future of Alphabet, and if you believe in the course and the impact of AI. And I do wonder about Intel.

Have they righted the ship, made the changes they need for an Intel of the future, and that investors need to be patient here?

I think investors do need to be patient, and they have been patient. Look, they are investing here for the future. Investing to bring up capacity in the data center and focusing on the data center is the right choice because that is the better, faster-growing end market in the future. And the North Star for Intel, again, remains that foundry business, which they've done a lot of progress on. You look, you are in an environment where every single one of your peers is beating by billions of dollars. You know, they are guiding up their revenues multiple times in a year just for future years. Folks are giving guidance more than two years out when it comes to your semi peers.

So there's also that peer pressure.

Right.

So for investors, when they're looking at other semi companies which are giving such robust results, both in near term and outward guidance, it's just difficult to stay patient when you see such hiccups.

On the way.

All right.

So top question that you think has to be asked on this call with analysts and investors from the Intel C-suite.

I think two questions, right? When do we really expect sort of the gross margin trajectory to really find a floor? We have seen this repeat a couple of times where we see positive progress on gross margin and suddenly we hit a quarter where we sort of, you know, take one step forward and two steps back. And I think the second question remains, like, how is the progress going on the foundry side? we have seen a lot of announcements as positive announcements around packaging and their packaging technology is really differentiated we really want to start seeing significant material revenues come out of that business.

Is there any other semiconductor name that we should be watching as a result of what we're seeing from intel just real quickly.

Yeah next week amd again amd is also exposed to the similar pc head markets but We don't think they will do much worse because of their exposure and share gains, but that's something we'll be watching carefully.

Stay with us.

More from Bloomberg Businessweek Daily coming up after this. I want to bring in Anurag Rana, senior tech analyst at Bloomberg Intelligence. He joins us from our Chicago bureau. Anurag, we just spoke to Kunjan about Intel, shares of Intel down, wow, close, you know, 20% at this point. Amazon are down lower in the after hours right now by 6.7%.

Your takeaways from this print?

Yeah, I mean, when you look at cloud results from both Google and Microsoft, we saw a big beat on the growth rate. I think in the case of Amazon, they just went ahead and met the expectations at 39%. So basically, you know, that is probably what's causing the shares to go down. But I'd also point out to one particular thing that they said, they're expecting AWS sales to be above 40% into 27 and 28. I think that's a very, very strong numbers given where we are in the cycle. So I think in my view, people are maybe disappointed that they didn't beat AWS by a big number. But from our side, I think we really like those 40% numbers.

Yeah, it's interesting too. Amazon in total sees revenue growth rates of over 40% in 2027 and 2028. Free cash flow falling to an outflow of $ 42. 4 billion.

Wow.

Repeat that?

Cash flow fell to an outflow of $ 42. 4 billion for 12 months, I guess, trailing.

For trailing 12 months? Yeah. Wow. So, I mean.

Anna Rourke, how do we make sense about the spend? You need the spend to be in it, right? These guys obviously have the money to do it, but they're increasingly tapping credit markets and debt markets, as we've often talked about.

You guys still seem pretty upbeat.

Yeah, but think about it this way.

You have to invest that money because imagine the backlog that's on their balance sheets. And it's not as if they don't have really strong businesses that's driving revenue from them or cash flow from them from other side. I mean, this AWS, think about it this way, has operating margins close to 39%. That's a very good business to be in, frankly speaking. And once you gain some market share, you're going to go out and sell additional services, application modernization.

I mean, we're just in this.

start of this particular cycle. And I understand that, you know, cash flow is down this year. But frankly speaking, you look ahead, I mean, you know, from the run rate of that they have for cloud, let's say about $ 180 billion, growing 40% each year. That's really commendable.

Is there a narrative around all of them?

I just think about what we've heard from Meta, from Microsoft, from Alphabet, from obviously Amazon today as well.

I'm sure I'm leaving out one of them.

But they're not all the same companies, Anurag.

We know that.

But is there a narrative around the AI spend and the payoff or no?

It's not a question of payoff.

I think what has changed in the last, I would say, six months or so are twofold. One, is that interest rates have gone up quite a bit. I mean, you're looking at you know, people's ability to fund these expansion plans.

So that's one.

The second is a changing political climate, which is seeing some opposition to data center buildup. So, you know, we all know the CapEx numbers right now. But what if the data center delivery becomes a delay? Then what happens is the cash flow is still negative and your growth rate that you are projecting out doesn't realize because of factors that are not in your control. We saw Microsoft talk yesterday about there was a delay in data centers from one of their third parties.

