Ces, next week. We will look at the decade in tech, how predictions for 20 are not as easy as some Companies Make it seem. Our top story, a good start to , dowear, the s p 500 jones, and nasdaq climbing to highs. One of the best years for american stocks in the past decade. Joining us now is abigail doolittle. Record high another for these big tech companies. What is driving the gains today. It is more of the momentum we saw at the end of 2019. Some missed out on the Fourth Quarter rally because they did it. We have Central Banks supporting markets, putting liquidity into the system. Saying it is not qe, others say it is qe. Responding. Cks speaking of momentum, we have amd, talking about today up 7 . Put ins enough for it to its alltime high. At that chart, not really stability. What goes up, must come down. Investors want in on this big tech rally. Volatility, you look for stability in the fundamentals. We are approaching earnings season. Basis,a yearoveryear declined within the s p 500. What are you hearing as earnings approach quickly . That is a good point. People are hoping the earnings recession we were in for 20 in the tech sector, that it could come to an end. The Fourth Quarter is still expected to decline. That was an area of outperformance. That is expected to show growth of 3 for the Fourth Quarter this year. Is chips, down double digits. Yearoveryear, so 2020 is setting up for easier comps. Apple preannounced at the beginning of last year, and that rippled through the whole complex. We wont know that until april. That Fourth Quarter report coming up soon will be a do or die moment. If the numbers do not meet and beat, it can get ugly. Onsidering how overextended super cyclehe upgrade never comes to fruition. This is a weekly chart. You see a beautiful uptrend. On that 5g, there were upgrades, bullish talk, but there are reports that south korea was the biggest adopter of 5g. There are 5g apps. If it does not meet the h ype, that could be a taylor with both type and elementals, abigail doolittle, ask for joining us. Now to the battle over tech privacy in 2020. This law is to give users transparency on what Companies Like about them. Collect about them. For a look to what to expect morganar, lets bring in and with us in new york, our own bloomberg newcomer. Eric, remind us what doing also far about the California Consumer privacy act that just began . Is probably the most important privacy legislation in the u. S. This is important for California Companies and users in california but also all over the united states. It means that companies are going to have to disclose what data they collect to users and let users delete data they dont want to keep. They have to be much more theyul about the data retain. Law isave never seen a comprised of regulating privacy in the u. S. Because california is such a huge market, it is going to have a large impact on National Companies and the data they collect even outside of california. U. S. Cy regulation in the has been a patchwork affair so far, but this is a comprehensive approach that creates a host of new privacy rights for consumers that they have just never had before. Taylor if you take a look in your reporting, youre also looking at ccpa coming into effect, but some different initiatives that also pose changes to the law. What potential changes could we be facing . There might be a referendum in california in 2020, which what sort of luck and a lot of ccpa and expand some of the provisions and make it harder for california legislators to chip away at the bill. That is one thing. Then you have illinois, new york, Washington State looking at bills. And then there is still the stream of federal legislation, could come up with a piece of compromise legislation that could solve this problem nationally. Theres a lot of moving pieces if youre a company figuring out the current state of california privacy law, am i watching other states, is her federal, and what changes is there federal law, and what changes of there is a referendum. Taylor what do you see that could be big changes from what we currently have . Created eight was the ccpa was created through a Ballot Initiative. It is possible this new Ballot Initiative will be in the ballot in november. It will of anything strengthen ccpa and make a number of significant changes, like changing the enforcement agency. It would take jurisdiction away from the California Attorney general and give it to anyone agency regulating privacy in california. Taylor do you see california as the beginning of a federal privacy law . California has always been a trendsetter. It is definitely proving to be the case already. Mentioned, there are laws in new york, illinois, washington, other states that need to take the qs from the cues from the ccpa. Regulation appears to be stopped, but if you have states around the country adopt in adopting nuances that are amilar to the ccpa or taken step or two further, you can have an enormously complex regulatory landscape for businesses in very short order. If you think that pain threshold where businesses are finding it difficult to reconcile all these conflicting requirements, that could finally be the impetus for federal legislation. Taylor in your opinion, what do you see is the biggest or ever for federal legislation. Isnt the fact that businesses will be so confused by multiple different state laws that they really do need a federal law to lead the way . I think there are these two different tension points. On the one side, there is this private right of action or the general bush on consumer advocates push on consumer advocates to give strong enforcement on any privacy legislation that passes. That is a key piece of debate in the federal law. That is the sticking point. Bunting are the states the enforcement, that is part of the california referendum. The other side is whether we are going to have the federal law consume everything. Basically federal preemption. And that takes over and kills the state bills and