We Need to Talk about Tesla Stock

Bloomberg is out this morning to shill

Tesla, which is somewhat surprising, but

a lot of really good notes out this

morning from Bloomberg. First, Tesla's

self-driving technology could be safer

than Whimos given its vast mileage data

collected if their crash data

mythologies are comparable. Tesla

reports about 0.15 crashes per 1 million

miles of vehicle vehicle miles driven

versus Whimo's average 1.16

crashes uh per 1 million miles driven.

Now, I'm just going to throw in my

comment here that Whimo has literally no

driver. Tesla, you've got uh you know,

this is the crash rate on autopilot. So

you have autopilot miles that you're

comparing this to plus a human driver to

take over. So a little bit of adjusting

probably required there. But that's also

a pretty significant difference, right?

0.15 crashes per 1 million miles driven

and Whimo's average being 1.1

uh crash per million miles driven. That

said, you've had substantially more

miles driven with Teslas. You've had 3

billion miles driven with Teslas. and 22

million Whimo miles. So 22 million

Whimo miles uh divided by 1.16

implies 19 incidents, right?

But if I go to Tesla's 3 billion, that's

that's pretty low. 4.5 when you get

that. That's pretty dang low. Uh so very

very low on robo taxi induced accidents

there. So you've got a pretty bullish

Bloomberg here. Since Tesla since 2023,

Tesla's FSD software has tracked 2 and a

half billion miles, almost 62 times

Whimo's miles. Although in fairness also

Whimo is only operating in very geoenced

areas. Whimo's higher incident rate

likely stems from its small size with

only a thousand vehicles versus Tesla's,

you know, one 1.6 6 mill

probably way more by now. Uh once

regulatory hurdles are cleared, Tesla is

poised to expand faster than any

existing robo taxi thanks to a sheer

volume and linear tech stack.

Interesting. So very bullish piece here

from uh Bloomberg today. They also say

that Tesla's vehicles cost 17th that of

Whimo's despite its early lead in robo

taxis for Whimo. Whimo faces a scaling

challenge versus Tesla with about 1500

vehicles in service after 7 years of

operations. Its growth remains

constrained due to a lack of car

producing capabilities. The

discontinuation of its current and only

model, the Jaguar Ipace, forced Whimo to

seek new partners. Yet Tesla is already

equipped with mass production capability

with full control over manufacturing and

a self-operated platform. These are

advantages that they're giving Tesla

here. This idea that Tesla's

manufacturing them. Tesla has their own

platform. Tesla self-insures. Whimos

don't manufacture. Whimo doesn't have

insurance. It's all third party based.

Uh and then the mileage that you've got

driven here is is you know substantially

larger obviously for Tesla. Any robo

taxi company that lacks manufacturing

might be replaced if a leader exhibits

true scale. That's interesting. So

they're basically saying if you don't

have manufacturing, you don't have a

moat to protect yourself as a robo taxi

vehicle. Very interesting. They also

talk about how Tesla's vehicle costs

about 17th that of the price of a Whimo,

which is somewhat an ode I feel like to

what Elon Musk said when he said, "Ah,

Whimos, they cost Whimo."

There's also this uh talk about

robotics. Humanoid robotics hold the key

to a manufacturing future. They uh in

here say the robots are coming,

especially in manufacturing and that

human robotics are the only solution to

being able to manufacture more because

companies simply can't hire enough

people at an affordable level. So in

other words, you want to revive US

domestic manufacturing, maybe you need

the robots to do the work. The broader

picture doesn't scream worker shortage

and get me robots now except in

manufacturing. The BLS reported 381,000

unfilled manufacturing jobs in April. Uh

that's a lot. Uh with some reports

quoting 450,000 vacancies in

manufacturing. So in a weird way,

even though we talk about job vacancies

declining in manufacturing, you have

this wide opening of available jobs for

people. So you want a job, you know, go

into manufacturing, but then again, who

wants to work in manufacturing?

