Behind the video
Stocks are Selling Off AGAIN... (Good News for Tesla Stock)
Overall Thesis
The host views the selloff as concentrated in AI, software and cybersecurity while capital rotates into other sectors. He expects further downside for Alphabet but believes Tesla will outperform into year-end, potentially reaching $500 or higher if major macro uncertainties clear.
Narratives
TSLATeslaThe host expects Tesla to outperform into year-end and trend higher over the next three to twelve months. He argues that improving fundamentals and easing macro uncertainty could support a $500 or higher share price by year-end.
Key Arguments
- Tesla is holding around $400 while several AI-related stocks sell off.
- Positive institutional options activity and some short covering support the near-term backdrop.
- Positive free cash flow and rising cash balances distinguish Tesla from companies financing capital expenditures through dilution or debt.
- FSD subscription growth and potential European approval support the operational outlook.
- Clearing macro events and favorable seasonality could remove constraints on the shares.
Risks acknowledged
- A break below $400 is possible, and volatility will continue.
- Spending is rising, and EPS and EV tax-credit concerns remain.
- The Roadster event is unlikely to materially change fundamentals.
- The year-end target depends on macro events resolving favorably.
GOOGLAlphabetThe host considers Alphabet's selloff justified and explicitly expects additional share-price declines. He attributes the weakness to earnings misses, dilution and uncertainty around search competition and future capital spending.
Key Arguments
- The host reports misses in net income, search revenue, headline revenue and EPS.
- He argues that investor dilution compounds weak earnings.
- Capital expenditures are expected to rise significantly next year without a quantified increase.
- AI disruption of search is contributing to the negative market narrative.
Risks acknowledged
- The host presents AI taking share from search as a market narrative whose correctness remains uncertain.
Predictions (1)
MSFTMicrosoftThe host views Microsoft as relatively resilient compared with Alphabet and suggests its shares could improve in after-hours trading. He also identifies debt financing for capital expenditures as a source of investor concern.
Key Arguments
- Microsoft remains close to its all-time high and has fallen much less than Alphabet.
- Some selling may reflect algorithmic pressure across related stocks.
- Upcoming earnings from other companies could influence trading.
- A proposed $20 billion bond sale reinforces concerns about financing capital expenditures.
Risks acknowledged
- Investors are increasingly wary of debt and dilution used to fund AI spending.
- The possible after-hours improvement is tentative.
Predictions (1)
NOWServiceNowThe host believes ServiceNow's approximately 26% decline reflects broad fears about AI disruption more than the earnings alone justify. He still acknowledges slowing growth and elevated expectations.
Key Arguments
- The selloff appears driven partly by fears about the future of software businesses.
- The reported earnings do not, in his assessment, justify the full decline.
Risks acknowledged
- Current remaining performance obligation growth is slowing.
- Prior share-price gains raised the earnings hurdle.
The host describes a broadening market beneath weakness in large AI-related names, citing a sharp improvement in S&P 500 participation above the 50-day moving average. His broader market outlook depends on oil infrastructure avoiding damage and major policy and geopolitical uncertainties clearing.
Key Arguments
- Many non-AI sectors are advancing despite weakness in headline indexes.
- The percentage of S&P 500 stocks above their 50-day moving average has improved.
- Fearful investor positioning may already reflect substantial bad news.
- Earnings and the Federal Reserve meeting are characterized as clearing events.
Risks acknowledged
- AI-related stocks, software and cybersecurity remain under pressure.
- An attack affecting oil infrastructure could change the market impact of the Iran conflict.
- Economic data could reinforce expectations of a Federal Reserve rate hike.
The host considers Fortinet's roughly 20% to 22% earnings-related decline excessive relative to the reported numbers. He acknowledges that strong prior performance raised expectations and contributed to cybersecurity volatility.
Key Arguments
- The magnitude of the decline appears disproportionate to the earnings figures in the host's assessment.
- Fortinet's selloff is affecting other cybersecurity stocks.
Risks acknowledged
- The stock had performed strongly before earnings, creating a higher hurdle.
The host describes Rubrik as a favorite cybersecurity company while discussing its sharp intraday volatility. He reports a rebound from the day's lows without making a forward share-price prediction.
Key Arguments
- The shares recovered from roughly $127 toward $131 during the session.
- Cybersecurity selling is linked to Fortinet and strong prior sector performance.
Risks acknowledged
- The sector is experiencing substantial volatility and earnings-related selling.
Hedges & Caveats
- Tesla's $500 year-end scenario depends on earnings, Federal Reserve policy, elections and the Iran conflict clearing.
- Tesla may break below $400 and experience substantial volatility.
- Iran-related market resilience depends on oil infrastructure avoiding attacks.
- The host does not favor hardware stocks personally despite considering their broader thesis intact.
- The host states that his commentary is not financial advice and that he is not a fortune teller.