makes the federal bills the law of the land. That is what the republicans are fighting for. You see the debate there. Do we have a federal preemption and a private right of action . A lot of the small pieces of the bill people tend to agree, but it is those big sort of ideas, how we enforce it and whether the federal law is ultimate law and privacy that is up for debate. That is why congress a step. Taylor that is why congress is stuck. Taylor we were hearing that a lot of businesses didnt mind ccpr because they were already andompliance with ccpa ggdr. What are you hearing from businesses in terms of being compliant with ccpa . They are already compliant with a broader level of data privacy. It is true that gdpr is a major european privacy law that went into effect last year or the year before. Ccpa does draw upon a lot of the concepts in gdpr. That is a law that applies to data of european residents. And so, even for Big Companies that have implemented compliance, they have not necessarily done it for their u. S. Operations. Pa has its own set of requirements and nuances. The fact that you have done gdpr does that mean you are all the way there by any means with ccpa. Taylor it is a debate that is certainly going to continue along with more acronyms. Thank you both for joining. Now, and analysts predict that a federal judge will probably block tmobiles takeover of sprint. That is based on questions the judge asked during Court Proceedings last month. A group of states have filed a lawsuit to block the deal on a trust graham. On antitrust grounds. If you like bloomberg news, check us out on the radio. You can listen on the bloomberg app, bloomberg. Com, and on the u. S. In the u. S. On sirius xm. This is bloomberg. Year hasntnew dulled tensions between tech employees and management, and amazon says the company has threatened to fire employees if they keep speaking out about the companies companys internal affairs. They have been seeking ways to curb the ecommerce giants contributions to Climate Change. Lets go to seattle for Bloomberg Technologys met day matt day. What are you hearing about what employees are saying in response . Employees came out this morning with a press statement saying to members hattie mills from amazon members had emails from amazon reminding them. The company has been largely conducting their campaign to organize inside the company but also using the media as a way to get the message out and put pressure on the company. Have toany seems to go through official channels. Taylor this is arguably not even an amazon sorry. You talk about the tension between management and employees all over big tech. Specifically, at amazon, how did this start . Amazon does not have a of theion like some companies in Silicon Valley do. It is more of a buttoned up work sort of place. In late 2018, a bunch of employees got together just looking around the Climate Change headlines and how they were impacting business. Some had huge wildfires in Washington State. They decided to take action and push the company to commit to doing more publicly to fight Climate Change. Since then, the company has taken many steps. Taylor i want to get a little bit more of amazons response. What else are they telling you about this sort of updated communication policy . They are reiterating that they do not think their communications or prohibition on employees going out the house ,nd talking about the company they want to stay senate or at least ask approval. Taylor we often hear about filingany big techer complaints or lawsuits. Anyhis could there be legal ramifications here . We have not heard any rumblings of that so far pertaining to amazon. I think there is a fine line, at least in my understanding, that it protected employees speech and speaking in behalf of the company, which is what amazon is claiming. Taylor what is amazon doing to fight Climate Change . I get 10 package and different boxes instead of folding them all into one box. Some of the cardboard, for example, what are some of the initiatives they have made . , one of the earliest programs like you mentioned the cardboard stuck, amazon is working to cut edging and products they should. Cut packaging and products they ship. Bezos came out with a plan to be Carbon Neutral by 2040. Now finally, making some of the aggressive commitment some other Large Tech Companies had an here to adhered to to Climate Change and in part due to their employees organizing. Taylor thank you, matt. Coming up, what old is new again . Apple starts a deal with an old partner. We look at the deal between the gpune maker and its old supplier. Thats next. This is bloomberg. Year, a new chip deal for apple. The iphone maker is striking a deal with u. K. Chip designer Imagination Technology. The deal revives a relationship and had all but ended when apple started making its own chips back in 2017. For more, lets bring in our bloomberg reporter who covers apple. What do you know about the new deal . Some context here, when youre building a phone or an apple tv or a watch or ipad, this is very much simplified. There are two main chips, you want a cpu, the main processor, a gpu, the graphics processor. Designs fromgpu Imagination Technology. Sourced gpu designs from Imagination Technology. This sort of designed the run gpus, and the Companies Stock price plummeted the Company Stock price plummeted. Things like apple wants Imagination Technology to come back into the fold, whether they own some patents for key technologies that apple is not able to design itself. They are striking and you deal with them. It is to be seen how long this one last four. Lasts for. Taylor is this a new vote of confidence in the company, or worries about apples own chips, or all of the above . I think it is a mix of things. I dont think this has to do with apple worrying about its own components. They are pretty much at this point leading the industry in terms of their own chip efforts. What Imagination Technology likely has its key patents that