Oh Sh*t... Tesla Stock.
Overall Thesis
Tech and AI stocks are under severe pressure due to SK Hynix missing earnings expectations and capital constraints, though Tesla may rally soon, with upcoming earnings from Microsoft and Meta critical to determining whether capex commitments can sustain the AI trade.
Narratives
The host sees the Nasdaq down over 10% from highs and expects continued volatility or a modest correction into the pre-midterm period, without expecting a large 20-50% crash. He suggests a further slide to the 20-day moving average, roughly 14% off highs, is a plausible scenario.
Key Arguments
- Nasdaq down over 10% from highs already
- Pre-midterm election period historically brings volatility and corrections
- AI stocks unlikely to rally back quickly given capex uncertainty
Predictions (1)
The host frames Meta's earnings reaction as almost entirely dependent on its capex guidance rather than revenue or EPS, expecting the anticipated 135-150B range to already be priced in with limited surprise potential either way.
Key Arguments
- Capex guidance, not revenue/EPS, will drive the stock reaction
- Consensus capex expectations (135-150B) likely already priced in
The host views Apple, alongside Tesla, as an attractive large-cap opportunity outside of the AI/capex trade, benefiting from rotation away from AI stocks and hyperscalers.
Key Arguments
- Seen as a rotation beneficiary if AI/hyperscaler stocks stay out of favor
Predictions (1)
The host believes Tesla is oversold and respecting a key trend line near $300, and expects a rally back toward the 360s/20-day moving average if the Fed avoids a rate hike and AI stock pressure eases. He cites strong operational momentum (robotaxi, FSD, energy, order backlog) as reasons the 40% drawdown from highs is unwarranted.
Key Arguments
- Tesla is respecting a trend line around $300 with strong technical support
- RSI at 26 signals oversold conditions
- Operational momentum in robotaxi, FSD subscriptions, energy division, and vehicle order backlog
- Rotation trade favoring non-AI large caps like Tesla and Apple if hyperscaler capex disappoints
The host discusses SK Hynix's earnings miss versus estimates despite strong year-over-year growth, framing it as the catalyst for the broader AI stock selloff. This is presented as past/reported data rather than a forward prediction on the stock itself.
Key Arguments
- Revenue of 54.6B missed the 57.7B estimate despite 257% YoY growth
- Q3 DRAM/NAND growth guidance seen as unimpressive
- Strong profitability metrics (83% gross margin, EBITDA up 411% YoY) not enough to offset the miss
The host argues Microsoft's stock reaction will hinge on capex guidance relative to the ~190B this-year and ~220B next-year expectations, with no scenario offering a clearly favorable risk/reward for the stock.
Key Arguments
- Capex guidance matters more than revenue/EPS for the stock reaction
- Guidance in line with or slightly above expectations likely insufficient to ignite a rally
- A capex cut would be very negative for AI stocks
Hedges & Caveats
- INVEST AT YOUR OWN RISK AND NEVER LISTEN TO ANYTHING SAID IN THESE VIDEOS AS FINANCIAL ADVICE. BECAUSE ITS NOT.
- Earnings outcomes for Microsoft and Meta are uncertain and could swing market sentiment either direction
- Capital availability and lending conditions are tightening, creating unpredictable market dynamics
- Risk-reward for broad market indexes is described as 'not great'