Bloomberg Surveillance TV: October 15th, 2026

Sebastien Page (0:02)

Bloomberg Audio Studios. Podcasts, radio, news.

Jonathan Ferro (0:11)

This is the Bloomberg Surveillance podcast. I'm Jonathan Ferro, along with Lisa Abramowicz and Annmarie Hordern. Join us each day for insight from the best in markets, economics and geopolitics. From our global headquarters in New York City, we are live on Bloomberg Television weekday mornings from 6 to 9 AM Eastern.

Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always on the Bloomberg Terminal and the Bloomberg Business app. We begin this out with renewed tech jitters dragging stocks lower. Sebastien Page of T. Rowe Price writing, traditional valuation says the market is in a bubble. I disagree. Seb joins us now for more. Seb, welcome to the program. Got to start with CoreWeave and a bit of distress in the credit market. What's the signal coming from that name?

Sebastien Page (0:52)

Well, there is going to be volatility in the AI trade because it is more levered than it was. But fundamentally, I am optimistic for the next 6 to 12 months on that trade. And Jonathan, I look at end demand. Token spend is up 700% year over year, quarterly token spend. And token demand, because they're getting cheaper, is up 18x. So, we're only scratching the surface in terms of adoption and accelerating demand. The demand is accelerating. There's data that estimates that about 20% of enterprises have at least one agentic process in their enterprise, 20%.

Consultants are estimating that we'll get to 80%.

So, my signal from this is there's volatility, there's more leverage, there's more speculation, there's winners, there are losers, but fundamentally, the demand is still pulling us forward on that trade.

Jonathan Ferro (1:57)

Seb, to your point, that demand at the application layer should flow downstream to demand for the infrastructure build out. The infrastructure build out, though, has done so much ahead of time to meet the demand at the application layer. When we look at the NeoCloud firms, the leverage players like CoreWeave, if they face capital constraints, are you confident that demand will come from elsewhere to fill the gap for the chips trade?

Sebastien Page (2:20)

John, you mean the supply of capital for financing the build out?

I think there's still capital available. And if you look at some of the more solid companies in the AI build out, for on the cloud side, for example, their corporate spread is not that high and it is actually comparable to, in the case of Microsoft and Alphabet, lower than the average IG investment rate.

Jonathan Ferro (2:45)

Oh, without a doubt. So allow me to jump in just to clarify. That's a different bucket. There's two buckets I'm talking about here. On the one side, you've got a pool of demand and that's legit hyperscaler investment grade, well-funded balance sheets, that demand. A lot of people might say that's largely rate incentive. They're going to keep on buying. They're going to keep on buying. You've got another pool of demand, not as large. And then you've got the leverage players, the likes of CoreWeave. I'm trying to understand if the likes of CoreWeave face capital constraints, can't borrow anymore, are facing those constraints and can't build out in the same way. Is the demand from the well-funded players sufficient to fill the gap left by them if indeed they get in trouble?

Sebastien Page (3:23)

I think so. I mean, you have a big shift, not a big shift, but an incremental shift from the frontier models to open weights. And when you tally all the demand, it keeps growing. And yes, the build out has happened earlier and now we're monetizing it. I remember, John, we talked about this a while back, but one of our investors said when everybody was asking if AI was going to be monetized or not, we didn't see the monetization. He compared it to basically the crack cocaine phase. This was maybe a year, a year and a half ago. He basically said, everybody's getting it for free. You get hooked on it and then we charge you later. And believe me, in enterprises, it's only beginning.

So yes, John, there will be fragile players. Some of them will get in trouble. But I look at it from a top down perspective and I find the trade could continue for the next six to 12 months.

I just think this is so transformational and we do have still capital markets that are behaving. I think, you know, I just look at the end demand and that's how I think about it.

Jonathan Ferro (4:33)

So would you be buying the chip players off the back of a six day run? A move of more than double digits, double digits, about 11% right now over the last six sessions or so. That's a correction in the chip names in a bit more than a week. So would you lean into that weakness?