That's the first sign we have.

What if something like this happens a lot next year because the political climate is extremely negative towards new data center build?

Stay with us.

More from Bloomberg Businessweek Daily coming up after this.

All right, everybody.

Yes, indeed.

Back here at Schwab Impact 2026, Bloomberg Business Week Daily. Carol Master, Tim Stenevik, live here in Boston. Let's get to it because we've got some earnings already crossing.

You want to start with Amazon?

I want to start with Amazon.

Third quarter net sales coming in below estimates at $ 201.

9 billion.

The company, though, for the outlook, sees fourth quarter net sales 240 to 247.

Estimates for $ 244. 52 billion. Fourth quarter operating.

Income $ 28. 5 to $ 33. 5 billion.

The estimate was.

For $ 32. 99, so smack dab in the middle of that. If we look back, third quarter North American net sales coming in just shy of estimates at $ 112.

85 billion.

Third quarter earnings per share coming in below estimates at $ 1.

89.

Third quarter AWS net sales coming in just above expectations at $ 45. 98 billion. Shares in the after hours right now are cratering. down 10%. Remember, they were down 4% in the trade. Amazon stock down 10% in the after hours right now. Third quarter AWS net sales, excluding FX, up 39%. That does beat estimates at 38%. The company sees revenue growth rates of over 40% in 2027 and 2028. They see fourth quarter net sales at 240 to 247 billion.

That's just in line with estimates that we're at 244.52, so within the range there. The company sees 2026 cash capex to be about $ 220 billion. Shares continuing to move lower in the after hours, down 11.5%.

All right.

So I'll see your 11% and raise you down almost, actually down about 17%.

What is going on? Is that Intel?

That is Intel.

So let's go over to Intel, which is also dropping here in the aftermarket. Here's the number that's caught everybody's attention. Intel seeing fourth quarter revenue, $ 15 billion to $ 16 billion.

Folks, that is.

Short of what the street's been expecting.

They have been looking for $ 17. 05 billion. So revenue disappointment over the fourth quarter. See's fourth quarter adjusted EPS 25 cents. The street estimate is for 43 cents a share.

So that... is a big shift to the downside.

Third quarter data center and AI revenue, 7.32 billion. That is above the street estimate of 6.67 billion.

Again, we're looking at the quarter that was.

Also, third quarter adjusted free cash flow of 1.64 billion. The street was looking for about 2.98 billion. So that looks pretty disappointing. Fourth quarter revenue, we talked about that headline. That's the disappointment, though. $ 15 billion to $ 16 billion. Again, the street looking for $ 17.

05.

Let's go to some other numbers. Fourth quarter adjusted gross margin. Again, outlook for Intel specifically. Fourth quarter adjusted gross margin looking for 38%.

Street was looking for more profitability from the company.

42.8% for that fourth quarter adjusted gross margin.

So there's some disappointments.

Also, the company is saying the PC market to decline into the second half of 2027. Intel says, we've heard this before from the semiconductor space. Intel says it's unable to meet all of strong server chip demand.

It's working to improve server supply issues.

Says the server chip supply hit by a fire also at an Israeli plant.

So getting into some stuff.

Shares are down more than 20%.

Oh, my God. Talk about a haircut.

But.

Hey, you know what?

You know who owns Intel?

You do. I do. I do. But here's the thing. Going into this print, it was up 150% this year. Yeah.

You're looking at a PE of 106.

So the expectations were high.

Losing a fifth of a share price in any company, a fifth of market cap is a haircut. But the only thing I will say is they were going into this I mean, incredibly strong there.

Absolutely.

Here's, you know, our Ian King, he's our go-to when it comes to all things Intel, has seen this company go through so many different cycles.

Here's what he says.

Intel gave a revenue forecast that fell short of analyst estimates, hurt by plunging demand for its PC processors, and struggles to keep up with demand for data center components. The company projects, again, the PC market slump will persist through at least the.

First half of 2027 and decline....

Following a slide in 2026, this year, Intel shares we know are getting slammed, despite the company being optimistic about demand for its products and increasing spending on new equipment to boost production.

But again, Intel shares down 20% in the aftermarket.

That's massive.

So we have Amazon shares down as much as 10%. We have Intel shares down more than 20%. Now we go to SanDisk, down about 3.5% in the after hours. In terms of what's actually happening, the company sees second quarter revenue $ 12. 2 to $ 12. 6 billion. The estimate was for $ 12.

1 billion.

