Amit: All right. Hello everybody. Welcome back to another episode of the market close. We are live. I'm sorry I'm a little late, but we are good to go. We've got a lot of stuff to talk about today.

Amit: Obviously, it's been a pretty rough day in the stock market to say the least. We've had a little bit of a V-bounce since the very lows. So S&P 500 is down. It's not down as bad as it was during the middle of the day. We're at 667. We got all the way down to 663, which is why a lot of names ended up recovering just a little bit. And then we got Tesla earnings. We got Tesla earnings in 12 minutes. We're going to see what happens with Tesla. We're going to talk about why the market took a little bit of a dump today. And I need someone to help me out. Ladies and gentlemen, Mr. Jose.

Jose: What's going on, V? How's everything?

Amit: It's going good. It's been a quite a fun day in the markets to say the least. Um, first question for you. Did you buy any dip today?

Jose: Um, I sold the puts on Nebas. That's pretty much it. But haven't really purchased any pure stock. Not just yet. If this is the turnaround, I'm happy. If it's not, I'm also happy with the little things I did.

Amit: Okay, so I went shopping. I went shopping. This is what I did. These are little nibbles, but these are the prices. Palantir 172.38. Bought Palantir 171 like three weeks ago. So I'm like, all right, it's a dollar up. Nvidia 177.5. I've not touched Nvidia since 159. This is the first time for Nvidia. SoFi. I finished the 500 shares that I said I was going to buy, and if I didn't, people would have killed me. 26.88. That's the average on SoFi. And then, of course, we had to do Grabby Grab. So, 5.55 on Grabby Grab. So, little nibbles across the board. We got to extreme fear. So, at that point, I was just like, "All right, it probably is worth at least nibbling a bit."

Amit: I don't know if we're out of the woods. I don't know how this is going to change. We did get a V-shape towards like basically the last 50 minutes, and now we are just at fear or on the edge of extreme fear. but it's not as bad as as it was before.

Amit: Now, what is the reason for why this is happening and then we're going to get into Tesla. I didn't see a ton of reasons today. I did get one headline that could be kind of the the main argument. This was a Reuters report that came out around 12:30. Trump administration considering a plan to restrict globally produced exports to China made with or containing US software. New export controls could curb exports on wide range of goods to China.

Amit: It seems like that was the core argument that anything that's created with US software in terms of globally produced goods and services which I think is a lot of stuff created with US software that would have an export control. Now obviously this is a very aggressive export control and the whole idea is to go against China's export controls against rare earth minerals. We're going to see what happens. Trump also tweeted that he is going to be tariffing cattle from Brazil for 50%. I don't know if that really tanked the market, but that definitely added fuel to the fire after that China export control rumor that Reuters put out. And so I think you put those two together along with just a general choppy October that we're dealing with. That's why you had a little bit of a draw down. And that's some of the pain that I think we're experiencing today.

Jose: And you know, it's crazy. I think I was on here, I don't know if it was Thursday or or or Friday last week. I forget what day it was, but it was late last week, and I was telling you how I was feeling unease of the market.

Jose: Yes. It's crazy to feel that my portfolio obviously has taken quite a hit in the past few days, but like I feel so much better now. It's like a a a big lift has been lifted. I mean it's obviously sucks, but I feel a little bit more excited about the market now.

Amit: Well, I 1,000% agree and I would love people in the in the chat to kind of give their perspective on this as well. I think that some of these names like an Oklo that's still down 15% on a day, like a D-Wave that is down 14% on a day. A lot of these names down about 30 to 40% for the week. At the end of the day, they needed to get flushed out. They needed to get flushed out. It was not healthy to see rare earth mineral stocks just go to the moon. All of them down 7 to 8% on the day. And I think it actually gives us a really good leg up for the or a really good opportunity to take the next leg up if we could have really good earnings. It's just a question of, you know, can we get some good earnings? And today we're going to see with Tesla.

