A new report from Barclays projects that in the next decade physical AI could grow to be a trillion-dollar market, with autonomous vehicles leading the way. Barclays Thematic FICC Research Team Director Zornitsa Todorova joins Ed Ludlow on “Bloomberg Tech.” -------- Like this video? Subscribe to Bloomberg Technology on YouTube: https://www.youtube.com/channel/UCrM7B7SL_g1edFOnmj-SDKg Watch the latest full episodes of "Bloomberg Technology" with Caroline Hyde and Ed Ludlow here: https://www.youtube.com/playl ...

Core Insights - The company achieved the highest quarterly revenue in its history during Q4 2025, driven by an 11% increase in licensing revenue and broad demand across all technology pillars [1] - The strategic focus has transitioned toward 'Physical AI,' emphasizing the need for edge devices to connect, sense, and infer data locally in real-time for autonomous decision-making [1] - A significant NPU design win was secured with a top-tier PC OEM, validating the company's capability to provide high-performance, power-efficient AI silicon IP for next-generation computing [1] Revenue and Growth - The connectivity franchise expanded with record shipments in Wi-Fi and cellular IoT, which grew 48% and 42% year-over-year respectively, helping to offset softness in the mobile handset market [1] - The diversified 'Smart Edge' portfolio generated 86% of total revenue in 2025, reducing dependency on the volatile smartphone sector [1] Licensing and Agreements - The company demonstrated a 'licensing and royalty flywheel' by signing 54 agreements in 2025, with 12 customers licensing multiple technologies to address complex system requirements [1]

Financial Data and Key Metrics Changes - For Q4 2025, the company achieved record revenue of $31.1 million, a 7% increase year-over-year and a 10% increase sequentially [15] - Licensing and related revenue rose 11% year-over-year to $17.5 million, accounting for 56% of total revenue, while royalty revenue increased 2% year-over-year to $13.8 million, making up 44% of total revenue [15][17] - Non-GAAP net income for Q4 2025 increased 86% year-over-year to $4.9 million, with diluted earnings per share rising to $0.18 [18] Business Line Data and Key Metrics Changes - The licensing business saw strong performance with 18 agreements signed in Q4, including three NPU licensing deals and multiple Wi-Fi 7 agreements [4][5] - AI procedural licensing contributed significantly to licensing revenue, indicating a shift towards higher-value engagements [6] - The connectivity segment performed well, with strong demand for Bluetooth and Wi-Fi IPs, particularly as customers upgraded to Wi-Fi 7 [7] Market Data and Key Metrics Changes - CEVA-powered devices shipped reached a record 2.1 billion units in 2025, up 6% year-over-year, with Wi-Fi shipments growing 48% and cellular IoT shipments up 42% [10] - Royalty contributions from Wi-Fi increased by 70% year-over-year, reflecting higher volumes and average selling prices [21] - The company noted a recovery in shipments from a China-based handset customer, although memory pricing and supply constraints continued to impact smartphone shipments [9] Company Strategy and Development Direction - The company aims to extend its leadership in wireless connectivity and deepen integration with customer roadmaps, focusing on a comprehensive IP stack [14] - CEVA is positioned to capitalize on the shift towards physical AI, where devices connect, sense, and infer data locally [3][13] - The strategy includes building long-term royalty trajectories through diversified customer engagements across smart edge markets [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow in 2026, expecting total revenue to increase by 8%-12% year-over-year, with stronger growth anticipated in the second half of the year [25] - The company highlighted the importance of AI adoption across industries and the potential for higher-value engagements to drive growth [24] - Management acknowledged external factors such as memory pricing and currency fluctuations that could impact performance but emphasized the diversified nature of the business [25][26] Other Important Information - The company celebrated reaching 20 billion cumulative CEVA-powered devices shipped, reinforcing its market position [13] - A follow-on offering raised approximately $63 million to strengthen the balance sheet, with cash and equivalents totaling around $222 million at year-end [22] Q&A Session Summary Question: Can you provide insights on the NPU pipeline and market exposure? - Management noted significant market share gains in AI, with over 10 new deals and a healthy pipeline across various sub-markets [32][33] Question: How does the NPU win compare to competitors? - The company emphasized its competitive advantage in delivering best-in-class performance metrics, which led to the design win with a top PC OEM [44][45] Question: What are the expectations for revenue growth in 2026? - Management indicated that stronger licensing and royalty ramp-up, along with effective cost management, would drive revenue growth [68][69] Question: How does the recent capital raise impact M&A strategy? - The company aims to leverage its strengthened balance sheet for non-organic growth opportunities in the IP domain [73][74]