So that outlook coming in above estimates. First quarter adjusted gross margin at 85.1%. That beat estimates of 84.5%. First quarter edge revenue coming in at $ 5.

83 billion.

The company sees adjusted gross margin 84.5% to 85.5%.

Just a little shy of 84.8%.

Okay, so right now investors have shares of SanDisk down about 3% here in the aftermarket.

So a little bit lower here over some disappointment.

It's up 460% this year.

Yeah, I mean, Western Digital, SanDisk, they are mega outperformers here in 2026. Let's see what Jake Silverman has to say. He's a semiconductor analyst with our Bloomberg Intelligence team joining us.

All right, Jake, take it away.

Stock's down about 3.3% here in the aftermarket.

What jumps out for you in terms of the earnings release?

Yeah, I think really what it comes down to is just the guidance. While it is a little bit better than estimates, it's not necessarily blowing it out of the water like it has in the past quarters.

I know last quarter was a probably a little bit more reminiscent of that.

But ultimately, at the end of the day, what really matters more so is signing more of these data center contracts, signing more long-term contracts with customers in general, and then also seeing the duration of these contracts, what the minimum pricing is, as well as some.

Deposits as well.

So all those KPIs are going to be a little bit more important than I think what the company is guiding to this quarter or next quarter.

So that's really the key takeaway.

I think investors are really focused more on the long-term durability of the NAND cycle as opposed to near-term numbers.

Interesting miss when it comes to cash and cash equivalents, though, for the first quarter that missed the average analyst estimate. Cash and cash equivalents came in at $ 5.

14 billion. The estimate was for $ 9. 39 billion. Do you care about the balance sheet like that?

We certainly care about the balance sheet, but it's more so about long-term health. How much capex are they actually spending in order to increase their capacity? Right now, there's not really an ability for them to spend that much in order to bring up the capacity that they need to meet their demand. Ultimately, what we're thinking about for cash long-term is how they're actually deploying it as well with capital returns. If you looked at Samsung and SK Hynix, who reported earlier this week, some of the key focus for investors were buybacks, dividends, even special dividends. And so looking at the balance sheet cash in isolation maybe isn't the best tell of whether or not the company is performing well.

Well, on that, we should also point out that we saw Sandisk actually announcing a stock split effective November 19th, announces an eight for one forward stock split.

Jake, no surprise.

Just got about 30 seconds here. No surprise considering the run-up we've seen in the share price.

You know, not ultimately.

I think investors are still kind of looking for really sizable beats and raises. But in this environment with NAND pricing, it hasn't peaked, at least in our view, over the next 12 to 18 months. But it's certainly limited room for continual increases. And we think some of these sequential price increases are going to be somewhat more modest going forward.

But Ultimately, we think that the cycle still has a ways to go and there's probably going to be some reduced volatility from these long term contracts and more confidence from investors around increased deposits, longer term duration of these contracts.

Stay with us. More from Bloomberg Businessweek Daily coming up after this. We are live from Schwab Impact 2026 in Boston. And truly somebody who needs no introduction.

Oh my gosh.

Is on set with us right now.

She's a legend.

She's a favorite, not just for us, but we know for all of you too. Lizanne Saunders is Chief Investment Strategist at Schwab. She's on site here at Schwab Impact 2026 in Boston. I don't know, when.

You look at the board, gosh, where should we begin? Like, what is the most important thing? Like, we're talking earnings right now. We're looking at Intel and we're.

Looking at Amazon.

We're looking at SanDisk. We had a Fed meeting this week. We had the S1 from Anthropic. What is interesting to you right now?

Well, it's getting a little sketchier, and there's less tolerance for misses. What I think is interesting is a lot of these companies that are then perceived to have missed based on stock action, in many cases, the companies beat the sell-side consensus published number. But they arguably undershot the buy side expectation, the unpublished, what we used to call the whisper number.

Yeah.

But that's enough to really hit the stocks. It happened to Samsung a few months ago, which then took the Kospi down with it by 40%.

Is there something that signals where we are in a cycle when we see a knee-jerk reaction like this?

Well, I think.

You know, the CapEx story arguably is not super late cycle, but we're at the part of the cycle where, of course, the questioning is about the chase for capital, the cost of capital. Are the revenue assumptions too lofty? And what is the spread between the cost of capital and the return on invested capital?

Which investors should be asking, right?

Of course, of course.

Yes.

And there's a more discerning lens being applied to the market right now.

You're not seeing, we'll have.

