Hello everyone. Markets are poised to go higher as we get interest rate cuts in a US China trade deal. Jord is going to explain why Tesla and robo taxis finally prove that macro investors are wrong.And Amazon just unveiled a brand new robotic system that is going to blow your mind. We're live today from the desk of Anthony Pompiano. [Music] Before we get into today's show, my goal is to get to 1 million subscribers on YouTube.Right now, we have 34,392. Someone in the comments said we should just get to 50,0 ...

Core Insights - Tesla's Q3 earnings report shows an adjusted EPS of $0.50, below the consensus estimate of $0.54, while revenue of $28.10 billion exceeded expectations of $26.36 billion [1][2] - Gross margins for Q3 were reported at 18%, significantly higher than the estimated 7.2% [2] - Free cash flow for Q3 was $3.99 billion, beating the estimate of $1.25 billion [2] Financial Performance - Q3 adjusted EPS was $0.50, lower than the consensus of $0.54 [1] - Revenue for Q3 reached $28.10 billion, surpassing the expected $26.36 billion [1] - Gross margins were reported at 18%, well above the estimate of 7.2% [2] - Free cash flow was $3.99 billion, significantly higher than the forecast of $1.25 billion [2] Market Outlook - Concerns are raised about EV demand in the U.S. following the expiration of EV tax credits, with expectations of declining deliveries in Q4 and 2026 [49][50] - Analysts predict a potential decline in Tesla's total deliveries globally due to the impact of the tax credit expiration [49] - The introduction of lower-priced models may not significantly boost sales, as they still remain at the higher end of the price spectrum compared to competitors [51][52] Strategic Initiatives - The focus on autonomous driving and robotics is seen as a critical growth area for Tesla, with expectations for significant advancements in the coming years [54][56] - The upcoming shareholder vote on Elon Musk's $1 trillion pay package is anticipated to pass, as it aligns with the company's growth targets [63] - The rollout plan for robo taxis remains unclear, with analysts seeking more information on testing and deployment strategies [46][61]

Tesla Overview - Tesla reported an earnings miss but exceeded revenue expectations, driven by strong deliveries in Q3, which helped recover from poor performance in the first two quarters [1][2] - The market is focused on how Tesla will transition from its current EV business to future developments in robot cars and humanoids, with investors seeking clarity on this transition [2][3] Production and Growth Insights - Elon Musk indicated an increase in production capacity, suggesting confidence in the growth of EV sales in the near future, although there are concerns about the pace of scaling production for humanoids [3][4] - There is a belief that both EV and robo taxi markets can grow simultaneously, but the cost of bringing robo taxis to market remains a concern, with current costs estimated at over $1 per mile [5][6] Market Dynamics and Future Projections - To create a significant market for robo taxis, costs need to be reduced to below $0.75 per mile, but current projections indicate that substantial impact on Tesla's P&L may not be realized until 2030 and beyond [6][6] - The stock price targets have been adjusted, reflecting a cautious optimism as shares recover from early losses [6] Rare Earths and Supply Chain - The U.S. and Australia have signed a critical minerals agreement, with an $8.5 billion project pipeline and a $3 billion investment over six months, aimed at sourcing rare earths outside of China [7][8] - The U.S. consumes approximately 50,000 tons of rare earth magnets annually, highlighting a significant gap in domestic production capabilities that needs to be addressed to achieve self-sufficiency [8][9] Cost Structure and Market Uncertainty - There is uncertainty regarding the cost curve for rare earth materials in the U.S. compared to China, with expectations that U.S. prices will be higher due to different cost structures [10][12] - The market has yet to determine the appropriate pricing for these materials, reflecting the uncertainty in how pricing will evolve in the U.S. and Western markets over time [12][13]

Group 1: Tesla's Financial Performance - Tesla's profits fell by more than 25% despite record car sales, leading to a pre-market share drop of over 3% [4][5] - Revenue exceeded $28 billion, beating street estimates, but the operating margin dropped to 5.8%, nearly half of the previous year's margin [4][5] - Record deliveries in Q3 were largely driven by a rush to purchase vehicles before the expiration of federal tax credits, with sales declining in other markets, including China [6][7] Group 2: US Sanctions and Global Oil Market - The US imposed sanctions on Russia's two largest oil companies, Rosneft and Lukoil, causing a surge in oil prices [2] - Approximately 20% of China's crude imports come from Russia, raising concerns about secondary penalties for companies dealing with sanctioned entities [3] Group 3: Semiconductor Industry Insights - The semiconductor sector is under scrutiny, with companies like Intel and ST Micro Electronics facing investor concerns over profitability trends and conservative guidance [26] - The semiconductor ecosystem involves various players, including Nvidia, AMD, and Taiwan Semiconductor, each playing distinct roles in chip design and fabrication [29][34] Group 4: Quantum Computing Stocks - Quantum computing stocks, including Rigetti and D-Wave Computing, saw significant pre-market gains of 20-30% following reports of US government interest in equity stakes in quantum firms [36][37] - Google's recent advancements in quantum technology, claiming their chips are 13,000 times faster than current supercomputers, have reignited discussions on the scalability of quantum technology [37] Group 5: Aerospace Developments - Airbus and other European satellite companies are merging their satellite businesses to create a competitive entity against SpaceX, with an expected annual turnover of about $7.5 billion [38][39] Group 6: Earnings Reports and Market Reactions - American Airlines reported a smaller-than-expected loss, driven by a rebound in travel, and anticipates profitability in Q4 [50] - T-Mobile added 1 million new subscribers but saw a decline in shares, indicating mixed market reactions despite positive service revenue growth [52] - Hasbro's Q3 earnings beat expectations, leading to initial share gains, although they later slipped back [54]

Core Viewpoint - The overall sentiment is that the worst is behind Tesla, with expectations of stabilization and growth driven by developments in China and advancements in autonomous technology [1][4][13] Group 1: Market Performance and Expectations - Deliveries are currently down 6% year-over-year, but there is a belief that stabilization is occurring, particularly in the Chinese market [3][8] - The company is projected to reach a quarterly delivery rate of 550,000 units, which is crucial for future growth [5] - The autonomous vehicle market is expected to be worth a trillion dollars, contributing significantly to Tesla's market cap, which is anticipated to reach $2 trillion by the end of next year [3][13] Group 2: Autonomous Technology and AI Integration - The focus is shifting towards the AI chapter of growth, with Tesla and Nvidia being highlighted as key players in this space [5][13] - The company aims to dominate the autonomous market, potentially capturing 80% of it globally [13] - The performance of robo-taxis and the rollout of Optimus technology are critical factors for short-term execution and stock performance [9][10] Group 3: Investment Strategy and Stock Valuation - Investors are advised to add to their positions during market dips, with specific price points mentioned for potential investment [7][10] - Current stock prices are seen as constrained, with a target of around $460 for potential breakout [11] - The long-term outlook remains bullish, with projections of the stock reaching $600 to $700 based on AI developments and market positioning [13]

Future Prospects - Tesla is considered an easy long-term investment [1] - The company is involved in robotics, AI, and Robo Taxis [1] - Tesla is positioned as "the future of everything company" [1] Market Prediction - Polymarket projects Tesla to significantly exceed earnings expectations [1] - Polymarket estimates an 80% chance of Tesla surpassing earnings expectations [1]