Financial Data and Key Metrics Changes - For Q4 2025, the company achieved record revenue of $31.1 million, a 7% increase year-over-year and a 10% increase sequentially [15] - Licensing and related revenue rose 11% year-over-year to $17.5 million, accounting for 56% of total revenue, while royalty revenue increased 2% year-over-year to $13.8 million, representing 44% of total revenue [15][17] - Full-year 2025 total revenue increased 2% year-over-year to $109.6 million, with licensing and related revenue growing 6% [9][21] Business Line Data and Key Metrics Changes - The company signed 54 licensing agreements in 2025, including 10 OEM agreements, indicating strong demand across AI and advanced connectivity [10][12] - AI processor licensing became a significant portion of licensing revenue in 2025, reflecting the growing importance of AI in the company's portfolio [12] - The connectivity business performed well, with strong demand for Bluetooth and Wi-Fi IPs, particularly as customers upgraded to Wi-Fi 7 [7][10] Market Data and Key Metrics Changes - CEVA-powered devices shipped in 2025 reached a record 2.1 billion units, up 6% year-over-year, with Wi-Fi shipments growing 48% and cellular IoT shipments up 42% [10][21] - Wi-Fi royalties increased 70% year-over-year, driven by higher volumes and average selling prices from Wi-Fi 6 customers [21] - Cellular IoT royalties rose 20% year-over-year, reflecting strong demand in smart edge applications [21] Company Strategy and Development Direction - The company aims to extend its leadership in established categories and deepen integration with customer roadmaps, focusing on providing a complete IP stack [14][24] - The strategy emphasizes the transition to physical AI, where connectivity, sensing, and inference converge to drive growth [13][14] - The company is positioned to capitalize on the growing demand for AI in various markets, including consumer, automotive, and industrial applications [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow in 2026, expecting total revenue to increase by 8%-12% year-over-year [25] - The company anticipates strong demand across its diversified product portfolio, despite potential challenges from memory pricing and supply constraints [25][26] - Management highlighted the importance of maintaining cost discipline while supporting growth across smart edge markets [27] Other Important Information - The company celebrated reaching 20 billion cumulative CEVA-powered devices shipped, exceeding 21 billion by the end of Q4 2025 [13] - The company successfully executed a follow-on offering, raising approximately $63 million to strengthen its balance sheet [22] Q&A Session Summary Question: Can you provide insight into the NPU pipeline and end market exposures? - Management noted significant market share gains in AI, with over 10 new deals and a healthy pipeline across various sub-markets, including consumer and industrial applications [32][33] Question: Can you clarify the nature of the NPU deal with the PC OEM? - The NPU functionality will be integrated into the OEM's SoC platform, representing a separate chip designed for high-performance AI tasks [35][36] Question: What are the competitive dynamics for the NPU win? - Management emphasized the need for best-in-class performance and the importance of internal integration between hardware and software for competitive advantage [44][45] Question: How does the company view the guidance for 2026? - Management indicated that stronger licensing and royalty ramp-up, along with favorable currency exchange rates, could drive revenue toward the high end of the guidance range [68][69]