Amit: Before we talk about Tesla, one last thing I want to say is some of these momentum stocks again, they don't have any fundamentals. A lot of them don't even take shareholder questions. So Google, if it has a couple bad months, they can have a blowout quarter. Things change these momentum names. And the worst part about this draw down is that if they don't have anything to report on earnings, earnings is not going to save them. In fact, a company like VRT that beat earnings by 20% had, you know, phenomenal earnings, this stock is barely green on the day.

Amit: So stocks that can't even go green on good earnings. I can only imagine what would happen to some of those names that have nothing to say. And then the other sort of structural analysis around this is that if momentum dies out and people don't want to be left holding the bag, you know who's left? By the way, speaking of holding a bag, Beyond Meat, this was $7.50 in the morning.

Amit: It's back to 350. Jose, any thoughts on the vegans of the world taking over?

Jose: No, I mean, it's crazy when when you see some of these stocks of 100%. I mean, congrats to those that are able to to make the the bucks or or trade with it. Uh, but it definitely sucks for for the backholders that uh that try to play this game, which is is pretty intense. That's why I typically don't play. I'm not a fan of of losing money and and usually I'm bad at at timing things. So, I would probably be the worst trader ever.

Amit: Yes. I think maturing is realizing that if you miss the the timing on the entry, then you probably shouldn't be chasing it because not that many good things can happen when when it goes that route.

Amit: All right. Pump or dump poll is live in the chat for Tesla. We got seven minutes until we get the numbers. I mean, Jose, give me your raw thoughts. Tesla's an important company in the world of AI. What do you think we can expect?

Jose: Uh, I mean, I definitely love to hear when Elon or the team talks a little bit more about the AI innovations. I saw one of the comments coming in through AI I think it was even directed towards me was like, is Tesla really an AI company? I really do believe it is. I mean, it's it's definitely FSD is the greatest thing ever. I mean I every time I drive I turn that baby on. The new version just continues to kill it. I mean they have their own semiconductor Tim team to develop their own chips. They build massive data centers within the obviously ex uh in independently for XAI but for their own platforms. They also kind of built their own form of AI infrastructure as well. So I mean this I could care less about the cars.

Jose: Obviously, the numbers right now is all about the cars, but I want to hear more from Elon about what's happening here in the AI space, what's happening here in the energy space, obviously with their energy revenue. We can get some sentiment of how that's progressing.

Amit: Yeah, I agree. It's not about the the auto business anymore. Obviously, it's about what's going to happen with everything else going on in the world of Tesla. Tesla right here, as you can see, 56 cents EPS expected. That would still be down, if I'm not wrong, about 15 to 20% year-over-year. And in revenue, 26.7 billion. So again, the street's not super optimistic on the quality of numbers in terms of the year-over-year growth rates. Um, but they are thinking that, you know, maybe if Tesla can beat these numbers, then those expectations would not be that bad.

Amit: Here's the question to the audience. Tesla right there at 439. Do you own Tesla? And if you want to disclose how many shares, your average, you can just put it in the chat. We'll highlight some of the people that are in here. I know there's probably some Tesla OGs that are in the chat, but I mean, what do people think is going to be the metric that either dumps the stock or pumps the stock? Is it going to be something Elon says that pumps it, or is it going to be something that, you know, Tesla really misses on badly theoretically that could dump it? I'd be very curious to see what a lot of people think. By the way, in my chat, 57% of people say dump. So, we got a decent amount of people that are not that excited about it. Uh, Jose, if you had to guess pump or dump, I mean, what side would you lean on towards?

Jose: I I don't know. Again, I'm always wrong, but I'm going to say here, I'm feeling like a little pump here on on Tesla for earnings.

Amit: You're just trying to get the crowd on your side. You're just trying to get the crowd on your side.

Jose: No, no, cuz I don't know if I just jinxed it. Uh, so so they're going to hate me. Um, but I mean for one thing that I I I do find interesting kind of going back to the core business is one thing that they've talked about in prior quarters was that they were going to release a cheaper model um in form of of uh to have more accessible uh to more customers and they did do that this quarter.