Looking at those unfilled factory

positions, it's hard to turn that one

around. solution is robots

uh AI and robots combined to get

manufacturing plans to fill those

vacancies required with robots. Uh this

uh sets the stage for a Tesla Optimus

push, especially with Tesla being one of

the front runners in humanoid robotics

in addition to like Figure or Anthropic

or others. And then of course the

Chinese have plenty a bunch of robots

too with Amazon talking about

potentially uh using humanoid robotics

to partner with human drivers which is

kind of wild that we'd have humanoid

robotics delivery packages before we

have robo taxis at least broadly

self-driving cars. You've got uh you

know beyond FSD, right? Uh this idea

that you could buy a Chinese humanoid

robotic and have it basically deliver

boxes in a neighborhood at the same time

as the driver is delivering boxes. So,

you try to sort of double up your

delivery efforts here. Somewhat

interesting.

Uh, let's see here. We've got last week

Tesla filed a lawsuit against another

engineer about former um IP that was

stolen from the hand sensors. We covered

that story. Honestly, I mean, just

reading the Tesla complaint, it doesn't

look good for that person who stole the

stuff. I mean, Tesla seems to have all

the receipts to show when this

individual accessed sensitive Tesla

information.

uh also been tracking Agility Robotics

Digit. Bloomberg reported more than a

year ago that Amazon was piloting a 5'9

in humanoid in a Seattle warehouse,

picking bins off shelves and fing them

to conveyors.

That's separate from that Chinese robot.

the um CEO of that company said that

Digit is already working alongside

people at Amazon and logistics for dull

and repetitive tasks, tasks that most

humans seek to avoid and that it's not

science fiction and it's already

happening. It's pretty remarkable. And

again, that's one of the the advantages

that Tesla has. It's not so much the

robotic technology,

it's who can actually manufacture all

the robots. And I think that's one of

the reasons why we've seen Tesla perform

so well uh really over the last couple

years here in in their sort of recovery

coming out of the uh 2022 crash is

mostly because there's so much

enthusiasm around robotics and the

potential that uh Elon's legacy and

government was able to pave the way for

uh humanoid robots or uh self-driving uh

robo taxis with more broad adoption. So

it makes sense because Tesla not only

having the AI or the concepts, you know,

the actual servos to operate robotics or

whatever, they have manufacturing, which

unfortunately is terrible in high

interest rate environments selling to

consumers. Fortunately, a lot of

robotics, if we're going to fill

manufacturing jobs, don't need to be

sold to people, right? Like selling to

people

generally requires lower interest rates.

Look at the solar industry. Look at

Tesla stock during the highest of

interest rate environments. It's

challenging. But if you can potentially

open up a vertical of manufacturing for

the government like a military defense

contractor or you open the door to

manufacturing for,

you know, really rich corporations like

what we've seen with Google uh and Meta

and Microsoft buying from TSM, you know,

Nvidia chips and otherwise. Well, now

all of a sudden you're manufacturing for

a very rich cohort. And I would argue

that, you know, manufacturers in

America, especially if you combine

Donald Trump's full depreciation

benefits, you know, robots in a few

years could be very interesting because

you could buy a robot for 25K or

whatever, fully depreciate it year one

thanks to Donald Trump's, you know, big

beautiful bill and and capital

infrastructure um uh incentives. And and

now you look and go, okay, well, who's

actually making the robots? Well, you

can get a Chinese robot or you could get

a Tesla made robot. And then that's kind

of where, you know, price is really

going to be the war. Tesla's basically

the only US-based uh mass manufacturer

for for robots that we could tell at

this point. There are plenty of

prototypes, but beyond that, it's going

to be China. And so then the question

becomes, are we going to import Chinese

robots or are we going to prevent the

importation of Chinese robots like we

prevent the importation of Chinese cars?

I mean, if we are to say that, you know,

oh, companies will just buy Chinese

robots instead of US robots, well, then

why don't we all have Chinese cars?