apple figured it is going to need to pay royalty and royalties on. Taylor what types of patents are we looking at, ai, 5g . This a stuff related to Computer Vision and ar specifically. Byre is new Technology Imagination technologies that is pioneering in the u. K. That really helps the clarity and the Processing Power that ar devices can have. Some of these patterns can be beneficial from that perspective as well, but also, Imagination Technologies is particular to gp are. Gpu. I dont think they will use any Technology Straight from imagination. They are developing an house, they just dont want to pay the big bucks for royalty suppliers. Taylor if they do, how can we start to see this . Are we looking for next september 5g phones . I dont think this has anything to do with 5g. This would be a are related technology. It is very possible this could be stuff we are not even going to notice. It is stuff that Imagination Technologies could be threatening to take apple to court for already behind the scenes. Remember, this is not a Public Company anymore, so a lot of this can happen sort of under the table. Woulde sense why apple want to come to this agreement. I would be shocked if we saw any new big analysis specifically related to this tech. Thanks fork gurman, joining. Coming up, teslas turnaround continues. Can they raise their targets by more than 100 . We will talk to the analysts behind the move. That is next. This is bloomberg. Bloomberg technology. Teslas price target was raised by analysts that ingenuity. Raised to 515 from 375, 1 of the highest on wall street and near the street high view of 530. Bloombergsd now by david welch. I want to show you a chart i am showing inside my terminal. Anduys, 10 holds, 15 cells, yet, you have a great thesis in your note, which i read cover to cover. 15 sells. I tend to be a contrarian. I think the winning will be on the bullish side. To get into the point, when we look at coming into the year, we see many positives and see that the main negatives, which were largely financial based and their ability to service the debt, largely behind the company. More importantly and probably most importantly, the gige factory over in china, all of that screams positive and suggests better profitability. That wer those reasons took things up today. Taylor we were wrapping up 2019 with positive news on the final days in netherlands, that they. Ad more deliveries good demandgetting in europe, which is kind of the becauseprising market electric vehicles from native automakers there just had not taken off as well, but tesla is doing pretty well and i think you are going to end 2020 see more action from china. I think they will probably hit their target for the year. They do have a pretty good lineup. The bigger question for investors will be if they can consistently make money with these cars, particularly as they start to sell cheaper versions. That will be the question for investors and if the bulls or bears went out on this. Taylor i want to break it down piece by piece. Are you confident they have met annual deliveries in 2019 . I think 2019 numbers, where it is 368, theyve given guidance for 360. I think those numbers are doable. Going to jump into profitability because i think there is a really important point to hammer home that leads stance aroundlish probabilities. Taylor take a look at the chart im showing inside my terminal. Thesis hase bull been betting on china, china has to be there. The problem is you are looking a sort of a decline at what has been an ev market. Is there enough to combat what looks like strong headwinds in the overall Chinese Market . First off, i think the short answer is yes, but we have to take a step back and ask ourselves why we are going over to evs. Our stance is very bullish. Vehicle,look at the you have less than 20 efficiency in terms of energy in verses desired output versus desired output. The same thing that happen when we went from incandescent light bulbs to led. You saw a material shift in efficiency. I think you will see the same thing here. When we look at 75 million or 80 million vehicles sold, evs are still only 2 penetration. There is a lot of room for growth. Further, when we look at profitability, as david was saying, i think the point is not just china. If you see the shift when you go from these lowvolume highpriced vehicles that have little overlap to highvolume lowerpriced vehicles that have a lot of overlap, that is suggestive of greater profitability increase for the company. That, i think, is a real important point. Taylor some of the concerns ive heard is the vehicles will be cannibalizing sales, not producing new potential buyers. What are you hearing about that . That is a real possibility, although to geoffs point, there is a lot of real growth here. His point that evs are 2 of the market does give it a lot of room to grow. There are a lot of people who want an ev and as they come up with more body styles, i think they will get the growth. I still wonder about profitability because the big question about tesla has always been execution. Can they manufacture efficiently . Can they get battery cost down . Can they do all this stuff on time . That has been the real problem for elon musk and his company. If this were a conventional automakers sharing a lot of parts and platforms and making three different vehicles oozing 75 shared parts, i would say they are going to print money, but this is tesla. They have never proven they can print money, and i think a lot of people will take a real waitandsee attitude. Taylor both of you talking about profitability, so lets go there now. The story of the year was last quarter, that surprise profitability that came in much higher than analysts were expecting. One concern is cutting through the margins, through the income statement to get a boost on the bottom line. Can they continue to cut their way to profitability, or do they need a new strategy . I think they can, and i think that is what we are seeing, and that is