Jose: I don't know was a part of this quarter but uh they did at least release it within the past few few weeks and my question I I wonder if analysis is going to answer this is is this actually a real product. Obviously, it's a real product, so we they have it there. But is it a product that is just meant to make shareholders happy to say, "Look, we did it." Or do they have an actual market opportunity with this as it's about $5,000 cheaper, but you're losing off so many things. So, I don't think they're going to just say, "Ah, it's just to make the shareholders happy." But I wonder if some analysts are going to put some pressure of like, what was are you really seeing demand for that standard version or was it just something because you promised a cheaper model?

Amit: Yeah, and I think a lot of people were a bit disappointed, including myself, with how the roll out of that cheaper model came out because it just wasn't that much cheaper. But maybe Elon can give some clarity there and that could change a lot of these perspectives. By the way, folks, I mean, I thought it would be a crappy day for Tesla to report. It's kind of turning into an okay day. Look at SoFi 26 to 27. S&P only down half a percent. It was down 1.5 at the worst. Nvidia 176 to 180. Tesla got to 429, now 439. Palantir 171 to 175. Hoodie 120 it touched to 127. You got grabbed from 540 to 561. Meta's basically flat on the day.

Amit: Amazon still down 21797. Salesforce down a little bit. But it looks like the algos are getting back to be a bit more optimistic and again I do think it was more algorithmic when we saw the draw down intraday because there just didn't seem to be that much of a fundamental reason. If we can get some good earnings starting with Tesla that could definitely help.

Amit: We also have Lamb Research in the semiconductor space. We have IBM. You know, IBM's been working on quantum computing. Google announced a breakthrough on quantum computers today. Elon actually responded to what Sundar said about their breakthrough on their quantum algorithm. And uh Elon said, "Congrats. Look like quantum computing is becoming relevant." So, you got Elon and Sundar that are theoretically bullish quantum. The quantum stocks really didn't take off on these comments because they're they're just still getting hit from the momentum drawdown. Uh but you do have some catalyst right here getting the market excited.

Amit: Then you have Kinder Morgan. You have Crown Castle, SAP, and the software world. And then obviously you have Tesla and we're gonna see what happens there.

Jose: Yeah, Lamb Research will be pretty interesting. I mean we already had ASML report earnings which is in the equipment space. So similar to Lamb Research in terms of overall market and TSN kind of already mentioned that they were going to see increment in their bottom range of capital expenditure. So uh Lamb Research definitely helps a little bit more in advanced packaging and in the memory space which is dealing with HBM. Uh, so I'm excited there. I don't own it, but uh I'm hoping for a great call from Lamb Research there.

Amit: Okay, here we go. Buckle up. We got a bunch of earnings. I think the calls at 5:30, so we got about an hour and a half to dissect all these results, get as much analysis as we can. The deck's probably going to come out in 15 minutes. And uh the results might come out like four, so we might have to wait five minutes. But we're going to see how this ends up playing out.

Amit: It's crazy because today's been a wild day across the board. Triple V, thank you for the $200 super chat. Thank you for being here. And it doesn't even feel like it's Tesla earnings day because of the ups and downs of the market and how just volatile and gut-wrenching it's been up or down, but it is Tesla earnings and Tesla earnings will officially be starting off big tech earnings for Q3. Ladies and gentlemen, thank you for being here. Wednesday, October 22nd, 4 p.m. The stock market is now closed.

Amit: All right, we are done for the day. We are done for the day, at least for the regular hours. And now we get to see what happens with these results. Tesla ends the day at 438, down about 1%. Nvidia, I mean, basically a nothing burger. Barely down half a percent on the day. Palantir was down 3%. Hoodie down 3.5. A lot of these names, they all went down together and then they came back up together at the same time. AMD from 224 to 230. SoFi 27 on the close. Grab actually got a 560 close. Not too bad for Grab.

Amit: Tesla 439. So, we should be getting results in about uh literally a couple minutes, maybe less. As soon as we get the results, we're going to see what we got and we will go from there.

Amit: I think the stock moving from 330 to 430 even I didn't expect that and I think that was because the Elon compensation package and him buying a billion dollars worth of stock. So I really don't know what the company is going to say to like get the stock to be that excited. So I don't know. I really don't know. But I do think they I don't think they have to go down. I just don't think they have to go to the moon either.