To see after the combination of Amazon and Intel and SanDisk what tomorrow looks like. But for now, you're seeing many of these companies or stocks of companies getting taken out to the woodshed, but it's not happening in an aggregate sense. So it's very targeted at the misses. Whether it is something that spreads... I don't know.

What would you have said if I said to you two years ago that we're going to see a handful of the Mag 7 not have positive free cash flow in two years?

I think the expectation would have been for worse performance than what we have seen.

So they're not being punished as much as you think they could have been?

I think where we're seeing punishment is the lower quality companies that in this chase for capital have less opportunity to capture that capital. And that's why you're seeing a much greater amount of dispersion as you look at quality type attribution or factors, especially when you go down the cap spectrum. Like the last year, the non-profitable Russell 2000 stocks We're up twice as much as the profitable. This year, as of last week, because I only look at this on a weekly basis, the profitable stocks are about 20%, handily outperforming the S & P. And they're small caps, but they're profitable. The non-profitable, about flat. So a 20 percentage point spread just based on profitability.

So that's where you're seeing.

You have to look under the hood of the cap weighted indexes these days to get a true sense of what the market is doing. And that's where you're seeing the connectivity to all of these macro concerns, capital raise concerns. You are seeing it in terms of how individual segments are performing.

What's your take on the bubble conversation?

I don't think it's a bubble akin to the late 1990s. That was a valuation bubble because all the growth was in the P, there was no E. So you had no denominator in the equation. This time, the E has been growing faster than the P. Where there might be a bubble is in forward expectations, the longevity of this cycle and the concern about extrapolating. So I think there might be a little bit of an expectations bubble, but there's so many differences. Back in the late 90s, It was a build it and they will come. You know, by 2001, you still were only utilizing 3% of the fiber optic cable that had been laid. This time we've got, you know, supply trying to chase demand. But now even questions about how sustainable is the demand.

Right, because the demand, the ROI, right?

Is it going to make sense for everybody in my, you know, if I run a company for all my employees to have access, what's the cost of it?

What's the return?

Right.

And there's a recent estimate I saw for the data center operators, how much revenue they need to generate over the next four years to kind of make it make sense. And it was a number of somewhere around $ 8 trillion. Yet the estimates for what the revenues are going to be is less than half of that. So that's where I think people are starting to do a lot more math to figure this out.

Speaking of math, let's do some math with Anthropix S1. It was remarkable just to see the numbers in there for a company that started in 2021.

You know I can't talk about this.

I'm not going to ask you specifically about this.

It's a big picture question.

What does it mean when a company goes public that is only a few years old, And it already has a valuation of $ 1. 5 trillion or $ 2 trillion. We saw this with SpaceX earlier this year. But that was a different case because SpaceX is as old as Meta.

At this point.

Anthropix, not.

We've never seen companies this large that are private. It's part of the reason why there's so much enthusiasm about access to... private companies and the private markets. There's a risk associated with that too, but there's also the concern, and part of the reason why you're seeing more dispersion in even just the performance of some sort of AI cohort, much more dispersion in performance, having to do with concerns about the crowding out. When you bring these big, very popular companies public, does that crowd out investments in other areas, especially in what has become an unbelievably rotational market? I mean, metrics associated with that are breaking records. And what we ultimately saw with SpaceX is you didn't get a big

run after the launch. I'm not going to opine on whether we see that with Anthropic.

But that rotation, that's a good thing.

Yeah, all else equal, I think it is a good thing. I think what is unfortunate is there's a lot of investors that think the key to success is trying to gauge what the next shift in the rotation is going to be in advance.

That's a fool's errand.

I think, if anything, what these rapid-fire rotations tell you to do is maybe consider rebalancing based on what your.

Portfolio is telling you.

A lot of rebalancing structures are based on the calendar. It might be semi-annual or it might be annual. Take advantage of these rotations by maybe rebalancing a little more frequently and stay in gear by essentially reacting regularly. So taking profits when you get a big run on the upside, whether it's in a cohort or a sector or a group of stocks or even a broader asset class, add into what is underperformed. That would have served really well in this latest rotation back toward more traditionally defensive areas.

Real quick, 2027. Give us your outlook very briefly.

Okay.

I think that we're likely, base case from an economic standpoint, is that we continue the rolling nature of this cycle, where you get rolling recessions and rolling expansions happening simultaneously, allowing the avoidance of a full-blown aggregate recession. That helps to explain the rotations that are happening. Base case, I think a rotational market persists, at least in the.

First half of the year.

It's pretty amazing, right, how that continues to happen.