Well, because we've been protecting our

US industry through protectionist

policies, and it's possible the same

thing could happen with Tesla. So, that

said, you know, I still think the

valuation is a little bit stretchy for

Tesla. We've thought this for a while.

you know, the manufacturing business is

maybe worth at the moment based on sales

today, you know, a buck 40 a share, 140

bucks or so. Uh, which gives you about

$190 of premium for that future

potential in manufacturing for robotics

along with obviously uh the the robo

taxi division. That said,

kind of a good point here from

Bloomberg. you know, you've got

optimistic data on safety. You've got

progress on robo taxi. Obviously, I

don't think it'll go as quickly as as uh

Elon pitches in terms of like broader

based robo taxi adoption, but but when

it comes, the one who could print robo

taxis would almost certainly be Tesla

over Whimo, unless they just pick up

leftover inventory from uh you know,

like Toyotaas or whatever and partner

with Toyota. Although, I actually feel

like I did hear about a Toyota

partnership between the two. That would

be interesting. Let me just double check

this. Toyota Whimo. Did they ever

Yeah. See, and that that makes a lot of

sense. Look at that. This just happened.

Oh, and I've been on this page before.

I've highlighted this. Whimo and Toyota

outline strategic partnership. So, to

me, this is a way of saying like Whimo

is realizing that Tesla is coming and

the advantage Tesla has is

manufacturing. Well, we already import a

lot of Toyotas. So, could Toyota be the

manufacturer for those robo taxis? And

then you wonder could someone like a TSM

basically you know Taiwan Semiconductors

could they get into manufacturing robots

to where it's not necessarily Chinese

companies but so like Chinese adjacent

right you know I I suppose if we're

talking about Taiwanese manufacturing

some OG Chinese would say that's also

Chinese manufacturing but then we get

into a whole geopolitical issue and we

don't need to go down that road. So, but

honestly, I mean, broadly bullish there

on Tesla. Uh, I will say again, I think

that I mean, you know this already. This

is old news. I think the market is a

little frothy right now. Uh, but um

let's take a look at Tesla's current

valuation where we sit. So, I want to

just see because these the estimates for

Tesla's growth have really been rising

uh over the past few I would say about

eight weeks or so. It seems like every

time I load up a financial analysis on

Tesla, the Wall Street forecast for

future earnings growth is just going up

and up and up. So, I think the last

analysis I did is we were at like 40

2% EPS growth. Current estimates are 508

plus 30.38.

Uh, there we go. I did that right. Okay.

30

Let me do this again. I'll just put it

down. 50.08 08 + 30.38 EPS growth plus

30.18 +

43.26 = / 4. Oh, interesting. They

actually got written down a little bit.

So now the average 4-year forward growth

is sitting at about 38.4.

And so 38.4 327 on the stock divided by

192 it's trading for 170 times divided

by 38.4. Dude, Tesla's trading for a 4.4

at 4 peg right now. I mean, that's

that's half as expensive as Palunteer,

and that's not anything to brag about

right now. So, definitely no panic in

the stock market valuation, that's for

sure. But uh very interesting to see the

sooths like the doomers at Bloomberg

actually writing such optimistic things

about Tesla over

uh you know Whimo and more of like the

the Google uh you know child uh that

Bloomberg I feel like usually likes to

prop up. Speaking of Google, by the way,

I did save this piece which I may as

well just quickly mention. Oh, there

goes my phone. Uh, Google search is

fading. The whole internet could go with

it. I thought this was very interesting.

Searches rapid decline. Growth rates for

US search traffic has been slowing

across various sectors. Oh, why thank

you. Uh, uh, for the past year, but the

decline accelerated in May across

sectors of the internet economy. This

has been one of my biggest concerns for

Google is that you know Google like AI

is basically replacing the need for for

Google search. I feel like this looks a

little bright but anyway uh what we have

are various different charts travel and

tourism falling off a cliff uh in May

down 20.2%. News and media down 17.1

e-commerce down 19.2 finance down 7.4

food and drink down 7.4 for lifestyle

and fashion down 4.6.