Jose: And do you think we hear anything about Optimus or or or the robotics platform or it's still too far for your thoughts?

Amit: I think Elon's going to talk about it. I just don't think there's going to be anything substantial in terms of like real results, right? And so, and if there is, I think that's the wild card. I think people get really excited. If not, then yeah, I don't know what we're going to see.

Jose: I I don't know if it was this quarter where we saw a few articles that um the numbers that they promised were actually are are actually going to be a lot lower. So I wonder if that comes out during the uh Q&A session uh where where some of the op I think they mentioned somewhere around a thousand um in the first year and some reports came out that it was going to be much lower than that for Optimus, right?

Amit: Yeah. You said he would do a million by like 2030. So I mean it's just a lot of ambitious targets. I want him to announce Walmart ordered 100,000 robots. You know, if Amazon just put out a report yesterday saying they're thinking of getting rid of 600,000 humans for robots, then theoretically the demand should be there from a Walmart or a FedEx or like Elon should be able to get somewhat of an agreement even if it's not real revenue yet and and make it material. But, you know, that's what I think would actually get the street to put it into their valuation models.

Amit: Don't have numbers yet. We are going red. We were going green for a little bit. It's basically flat. 437.

Amit: Oh, no. I got it. Tesla missed. Missed by 11% on EPS. Uh 50 cents versus 56 cents expected. So, that is a miss. Revenue. They beat revenue they beat by 5%.

Amit: A miss and a beat. A miss and a beat. Wow. They actually missed on EPS. I mean, even last time they had a little bit better of a I think they only missed by 2% this time 11%. 50 cents versus 56 cents, 28.09 billion versus 26.7. So, you do have a uh basically 1.3 billion beat. EPS is down 31% year-over-year, no earnings growth, negative earnings growth. Revenue at least is up 12%. So, you do have some revenue growth, but EPS is down. The stock goes red 431.

Jose: See, I told you I jinxed it. Um Um This is This quarter still had all the credits though, right? For for um Yes. electric vehicles.

Jose: So now it's it's going to be How does that change the I guess the outlook for the upcoming upcoming quarters for this?

Amit: To be fair though, it's down 1.3%. Like I mean it's it's not even it's not even kind of aggressive, right? And this is kind of what I've been predicting for the past couple days that it doesn't have to go down a lot, but it doesn't have to go up a lot. I think every Tesla shareholder should be really happy if it just doesn't tank because one could argue there might not have been a reason for it to go up as much as it did over the past couple weeks. And as you can see on the stock, you're not really getting a move up or down.

Amit: Maybe guidance pumps it. We're going to wait for the deck. The deck should be out in a second and then we'll go throw the numbers. But outside of guidance or Elon saying something good, I didn't expect them to miss EPS. I really I thought I thought I thought they would come in line on EPS. But there you go.

News Anchor: Morgan, it is a beat on the top line and a miss on the bottom line for Tesla. The company bringing in revenue better than expected 28.1 billion. The street was expecting 26.36 billion, but EPS comes in at 50 cents a share. 50-0 50 cents a share. The street was expecting 55 cents a share. So, not a huge miss, but it is a miss nonetheless. We're going to go back through the numbers, guys. Hopefully, we'll get some more details in terms of uh future plans, future obligations, and the kind of concrete details that investors are looking for when it comes to things like robo taxi, autonomous vehicle development, etc.

Amit: All right, let's get into some of these numbers. So, this is what we've got on Tesla. Third quarter revenue 28.1 versus 26.6. Uh EPS50s. Free cash flow 3.9 versus 1.25 billion. So they did beat on free cash flow. Gross margin 18% versus 17.2. They did beat on those gross margins. That is actually way better than I thought. Operating income 1.62 versus 1.65. They missed on operating income. Probably why they missed on uh net income as well. And then overall EPS again was lower than expected for Tessy.

Amit: So they beat on margins, missed on operating income, they beat on free cash flow by a large amount. The credits might be helping their free cash flow.

