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