Episode summary
Bloomberg Surveillance TV: June 25th, 2026 | Bloomberg Surveillance
Bloomberg Surveillance
· · 24 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Sebastien Page, Heath Terry, Bill Dudley
Summary
Stocks were trading higher on Micron’s blowout earnings, and the conversation quickly turned to whether the AI buildout is still early or already overextended. Sebastien Page argued that AI is an expanding trade across bottlenecks such as cooling, electrification, aerospace and gas turbines, and said T. Rowe Price is long U.S. large-cap growth, small- and mid-cap stocks, and even selected emerging markets exposures tied to the theme. He said the market has already adjusted for weaker free cash flow and higher borrowing, and that the key next leg will be AI users gaining real efficiency and margin improvement.
Heath Terry made the case that enterprise AI demand is still accelerating sharply and that the bottlenecks are shifting from memory to interconnect, storage, labor and power. He said hyperscalers are still earning strong returns on capital spent on AI infrastructure, and argued that investors should own the choke points rather than the companies doing the spending. He also pointed to software names like Microsoft and Oracle as the parts of the trade being punished, while infrastructure beneficiaries continue to get paid.
Bill Dudley focused on the Federal Reserve, warning that the central bank cannot rely on markets to define policy. He said the case for tighter policy remains strong because financial conditions are still easy, unemployment is low, and inflation remains too high, even if headline data should soften as oil prices fall.
Key takeaways
- Sebastien Page said the AI trade still has legs because spending is spreading from GPUs to a wider set of supply-chain bottlenecks.
- Page argued that the market has already repriced some of the risk, with Russell 1000 growth valuation around 22 versus the 30 area seen in prior peaks.
- Heath Terry said enterprise AI demand has accelerated from 28% year-over-year growth in Q1 of last year to 141% in Q1 of this year.
- Terry argued investors should own the choke points in AI, including memory, interconnect, storage, labor and power, rather than the hyperscalers paying the bill.
- Bill Dudley said the Fed needs a clearer reaction function, not just less forward guidance, because markets and policy cannot simply mirror each other.
- Dudley said easy financial conditions and persistent inflation still make a case for tighter policy, even if June inflation data may improve.
Notable quotes
“AI is an expanding theme from GPUs to other bottlenecks along the data center supply chain”
“we're looking at three trillion by 2028. So, it's a trade and it's going to continue to go in my mind”
“The health of the AI trade will continue to be defined by the irresistible force of enterprise demand, meeting the immovable object of inference capacity”
“If you have the ability to borrow at 6% or to issue equity and get a 29% return on it, you're supposed to do that”
“what I'm concerned about is that I'm perfectly fine with getting rid of forward guidance, but what I'm concerned about is Borch is not disclosing what his monetary policy reaction function is”
How the episode opens
Bloomberg Audio Studios podcasts radio news. This is the Bloomberg Surveillance Podcast. I'm Jonathan Pharaoh along with Lisa Abramitz and Amarie 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 Bloombo television weekday mornings from 6:00 to 9:00 a.m. Eastern.
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We begin this hour with stocks pushing higher following a boost from Micron's blowout earnings report. Sebastian Page of Tro Price writing, "AI is an expanding theme from GPUs to other bottlenecks along the data center supply chain as Buzz Lightyear said to infinity and beyond. Sebastian joins us now for more.
Seb, welcome back to the program, buddy. You just saying stay on, grip tight, keep riding this ball. John, when I wrote my notes, I didn't think you'd pick up on the Buzz Lightyear quote.
I'm going to be honest. Yeah, we have an expanding trade from bottlenecks to, you know, more and more bottlenecks. You're looking at cooling, at electrification, at aerospace, at gas turbines.
We're invested in those bottlenecks. We think it's a trade that has legs. Look, the AI buildout, a lot of people have mentioned those forecasts on your show, but we're looking at three trillion by 2028.
So, it's a trade and it's going to continue to go in my mind. The key question right now is when is this going to show in AI users margins? Now, we have 300 analysts on our platform.
I read their notes, but now I I use AI to read their notes and I ask AI, where are we seeing companies in our own proprietary research that are increasing their margins because they're using AI?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- economy
- markets
- investment strategy
- technology & communication research
- macroeconomics
Companies and tickers mentioned
- TROW
- C
- T. Rowe Price
- Citigroup
Watch the episode
Watch “Bloomberg Surveillance TV: June 25th, 2026 | Bloomberg Surveillance” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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