Jose: And that's what I saw. I mean, massive free cash flow, year-over-year growth and sequential growth. I would have because the slideshow the up the deck is up, but that was something that really shocked me there.

Amit: Okay, let's pull up the deck and let's pull this out. Okay. So, let's first of all read their letter, their their small summary, and then we'll keep going from there. Okay, here we go. In Q3, the Tesla team achieved record vehicle deliveries globally, showing C strength and growth across all regions while also achieving record energy storage deployments across the residential, industry, and utility utility sectors.

Amit: The strong performance resulted in both record revenue and free cash flow generation in the quarter. We continue to launch new products that excite our customers across automotive and energy. We launched the Model Y L and Model Y performance and further expanded our vehicle offering with the Model 3 and Model Y standard, our most affordable vehicles. We also unveiled the Mega Pac 3 and Mega Block, which will further simplify large battery installations by reducing cost and time to deploy.

Amit: We believe our scale and cost structure will enable us to navigate the shifting market dynamics across the globe more effectively than our peers with advances in AI making our products the most compelling in the market. Our focus remains on scaling our core hardware business by maximizing our deliveries and deployments our as these products will deliver increasing value to our customers over time via services powered by AI. Every Tesla vehicle delivered today is designed for autonomy while every Tesla energy story product energy storage product is capable of being enhanced and optimized by your virtual power plant or auto bidder functionality.

Amit: We continue to deliver a fleet of products that brings AI into the real world as we pursue a future of sustainable abundance as outlined in our master plan part 4. While we face near-term uncertainty from shifting trade, tariff, and fiscal policy, we are focused on long-term growth and value creation. We are prudently making the necessary investments in our business, including future business lines that we believe will drive incredible value for Tesla and the world across transport, energy, and robotics.

Jose: I mean, definitely was a nice improvement in overall revenues, right? I mean, quarter 2 was 22 billion and and quarter 1 was 19 billion. Here they did 28 billion uh this quarter. So, um not sure if everybody's just trying to buy those cars before the end of the um the credits ended. Um but there was definitely a nice pickup in in revenue growth where you even saw a year-over-year growth in the automotive segment as well.

Amit: Yeah, energy services uh increase in vehicle deliveries that helped. They said our operating income decreased 40% resulting in a 5.8% operating margin. The reason was because of SBC, lower credits, lower onetime FSD revenue recognition, higher average cost per vehicle due to lower fixed cost absorption absorption, and an increase in operating expenses. So, kind of the typical things any business would have to deal with, but they were a bit more aggressive this quarter for Tesla. And that's why that operating income came in just not as strong as some people expected. 438 is what you've got on the stock.

Elon Musk: Thank you. We're we're at a critical inflection point for Tesla and our strategy going forward as we bring AI into the real world. Um I think it's important to emphasize that Tesla really is the leader in real world AI. Uh no one can do what we can do with real world AI. Um, I have pretty good insight into AI in general. I think that Tesla has the highest intelligence density of any AI out there in the car. Um, and that is only going to get better.

Elon Musk: Um, and we're really just at the beginning of scaling at a at a quite massively full self-driving and robo taxi and fundamentally changing the nature of transport. I think people just don't don't quite appreciate the degree to which this will uh take off. um where that that that it's honestly it's going to be like a shock wave.

Elon Musk: Um so it's it's a you cuz the cars are all out there. there. You know, we have millions of cars out there that with a software update become um full self-driving cars and um and you know, we're making a couple million a year um and and and in fact with the advent of with with what we see now as as a clarity on achieving full self-driving, unsupervised full self-driving I should say, um I feel confident in expanding Tesla's production. Um, so that is that is our intent to expand as quickly as we can our future production.

Elon Musk: Um, so I was I was reticent to do that until we had clarity on on uh achieving uh unsupervised full self-driving. But at this point I I feel like we've got clarity and it it it makes sense to um expand production as as fast as we reasonably can.

Elon Musk: uh we're also making huge uh um make making huge impact on the energy sector with uh with with battery storage. So with both the power wall um and especially with the mega pack uh we are dramatically improving the ability to um generate more energy from the grid. Let me sort of talk a little bit about that which is if if you look at total US energy um capability for example there's roughly a terowatt of of of continuous power available in the US but the average usage over a 24-hour cycle is only half a terowatt because of the big difference between day and night usage.