what we are betting on. To davids point, i think the most important data point did not come from tesla. It came from their rival porsche. Porsche the preeminent brand with twice the price to model us with half the range with the same battery pack. When we look at evs, it is not as simple as tossing some battery cells and a motor into the vehicle. There is some differentiation, at what tesla has shown the ability to do is to monetize that range, and you can either do that with price, or you can do that with longer range. Both are valuable to the consumer. In fact, i would argue that is the most valuable thing to the consumer, and it would be akin to coming out with a vehicle that gets twice the miles per gallon as their competitor, and that was from one of the largest the largest manufacturer in the world. Tape it taylor thank you both for joining me. The top security pick at needham. We will talk to needhams Senior Analyst behind that call. Thats next. This is bloomberg. Taylor new year, new threats. Cybersecurity trends include new mobile risks. Hackers are also expected to employ Machine Learning and attacks, and the cloud will prove Fertile Ground for compromise. Lets bring in one of the Renowned Experts in the field, whoellerman of vmware served under barack obama. Arguably, 2020, 1 of the biggest years when it comes to cybersecurity and the threats. Are youof a year seeing . It has become a functionality of conducting business in todays world. You have to appreciate all the major organized crime syndicates in the world have created businesses around hacking. Andhave rogue nationstates geopolitical tension continues to manifest in cyberspace in things like the trade war and other events that occur on a global stage. Taylor i wonder who is most at risk. I talked to cybersecurity experts who say it is the employees. Who in your opinion really poses the biggest risk in 2020 . I think there is a shift in how hackers are hacking. They have moved from burglary to home invasion, which is a lot more dangerous and that they will take over and commandeer your journal transformation efforts and use your network to attack your customers. That is the awakening that must happen in corporate america. Taylor as you look at 2020, are we more prepared than 2016 . I would say we are more prepared because we are aware of the antics that certain nationstates will leverage to manipulate democracy as a whole, res very few, the states that have taken up the assistance from the federal government to secure their systems. Wray said in testimony in front of congress that he sees activities by at least three nations based on our targeted electoral system, not all of which have the same goal in mind. Taylor what are the ways in which you see hackers getting to us in 2020 . Is it as simple as a voting machine or something much more enhanced . We need to be very wary of our information supply chains, Cloud Service providers, outside general counsel, the outside marketing firms we utilize, and even as individuals, we have to stay on our guard because those andties will be attacked, their infrastructures will be checked to target us. What our research has shown as there is a dramatic uptick of destructive attacks where hackers manipulate the integrity of data and change exactly the way either a corporation operates or an individual thinks specific to their advices specific to their devices. Taylor i love that you brought up the cloud because we have grown up thinking the cloud is secure and safe. Is the cloud more at risk and we think it is . Not all clouds are created equal. The whole purpose behind what we are focused on here is to build intrinsic security into the environment across the entire stat. You cannot try to retrofit security on cloud environments. You have to build it in from the beginning and understand an adversary will use that environment to attack your constituency, so you have to. Ave greater Visibility Like i said, it depends on the strategy and the amount of dedication of that organization to securing their cloud, and that varies by industry and by corporation. Taylor you were saying some of the biggest threats are coming from russia, iran, china. How are they differing in their approaches . Mike lee, you have a 50year plan espoused by china for dominance. You will see less of a lesser attacks by chinese hackers against american corporations hopefully, but you see north korea and iran now having cyberattack capabilities, and they are willing to destroy data and commandeer infrastructure leverage your systems against your constituencies. Russians are very much focused on undermining the institutions of the west and the validity of the integrity that we place on also its of things from democracy to our own data. Taylor cybersecurity tech firm crowd strike provides threat, intelligence, and cyberattack suchces meant to deal with threats. Joins ust from needham now. Love getting your topic. What is behind the bowl the thesis . Sis the bull we believe security is an area that absolutely has to see more spending. It is a primary focus not just in terms of i. T. But at the board level, and to that extent, we think that there is clearly going to be, you know, a very significant increase in spending in this space, particularly as we get closer and closer to the election. It will become more and more of an issue. We particularly Like Companies that are in the cloud direct segment of the marketplace that have a cloud native solution. I heard your last guest to talk about security in the cloud. What we want to highlight as these are companies that are in protectd natively that Companies Directly from the cloud as opposed to connections aws,en, you know, microsoft du jour, or Something Like that where it is a cloud connection that is not necessarily secure, so quite different than what he was referring to. We think the companys growth is going to be well over 50 over the course of the next year. The street has it slowing down at the end of the year, and i think