It's been a wild ride. Stay with us.

More from Bloomberg Businessweek Daily coming up after this.

Okay, I've been looking forward to this one for a year. We're super excited. I think it's fair to say.

I don't know why we don't have him on more often.

All right, let's just go right into Mike Townsend.

He's Managing Director of Legislative and Regulatory Affairs for Charles Schwab. He's a political analyst based in Washington. He also hosts Schwab's Washington Wise podcast.

He is a real.

Washington Insider. He joins us here in Boston at Schwab Impact 2026.

Happy almost midterms. Almost. Five days to go. Okay.

I'm going to put you on the spot. Start with your prediction. What happens Tuesday?

Sure.

I think we've moved from can the Democrats win the House to by how much will the Democrats win the House? So I think we're reasonably talking about a A double digit margin, 12, 15, something like that. So I think that's the most likely outcome in the House. I'm 85, 90 percent there. I think the Senate is where all the intrigue is. And I've been telling people we have nine Senate races within the margin of error. And those could, you know, go a little bit one way, a little bit the other way. You could be looking at a radically different.

Or they could all go one way or all go the other way.

Yeah.

I mean, that happened in 2024 with the presidential election, right?

Yeah.

The momentum seems to be with the Democrats, right? But, you know, some of these races, Iowa's Senate race, you know, the average poll is like 0.4%. It's meaningless. So it's tied.

And we'll see which way they go.

What does it mean in terms of if indeed it's a blue wave. And maybe, so we're talking maybe even the Senate. What does that mean in terms of the business environment, the market environment?

Yeah, look, I've been telling people on the market environment for months that, you know, the history of midterm elections, if you look at the three months leading up to a midterm election, S & P 500 is up an average of 1.7%. It's basically flat, which is not surprising, right? Elections are a big source of uncertainty. But three months after a midterm election, since 1974, this is just midterm elections, the average S & P 500 performance is at 5.7%.

And six months after an election, it's 12.4%.

And it has never been down since 1974.

Right.

What changes?

So my point is that. the markets don't care who wins. The market just wants the election to be over. Because once the election is over, the market can make some assumptions about what the landscape will be over the next couple of years.

But will it be over right away, Mike?

There's the question. Okay. Yeah.

I mean, obviously with Alaska being part of the Senate mix here, even in a normal Alaska year, we will probably be talking about a.

Day or two.

And if that's decisive, we could You know, some of these races are incredibly close. We could be talking about recounts and that sort of thing. So it could be a few days. You keep talking about the polling being so close.

And what did you say?

Nine Senate races within the margin of error. If you look at prediction markets, though, they are overwhelmingly favoring Democrats in states such as Texas.

I mean, if Tallarico.

At 68 percent chance of winning on Talshi right now in Maine, Troy Jackson at 61 percent, El-Sayed in Michigan at 73 percent.

Should we believe these prediction markets?

I think they're interesting, and I'm going to be really interested in how they perform in this election because I think that'll help give us more data. The reality is that there's quite a lot of money at stake in the big picture question. Will Democrats win the Senate or not? Money at stake in what sense? In cow sheep, right?

Making it accurate. Making it more accurate. Some of these races, the individual races, don't have a ton of money into them.

You have a background in politics. You worked for two main senators. Is it fair to say that because prediction markets, maybe you can answer this question for us Wednesday or next week, because prediction markets take into account all the polling and look at that entire environment, and they do have money behind them, that they could be more accurate than the polls?

Well, I also think they take in more than polling, right? There's kind of a vibe to it. That's part of the sense that momentum is going that way, right? So that's part of it. But you talked about Texas, right? I mean, We've been down this road before in Texas, right? Better a rook can tell you all about it.

Absolutely.

I mean, Texans have not elected a Democrat to the Senate since 1988. So I keep saying I'll sort of believe it when I see it.

Do you believe Texas?

I think James Tallarico, the Democrat nominee, is a very talented candidate, and he's raised incredible amounts of money. Ken Paxton, the AG, who's the Republican nominee, not the most dynamic campaigner.

Some people might call him a flawed candidate. And quite a bit of baggage, shall we say. So this is a pretty unique environment for the Democrats, and yet it's still Texas.

So I want to ask you, I'm already thinking about not, yes, next week, but also two years from now, the next presidential race, and thinking about that.

That's an important one. And I wonder what that's going to tell us about politics in America.

Absolutely fascinating to me.

To me, the 2028 presidential is kind of an existential election for both parties, right?