Elon Musk: um if you buffer that buffer the energy with batteries, you can effectively double the energy output in the United States just with batteries building no incremental power plants. Um and it's very difficult to build power plants. So they take a long time. There's a lot of permitting and it's not an industry that's used to moving fast. So we see the potential there for Tesla battery packs uh to greatly improve the um the energy output per year for any given grid US or otherwise.

Elon Musk: Um, we're also on the cusp of of something really tremendous with Optimus, um, which I think uh, is likely to be or has potential to be the biggest product of all time. Um, and, uh, it's it's a a difficult project. Um, and it's worth noting that it's not like it's it's just automatic. Um I'm unaware of any robot program by uh Ford or GM or you know any by US sort of car companies. People like I think maybe think of Tesla as as a car company. We mostly make cars um and battery packs. Uh but uh so it's not like it's not just like an obvious fall off a log thing to make Optimus.

Elon Musk: but but we do have the ingredients um with of real world AI um and exceptional electrical mechanical engineering capabilities um and the ability to scale production which I don't think anyone else has all of those ingredients.

Elon Musk: and uh we look forward to unveiling Optimus V3 um you know probably in Q1. I think it'll be ready for uh to show off and uh that that I think is going to be quite remarkable. Um, if you It won't even seem like a a robot. It'll seem like a person in a robot suit, which is kind of how we started off with Optimus. Um, but it it'll seem so real that you'll need to like poke it, I think, to believe that it's actually a robot.

Elon Musk: Um, and and obviously like the the the the real world intelligence we're de we've developed for the car. um most of that transfers to Optimus. So, it's a it's a very good starting point.

Elon Musk: Um in conclusion, uh we're excited about the you know updated mission of Tesla which is sustainable abundance. Um so going beyond sustainable energy to say sustainable abundance is the mission where uh we we believe with uh with Optimus and self-driving um that uh you can actually create a world where there is no poverty uh where everyone has access to the finest medical care Um like Optimus will be an incredible surgeon for example. Um and imagine if everyone had access to an incredible surgeon.

Elon Musk: Um so so I I think there's you know of course we need make sure Optimus is safe and everything but but I I do think we're headed for a world of sustainable abundance and that I'm excited to work with the Tesla team to make that happen.

Vaibhav Taneja: Thanks, Travis. Q3 was a special quarter at multiple levels. We set new records not just for deliveries and deployments, but also around a range of financial metrics from total revenues, energy gross profit, energy margins to fresh free cash flow.

Vaibhav Taneja: On the capex front, while we are expecting to be around 9 billion for the current year, we're projecting the numbers to increase substantially in 2026 as we prepare the company for the next phase of growth in terms of not just our existing businesses, but our bets around AI initiatives, including Optimus.

Elon Musk: Okay, so I'm I'm going to give quite a long answer to this question because it's because uh I have to unpack this question and then and then answer the unpacked version. Um, so, uh, first of all, uh, I have nothing but great things to say about Samsung. They're an amazing company. Um, and Samsung, it is worth noting, um, does manufacture, um, our AI4 computer and does a great job doing that.

Elon Musk: Um so um now w with the the AI5 um and here's I I need to make a point of clarification relative to some comments I've made publicly uh before which is we're actually going to focus both TSMC and Samsung initially on AI5. So, um, the the AIF chip design by Tesla is I I think it's an amazing design.

Elon Musk: Um, I have spent almost every weekend for last last few months uh with the chip design team working on AI5. And I I don't hand out praise easily, but I have to say that I think I think the Tesla chip team is is really designing an incredible chip here. This is by some metrics the AI5 chip will be 40 times better than the AI4 chip. Not 40%, 40 times.

Elon Musk: um because we we have a detailed understanding of the entire software and hardware stack. So we're designing the hardware to uh address all of the pain points in software. Um, so I don't think there there really isn't anyone that's doing this the the entire stack um all the way through real world uh you know calibrating against the real world where you've got cars and robots in real world that like we we know what the chip needs to do and we know what and just as importantly we know what the chip does doesn't need to do.