that is too steep a deceleration from the 100 growth they posted last quarter. Additionally, any upside you get in revenue demonstrates significant margin leverage, so we think there is good upside to both revenue and the margin side of the equation. We strongly believe that crowd strike is one of the Key Solutions to the security problem that enterprises are facing. Paint a positive picture in terms of enterprising and corporations increasing their spend on cybersecurity, but what is crowd strike doing specifically that perhaps other companies are not to take advantage of that positive backdrop . Let me delineate between the winners and losers here in the security space. We very strongly believe that the worlds perimeter defense, where you basically put an id stack at the edge of your data center, is no longer a vali security solution. While you still need to do that, the world is shifting to what i would call a crowddirect solution. Companies are in the cloud and will deliver cloud security. These companies are trying to do a perimeter defense model where you are essentially trying to keep the bad guy out. You are just never going to win at that. There was a recent Security Survey where 76 of chief rs of enterprises expected they would be hacked within the next 12 months and 60 predicted they did not know when it happened. That is a function of the nail your perimeter defense to work. All the bad guy has to do is get through once. You have to keep them out 100 of the time. It is pretty obvious that is not working. We are moving to a world of what is called zero trust or cloud direct security, and these companies in the cloud that are delivering that i think nextately will be the generation of Security Companies and will gain share. Taylor thank you for joining us. Still ahead, bitcoin, hyperloop, and self driving cars. We go through all the tech predictions of the last decade that dude and did not come to fruition. This is bloomberg. That did and did not come to fruition. This is bloomberg. Phone ownership, elon musks hyperloop, self driving cars, bitcoin they were all the productions of the last decade for 2020. Many did come to fruition. Many did not. Top 10, 4 or five really stood out. Top 10. E nine out of 10 people over the will own a mobile phone. Tell me theres not a bunch of sixyearolds with mobile phones. Yeah, i dont think that happened. Vodafone probably overestimated how quickly the developing markets would come online and how quickly cell phones would come down in price. Divide to bring so many people in developing economies into the smartphone age. Taylor i want to switch to digital. There was a production that jet. Com would break even prediction that jet. Com would break even. It looks like they are still losing money. Yes, thats why they are an independent entity. Before uber and airbnb were coming up in creating the age of the unicorn, and they were this early example of all the Silicon Valley money that is going up in smoke. In response to a lot of the , they came on this very network and said by 2020 we will be breaking even. Walmart ended up buying them the next year, but ill accounts, i dont think that really happen. Walmart is losing a lot of money in their competition with amazon right now. Talk about google, alphabet. You come in and they thought Cloud Business would eclipse advertising revenue, but we are not quite there yet . They were a little ambitious in their production saying that by 2020, they will have their Cloud Business outpacing advertising. At the end of last year, ofertising made up about 85 the revenue, so cloud has grown a lot, but it is a far cry from what they envisioned and they are bumping up against amazon. Taylor what might have been the biggest bust of the year was dyson saying they would sell an electric car. Last year they shut down the business, just could not get off the ground. That was a production that was not that far out. That was just a couple of years ago. They were like, we are working on this electric car and we will have something ready by 2020. It did not take them long to figure out the project was, as they described it, not commercially viable. Spend a lot of money as a vacuum company that wanted to be something larger and realized this was a complicated business. Veryr enter very and a faroff addiction was uber deploying flying cars. Although they still maintain that sometime in 2020, they expect to do demonstrations of these flying car takeoff and landing vertically vehicles. Helicopters, which are kind of like a flying car but not really. They still hope to be able to show some type of live demonstration of a future futuristic jetsonslike car. Oflor there has been a lot competition not only in the ev space but in the selfdriving space also. They said that this was way back in 2015i think toyota come out and said they expect to have cars that will be able to drive themselves on the highway. They will be there will be assistant technology for drivers. It does not mean you will have a driver in the front seat. They do plan to do that this year through their lexus brand, have a car that can drive itself on the highway, kind of like a tesla does, but it was sort of a way to cap the crazy hype cycle that took place over the last decade in self driving cars. There were a lot of productions about how we would be sitting in the back seats and have robots driving us around and we are nowhere near that day. Taylor thanks for joining. Oft does it for this edition Bloomberg Technology and Bloomberg Technology is livestreaming on twitter. Technology and be sure to follow our global news on twitter. Ktake this is bloomberg. Paul good morning. Im paul allen and sydney. We are underarm power away from we are under an hour away from the market open in sydney. Sophie im Sophie Kamaruddin in hong kong. Welcome to daybreak asia. Paul the top stories we are covering in the next hour a resolution for a rally. Afterfutures signal gains tech lead markets higher. Pressure mounts on australian