Financial Data and Key Metrics Changes - In Q4 2025, CEVA achieved record revenue of $31.1 million, a 7% increase year-over-year, and a 10% sequential increase [17] - For the full year 2025, total revenue increased by 2% year-over-year to $109.6 million, with licensing and related revenue growing by 6% [10][23] - Non-GAAP net income for Q4 2025 increased by 86% year-over-year to $4.9 million, with diluted EPS rising by 71% to $0.18 [20] - GAAP net loss for Q4 2025 was $1.1 million, an improvement from a loss of $1.7 million in Q4 2024 [19] Business Line Data and Key Metrics Changes - Licensing revenue in Q4 2025 increased by 11% year-over-year to $17.5 million, representing 56% of total revenue [17] - Royalty revenue in Q4 2025 increased by 2% year-over-year to $13.8 million, accounting for 44% of total revenue [17] - AI procedural licensing became a significant portion of licensing revenue in 2025, reflecting the growing demand for AI technologies [7][13] Market Data and Key Metrics Changes - CEVA-powered devices shipped in 2025 reached a record 2.1 billion units, up 6% year-over-year, with Wi-Fi shipments growing by 48% and cellular IoT shipments by 42% [11][23] - Wi-Fi shipments in Q4 2025 reached a record high of 86 million units, up 30% year-over-year [21] - Bluetooth shipments for Q4 2025 were 303 million units, down from 343 million units in Q4 2024 [21] Company Strategy and Development Direction - CEVA is focused on strengthening its leadership in wireless connectivity and expanding into AI for smart edge applications [3][16] - The company aims to provide a comprehensive IP stack to enhance customer integration and increase the value per device [16] - CEVA's strategy includes diversifying its customer base across smart edge markets, which generated 86% of total revenue in 2025 [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position entering 2026, highlighting strong fundamentals and a diversified business model [25] - The company anticipates total revenue growth of 8%-12% in 2026, with a focus on AI adoption and wireless connectivity [27] - Management acknowledged potential challenges from memory pricing and supply constraints but remains optimistic about market share gains [51][70] Other Important Information - CEVA celebrated reaching 20 billion cumulative devices shipped, exceeding 21 billion by the end of Q4 2025 [15] - The company executed a follow-on offering of 3.5 million shares for approximately $63 million to strengthen its balance sheet [24] Q&A Session Summary Question: Can you provide an idea of the scale of your NPU pipeline compared to last year? - Management noted significant market share gains in 2025, with over 10 new NPU deals and a healthy pipeline across various sub-markets [35][36] Question: Is the NPU for the PC OEM a separate chip or integrated into a CPU package? - The NPU is a separate chip that the OEM integrates into their SoC platform [37][38] Question: Can you discuss the competitive dynamics for the NPU win? - Management highlighted the need for best-in-class performance and the importance of internal integration for high-end compute devices [45][46] Question: What factors would need to improve for 2026 to trend toward the high end of your guidance? - Stronger licensing and royalty ramp-up, along with favorable currency exchange rates, could positively impact revenue [68][70]

Core Insights - QNX, a division of BlackBerry Limited, will showcase innovations at Embedded World 2026, highlighting its role in robotics systems [1] - The event will take place from March 10 to 12, 2026, in Nuremberg, Germany [1] - The shift towards Physical AI in industries necessitates a deterministic, real-time software foundation for intelligent machines [1] Company Highlights - QNX is positioned as a critical enabler in the development of robotics systems [1] - The company emphasizes the importance of real-time software in the evolution of robotics and automation [1] Industry Trends - Industries are moving beyond traditional robotics to adopt Physical AI, which involves machines that can perceive, reason, learn, and interact autonomously [1] - This transition marks a fundamental change in the construction and functionality of intelligent machines [1]

Core Insights - The conversation at the Cisco AI Summit highlighted the transformation from explicit programming to implicit programming, emphasizing the need for companies to adapt to AI technologies and integrate them into their processes [4][5][15]. Group 1: AI Transformation - The shift from explicit programming to implicit programming allows computers to understand intentions and solve problems autonomously, marking a significant change in computing paradigms [4][5]. - Companies should assume that computational power is infinite and act accordingly to tackle their most impactful challenges [4][5]. - The ROI of new technologies is often difficult to quantify initially, and companies should encourage experimentation in a safe environment to foster innovation [4][16][17]. Group 2: AI Integration in Business - Companies must integrate AI into their workflows rather than treating it merely as a tool, as this will enhance organizational knowledge and efficiency [4][45]. - The concept of "AI in the loop" is proposed as a more effective approach than "Human in the loop," suggesting that AI should be embedded in processes to continuously improve company value [45]. Group 3: Future of Computing - The computing stack is being reinvented, with a focus on creating a new architecture that combines AI capabilities with networking and security [15][42]. - The advancements in AI are leading to a "bounty" of intelligence, where tasks that previously took a year can now be completed in a day, fundamentally changing decision-making processes [20][39]. Group 4: Industry Opportunities - The potential for AI to enhance labor and create new opportunities is significant, with the IT industry poised to tap into a much larger economic scale [39]. - Companies are encouraged to leverage their domain expertise and understanding of customer needs, as this is where true value lies, rather than focusing solely on coding [40].

