Prof G Markets: Tesla’s Terrible Earnings, the FTC’s Noncompete Ban, and 24/7 Trading at the NYSE

Financial Struggles

Tesla's recent financial performance has been underwhelming, with the company reporting a significant drop in both revenue and profits for the first quarter. Despite these setbacks, Elon Musk announced plans to launch more affordable vehicles by 2025, which surprisingly led to a 14% rise in Tesla's stock 1. Scott Galloway suggests that the market's reaction might be due to perceptions of the stock being oversold or the company's pivot towards AI and energy revenues 2.

Right now, the company is playing a serious game of jazz hands, and they're like, let's talk about our energy revenues and the margins there. Let's talk about AI. Let's talk about autonomous robotaxis. Let's do anything but talk about our core business, which is an automobile business.

--- Scott Galloway

   

Market Reaction

The stock market's response to Tesla's poor earnings was unexpected, with a notable surge in stock value. Scott Galloway attributes this to the market's interest in Tesla's AI ambitions and the perception that the stock was previously oversold 2. Elon Musk's emphasis on Tesla being more than just an auto company, positioning it as an AI and robotics leader, has influenced investor sentiment 3.

If you value Tesla just as an auto company, you fundamentally have the wrong framework.

--- Elon Musk

   

AI Ambitions

Tesla's strategic shift towards AI and robotics is a key focus for Elon Musk, who argues that the company should not be viewed solely as an automobile manufacturer. However, Scott Galloway is skeptical of this narrative, pointing out Musk's mixed track record in AI and the lack of concrete details on projects like the robotaxi fleet 3. Despite Musk's ambitious claims, Galloway questions the credibility and feasibility of these ventures.

I think he's lost a ton of credibility. He said in 2017, I think within two years, there'd be a million autonomous Teslas on the road.

--- Scott Galloway