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Scott we're back for our second big story the NASDAQ has taken its biggest tumble since 2022 thanks to earnings
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reports from alphabet and Tesla alphabet's quarterly earning showed a slowing growth in advertising sales with
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ad sales Rising 11% down from 13% the previous quarter on top of that whiz the cyber security startup we had talked
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about alphabet plan to acquire had decided to turn down the $23 billion offer alphabet Shares are down almost 5%
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in the last five days the time of the taping um I want to talk about this but I'm going to mention Tesla earnings have
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showed a seven % line with auto Revenue with earnings per share coming down below Wall Street estimates Sals the
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shares are down 10% last 5 days given up a lot of the gains they've been making um NASDAQ is down over 3% in the last
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five days and the S&P is down 2% because of these tech companies um I'd love to hear your thoughts on this this is your
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big area of expertise talk a little bit about uh alphabet first and then Tesla well alphabet actually had a decent
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quarter it's just that one I mean alphabet's dealing with this existential issue of having one foot in and one foot
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out of AI in the sense that they have Gemini but Gemini gets about an eighth of the traffic of open AI or of chap GPT
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and when you think about all the Head Start in the captive audience across Google and Android to have only the
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eighth of the traffic of what is supposed to be a startup but is really just Microsoft AI is unusual and the
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question is they're trying to incorporate AI into their core platform search and there's still a little bit
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people would argue trapped in the innovator's dilemma and that is they don't want to go all in on Gemini at the
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risk of cannibalizing this quar of a trillion dollar toll booth amazing best business probably in history called
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search so there's still kind of I would argue a little bit one foot in one foot out trying to have their cake and eat it
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too I understand why they're doing people got spooked about YouTube uh sales slowing I didn't think it was that
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big a deal and the other thing that's hurting their earnings is like everyone else they're now except for Apple
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they're now in this arms race and their capex right was um dramatically up sort of which sort of hit hit earnings the
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bigger story I think or what was more like genuinely bad news was um Tesla and that is the EV Market I think it's
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interesting an interesting analogy would be the streaming market and that is it was
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overinvestment EV was $88,500 more expensive than its um than its intern combustion Pier now
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that number that margin at premium has dropped to $1,500 and the F-150 Lightning the Eevee is actually $10,000
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less than its internal combustion uh counterpart probably because they produce too many in addition that while
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the market continues to grow Tesla has not a lot of people would describe its products as a bit tired they have made a
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lot of progress around describe them they are a bit tired let's you know we've been saying that for a year like
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where's their new stuff except for that heinous cyber truck I drove in a a friend of mine is this master of the
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universe hedge guy I went out to the Hamptons to see him and he has a matte black cyber truck and people were
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stopped and staring at it and it's just I I drove in it I would describe it as a
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ridiculous car out of a out of a Simpsons episode I think it's insane but were you embarrassed to get in it I'd be
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embarrassed to get in it oh no there's a lot of I've done that's much more embarrassing but what's the problem what
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does he have to do here he obviously was he took a vote on Twitter whe whether to
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to invest $5 billion doll in xai I mean I'm literally like when is the SEC going
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to come and arrest this fella well first I mean there's a couple things one the way if you listen to the earnings call
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the questions were more pointed and more heated than they've been in a long time
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to this point the earnings calls have been a bunch of stenographers and sick ofense thanking him for a great quarter
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this one was distinctly like boss we have been waiting for a robo taxi for 5 years you know how frustrating that is
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to be on a corner when you call and they say oh a robo tax is just it's a minute
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away it's a year away he's even saying now that it could be by the end of the year but it might be 2025 he said I
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think in 2019 or 2020 we were a year away and people's patience oh no no he constantly constant people's patience is
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is um really uh really wearing thin but more than anything I'm a valuation guy if you look at forward earnings Ford
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trades at seven times forward earnings GM trades at five times forward earnings Ferrari an AM amazing company with you
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want to talk about a moat trades it 50 times right um uh Tesla trades at 99 times forward earning earnings and the
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moment you say that people say well it's not a car company it's an energy company
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it's going to be a robo tax something else the scariest thing in that earnings call is that their 2030 projected
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profits they're saying 80% of those projected profits will come from its Robo taxi division right so they are
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estim ating that four fifths of their profit are going to come from a division in a technology that they haven't shown
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an ability to even deliver yet I know I I need to I just real quick need to correct myself it wasn't the company it
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was R Kathy Woods which makes it batet crazy anyways but she was saying 90% of Tesla's Enterprise Value earnings will
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be attributed to the robo taxi business by 2021 you know what I was thinking when I heard these I was like this guy
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had everything like he had it like he could have shifted into to new products new exciting things he could of owned it
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like really been Ferrari right and he's just blown it here in a way that I I it's sort of sad because it was a very
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good company and it still is in a lot of ways it's just I'm I'm just the corporate governance here I mean it's
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just the idea that you would say to Tesla shareholders I'm going to take5 billion of our hard-earned cash flow and
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use it to try and take my other failing company and put on an AI dress you just that wouldn't even be a
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conversation at a board level of most companies they' be like no stay focused on we do cars Boss we're not we're not
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in media and we're not interested in funding your adventures in AI media with our hard-earned money and instead he
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takes to a Twitter poll like have you pulled your board members that represent the shareholders at Tesla but again do
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corporate governance is sort of a a a cute novelty we used to talk about before before musk it is such a waste I
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was just thinking you know I'm not inclined to him in any way but I feel bad because it was a really good you
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know what I mean like you're like why did you go out with that girl when you had this girl anyway people make bad bad
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choices