So, you know, it goes to show that, you

know, even though Google runs Whimo, it

doesn't necessarily mean they're going

to have the greatest staying power,

especially since, you know, what 56% of

their business is relying on search uh

revenues right now. So, like, in other

words, a decline or pain in search

revenues could actually potentially

limit their their funding capability for

even other projects. Maybe not. They've

got plenty of stock that they can

dilute, but uh roughly one in five

visits to the world's top internet sites

begin in search engines.

Uh okay.

Oh, that's interesting.

Uh for Trip Advisor, it's 58%.

And for Yelp, it's 51%. For Wikipedia,

it's 63%. Now, that's really interesting

because if people are searching in

Google less, Yelp could get smoked, Trip

Advisor could get smoked, and Wikipedia

could get smoked. I totally could see

that because if AI is just going to give

you the recommendations, you don't

necessarily need Yelp or Trip Adviser or

Wikipedia. That's interesting. That's

very interesting. AI search engines have

replaced about 10% of traditional search

so far. This is a Baron piece, by the

way. Google is pushing back by adding AI

powered summaries at the top. Uh, and

maybe that'll help or not because so far

the numbers keep going down. Uh, last

month, search referrals to the top US

travel and tourism sites tumbled 20%.

These are these charts are referrals to

to those industry websites. Uh, the

trend is clear. Search is drying up and

Google is no longer the clear-cut way to

drive audiences to websites. Business

Insider cut 21% of its staff citing

traffic drops outside of its control.

Reddit, social media site and source of

answers to many random questions gets

57% of its search, you know, referrals

from search, making deals with AI

critical.

Uh, that's interesting. Reddit could get

smoked by this. I I do see Reddit

results a lot for like random questions

in the Q in uh in Google. So I could see

that monthly US search traffic to

Schwab.com fell for the first time in at

least two years according to similar web

down 14%. A year ago, search referral

referrals to Schwab were up 179%.

Search to Netflix was down 23%. Although

how many people are actually searching

for Netflix on Google? Reddit has become

the battleground for the search's

future. stock is down 28% so far this

year as people worry about slowing user

growth to Reddit. I don't really like

Reddit. I like going on there and

trolling people in the real estate

section, but uh this is very interesting

and it kind of shows you that, you know,

Google as sort of a legacy operator

could have some headwinds that actually

might even in my opinion distract from

their Whimo business as they try not to

um essentially collapse or or see the

most the largest and most important

portion of their business collapse. So,

uh, cool piece by Barons, and I feel

like it kind of connects nicely to this,

uh, uh, Tesla Doomberg shilling. Anyway,

uh, if you found any of this helpful,

uh, make sure to get life insurance in

as little as 5 minutes because that

makes sense. Uh, it's a paid promotion

of the channel. It, uh, takes you less

than 5 minutes to sign up. You get life

insurance. You get a 1 million, 2

million, 3 million, 4 million, whatever

policy within 5 minutes. You can Apple

pay an Android pay for it. And, uh,

yeah, it's awesome. Go check it out. All

right. Oh, interesting. I don't have the

AI mode here, but I have it on this

other computer on a on a Windows

computer. I actually have there's a

button up here on Google search where I

could turn on AI mode. Uh, and it's

basically just an opportunity to chat

with, you know, the Google AI or

whatever. But, and then of course you

get this AI overview. So, you could, you

know, have this conversation in the AI

overview. I could go into AI o AI mode

or whatever. I think one of the problems

though with these AI overviews is not

that it's not good. I like them. I think

the AI overviews are good for Google.

But it's that if people aren't going to

this box anymore because this box

instead is Perplexity or GPT or Grock,

uh well well then you know your moat has

basically been reduced to that of a

commodity and and that's not good for

Google. Why not advertise these things

that you told us here? I feel like

nobody else knows about this. We'll

we'll try a little advertising and see

how it goes. Congratulations, man. You

have done so much. People love you.

People look up to you. Kevin Praath

there, financial analyst and YouTuber.

Meet Kevin. Always great to get your

take.