Elon Musk: this this is a beautiful chip. Um, I've poured so much life energy into this show personally. Um, and I'm I'm confident this will be this is going to be a winner next level. Um, so it makes sense to have uh both Samsung and TSMC focus on AI5.

Elon Musk: you know, my like like my, you know, fundamental concern with regard to how much voting control I have in Tesla is if I go ahead and build this enormous robot army, can I just be ousted at some point in the future? Um, that's my biggest concern. if I that's that that is the the that is really the only thing I'm trying to address with with this uh so what's called compensation but it's not like I'm going to go expend the money it's just you know if we build this robot army um do I have at least uh a strong influence over that robot on the not not control but a strong influence that's that's what it comes down to in a nutshell um like I don't feel comfortable building that robot on me if I don't have at least a strong influence

Steve: Yeah, I'm a little surprised it's not down more to be honest with you.

Amit: Did you think it was that bad of a quarter?

Steve: Yes. Now look, I didn't read through the note. I just glanced at the numbers, but yes, this is not good for Tesla.

Amit: Okay, so give me your raw thoughts. EPS miss revenue in line. What do you think?

Steve: Yeah, I mean look, this is completely raw thoughts and I may change my mind later, but I don't think I'm going to because this is the best the auto margins are likely to be for quite some time considering that you have the regulatory credits becoming extinct in Q4. So, they could have pulled a lot of stuff forward. We that remains to be seen. I don't think they're going to have as strong as a holiday season as they would have in the past.

Steve: Um, the energy is very interesting. I actually think the energy numbers were really good on the top line because as X AI and other companies build out more data centers, they're likely to get more battery packs, that type of thing. I don't think they're going to get a big bump in residential solar and power walls just because it's not going to be as advantageous for people to spend 30, 40, 50 grand to put those systems in.

Steve: Um, the big thing that I'm looking at right now is their gross margin and operating margin going down. And I don't see how they can get that back up with credits going away. they're going to need to do something else. Robots can't come fast enough. This earnings call is so important. If they botch this earnings call, this is going under 400. If they have a good if they have a great earnings call, this could go to 475.

Steve: This is a make-or-break moment for when they're actually going to start generating real revenue from not just optimist but actually doing something with robo taxes and actually explaining what the hell they're going to do with it because this is on the surface not there's a reason why this is not going parabolic right now.

Steve: and when I do the number like I'm putting Tesla into my model right Now, I mean, $6.83 billion in free cash flow over the TTM. Even if you extrapolate out, even if I was to say, okay, they did four billion this quarter. Let's just say they match that in the next four and they're going to do 16 billion going forward, they're still a $1.4 trillion company. That's not a lot of free cash flow for a market cap of that size. So, I just I don't know. I'm not thrilled.

Amit: Is there anything positive you saw or are the numbers just so egregious that you don't know how to make sense of it?

Steve: I need to read through the entire report. Like I said, I just glanced through the numbers, but the numbers that I'm seeing do not justify this market cap and I'm a Tesla shareholder.

Steve: look, I love that the free cash flow is up 46%. I don't like that the adjusted IBID is down 9%. Yeah. In a quarter where you're not getting regulatory credits back. Like we know that's not happening.

Steve: And I don't like the margins are going down. Like do we think margins are going to get better where they're going to get back to an 11 or 12% operating margin in the next couple of quarters when you're at 5.8? I don't think so.

Amit: Okay. So, do do you think Elon says anything on the call that gets the stock to react in a positive way?

Steve: Absolutely. He's got to say, "Listen, big surprise. Optimus is coming in 2026 and we expect to sell 250,000 units and then 2027 we sell a million units and there's such a huge backlog from companies this won't even be available to the public till 2030." I think if he says that this goes over 500.

Amit: dude. But the funny thing is he can say it and like who cares? Like if it doesn't happen, it's Elon, right? It's like no one's gonna whatever.

Steve: So he theoretically could say it.