No incumbent on the ballot. Democrats have to.

Figure out a way to articulate a forward-looking vision, right? You can run a midterm on we don't like Donald Trump and then.

That's what's happening, right?

But they have to articulate a forward-looking vision and figure out who is going to do that because there's no obvious Democratic messengers On the Republican side, they have to figure out what is life in this party after Donald Trump. And I'm fascinated with the idea that what you and I would call years of mainstream Republicans, do they sort of wake up and go, That was weird. Let's go back to things that we've talked about for 100 years.

I think that ship sailed in 2024. I think it did. I agree with you.

But Republicans have to figure out what they are after Trump.

Yeah, the post-Trump question, right? Is it J.D.

Vance?

Is he going to be the standard bearer?

So I'm skeptical that he may be the standard bearer. If that's the case, I'm more skeptical that he could win a general election because I'm not sure that the sort of Trump... voter just automatically goes, oh, it's J.D. Vance.

I think many of those Trump voters are uniquely Trump.

Are you saying that the president is a once-in-a-generation political personality?

I think he is.

I think he is for all these kind of strange reasons that we've maybe never experienced before. But I don't think it is a slam dunk that J.D. Vance is the nominee or is the winner.

Is it time for something beyond just two really main political parties?

How do you see it?

Sure.

I mean, you know, we talk about this all the time. And I've been traveling all around the country this fall talking to investors. And the most common thing I hear is, ah, pox on both the parties, right? They just want to, like, can't we get something else, right? But that sort of sentiment doesn't turn into a third party sort of, you can imagine, or an independent candidate. It just hasn't worked that way, and I don't know that it will.

Mike, what about the grift that we've seen in Washington? Alleged. Alleged.

Grift.

Okay, but I think it's fair to say.

Is there such a thing as alleged grift?

I don't know that there is.

I don't think we've ever so visibly seen an administration and a president who has business assets that are very clearly, you know... in the midst of changes in policies that are impacted very clearly. So I just do wonder about grift generally in Washington. And to be fair, both parties and the ability to trade stocks and obviously have inside information.

And that's been a thing that's been going on for years. So does any of this change going forward?

I feel like.

Let me give you a fascinating story from this conference. So you're probably aware there are a bunch of students here who are sort of learning about finance from finance programs all over the country. I talked to a student who is a junior at the University of Indiana, the Kellogg School. And one of the things he asked me, he said, I don't know any politics other than this.

He was nine when President Trump was elected the first time. And he was like, is this normal? And I've been kind of thinking about that question for two days because... He's like, yeah, this is what politics is. Like the name calling, the kind of alleged grift, all that.

And I just think, wow, that's what.

The youngest generation, the newest voters, they just think this is how things operate.

I don't know if we can change that.

What did you say to him, though?

Well, I said, I do think historically we're on sort of a pendulum and you're way out here. But historically, that has come back. We've had world wars. We've had a civil war. We've come back towards the middle. I don't know if that's four years from now or a generation from now.

Incredible perspective from a young voter. Hey, before we let you go, I said you worked for two senators in Maine. One of those was Susan Collins. She's in a fight for her political life right now with Troy Jackson. Cal, she has Troy Jackson at 63 percent odds of winning.

You know her. Can she pull this off? She can. She always has.

I think she was farther behind six years ago in some of the polls than she is now, and she won pretty easily. She surprised then. I would not count her out at all. I do think, if anything, the environment, overall environment, this may.

Be the environment that knocks her out.

You know, she is the last standing Republican senator in a state that voted for Kamala Harris last time around.

And but don't count her out.

It would be pretty remarkable if she lost to Troy Jackson, given the challenges that the Democratic Party had with Graham Platner there just.

A few months ago. Yeah.

And Troy Jackson's a very, very nice, you know, ordinary kind of.

Politician.

But I wouldn't call him the most dynamic person in the world. And he didn't win the nomination. And he ended up here.

So we'll see.

I think that's more of a sort of overall environment than anything else.

Susan Collins knows everybody in Maine.

She has touched almost everybody in some way, bringing federal dollars back. Chair of the Senate Appropriations Committee, she has the ability to do that. So I absolutely think she can win.

What are you doing on Wednesdays?

On Wednesday, well, I will have been probably up all night and have to put out something before market opens.

Come on our program on Wednesday. I'd love to. Really?

Okay.

Absolutely.

We'd love to have you. We'll see where we are. And we may be at a point where we're like, I don't know what's happening. That's fine.

This is the Bloomberg Businessweek Daily Podcast. Available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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