Core Insights - The article discusses the transformation from explicit programming to implicit programming, emphasizing the need for companies to adapt to AI technologies and integrate them into their processes to enhance efficiency and innovation [6][10][19]. Group 1: Transition to Implicit Programming - Companies are moving from explicit programming, where specific instructions are given, to implicit programming, where the intent is communicated to the computer, allowing it to solve problems autonomously [6][10]. - AI advancements are expected to increase computational capabilities by a factor of one million over the next decade, compared to the traditional Moore's Law, which predicts a tenfold increase in the same period [6][25]. - Organizations should foster a culture of experimentation with AI, allowing employees to explore various models in a safe environment, as innovation often occurs outside of strict control [21][22]. Group 2: AI Integration and Enterprise Transformation - The concept of "AI in the loop" is introduced, suggesting that AI should be integrated into business processes to capture employee experiences and enhance company knowledge [49]. - Companies must identify their core competencies and focus on impactful work rather than getting bogged down by the initial ROI of new technologies [21][22]. - The collaboration between Cisco and NVIDIA aims to create a new computing stack that integrates AI capabilities while maintaining control, security, and manageability [19][20]. Group 3: The Future of AI and Business - The future of AI is seen as generative rather than retrieval-based, where software adapts to different contexts and user needs in real-time [33][39]. - The article highlights the importance of understanding the physical world and causal relationships in developing next-generation AI, termed "Physical AI" [42][43]. - Companies are encouraged to leverage their domain expertise and knowledge to effectively communicate their needs to AI systems, thus enhancing their competitive edge [44][45].

Core Viewpoint - The Hang Seng Index Company announced the inclusion of Wuyi Vision (06651) in the Hang Seng Composite Index, effective March 9, 2026, following a quarterly review [1] Group 1: Company Overview - Wuyi Vision was listed on the Hong Kong Stock Exchange on December 30, 2025, becoming the first Physical AI company to enter the capital market in China [1] - Established in February 2015, Wuyi Vision focuses on cloning Earth's 5.1 million square kilometers through technology [1] Group 2: Business Operations - The company has made significant investments in three core technology areas: 3D graphics, simulation, and artificial intelligence [1] - Wuyi Vision has developed three main business lines: 51Aes (Digital Twin Platform), 51Sim (Intelligent Driving Simulation Platform), and 51Earth (Digital Earth Platform) [1] - Its products are widely used by over a thousand medium and large enterprises globally, covering 19 countries and regions [1] Group 3: Market Impact - The inclusion in the Hang Seng Composite Index may lead to Wuyi Vision being added to the Hong Kong Stock Connect, as it meets various criteria including market capitalization, liquidity, and listing duration [1]

Core Viewpoint - The Hang Seng Index Company announced the inclusion of Five One Vision (06651) in the Hang Seng Composite Index, effective March 9, 2026, following a quarterly review [1] Group 1: Company Overview - Five One Vision was listed on the Hong Kong Stock Exchange on December 30, 2025, becoming the first Physical AI company to enter the capital market in China [1] - Established in February 2015, the company focuses on cloning Earth's 5.1 million square kilometers and has made significant investments in 3D graphics, simulation, and artificial intelligence [1] Group 2: Business Operations - The company has developed three core business areas: 51Aes (digital twin platform), 51Sim (intelligent driving simulation platform), and 51Earth (digital earth platform) [1] - Its products are widely used by over 1,000 large and medium-sized enterprises globally, covering 19 countries and regions [1] Group 3: Market Impact - The inclusion in the Hang Seng Composite Index may lead to Five One Vision being added to the Hong Kong Stock Connect, as it meets various criteria including market capitalization, liquidity, and listing duration [1]