What Tesla & Google JUST Said | The Start of a Crash.

well Google and Tesla just reported

earnings and they might be the Catalyst

for pushing the market over the edge and

not in the way that we want it to go

right before election season let's get

started with what the heck just happened

first of all sort of an intro here the

expectation and concern was that we

might hear something about slower

artificial intelligence revenues slower

growth combined with higher valuations

and the election and with well that's

kind of what we got Google confirmed a

Slowdown or more patience being required

before seeing uh AI profitability keep

in mind quality of their products is

increasing and the output of their AI

Innovation is increasing we'll talk more

about that in just a moment and Tesla

complained that Nvidia chip demand is so

high that they're basically forced to

make their own Dojo chips which once

again reiterates that Dojo is more of a

side project even though Elon does think

Dojo will be competitive at one point

with Nvidia they still need their Nvidia

chips and despite all of this nvidia's

stock is down about 1 and a half% in the

post market now that could change and

fluctuate rapidly and it seems like

demand should still be pretty dang well

there for NVIDIA especially with what we

heard from Tesla but the question now is

what are the details of what happened

here and could this lead to an AI

selloff I'll start broadly yes this

earning season could lead to a market

smaller kind of Correction before the

election but I've had that thesis for

about a week and a half to two weeks now

and what I've been doing is I've been

trimming positions in my course member

live streams I've been explaining my

positioning I'm about a five out of 10

on the bull bear scale and I've

increased the cash positioning in the

fund that I manage to up to about 30%

somewhere between 24 and 30% we also

trimmed our Tesla exposure by more than

50% going into these earnings and we

talked to course members this morning

about the concerns going into these

earnings some of those concerns that we

talked about going into this earnings

that we kind of already had a little bit

of a short squeeze over the last period

where Tesla ran up to

265 we also talked about

how it's right here this is like just

slap together some notes uh this was our

course live stream this morning uh and

uh we talked about Robo taxi the delay

killing momentum Robo taxi event likely

to be by the rumor sell the news going

to be years before Robo taxi is

commercially viable euphoric pricing

implies that these are all right around

the corner but they're not uh and today

for the stock you need what you really

need is even better margin in q1 a lot

of that unfortunately we saw in the

earnings came from regulatory credits a

return to free cash flow though look at

this I even wrote the Market's pricing

in 1.9 billion in free cash flow and I

wrote yikes that's a huge ask and sure

enough we missed on that free cash flow

we have to beat Market enthusiasm to

justify maintenance of 250 which I

didn't think it was going to happen uh

and uh Elon will be drilled about Robo

taxi sure enough this is what happened

and this isn't the place for

announcements sure enough that's exactly

what he said although we did get a few

insights none of them enough to actually

create any kind of sustained Euphoria

and therefore I wrote Ken it rally of

course but I lean towards not and that's

why I went in trimming uh going into

this earnings uh release so what did we

hear uh well let's get into some of the

details quick shout out we got prices

going up on the courses on building your

wealth soon so check those out at

meetkevin.com bundle coupons email us at

staff meetkevin.com we've got a

mastermind at meetkevin.com Mastermind

that's really popular we've got small

groups and private one-on-one

masterminds now uh so check those out at

meetkevin.com

Mastermind

and architect and Structural Engineers

if you are an architect or a structural

engineer and you want to relocate to

California we'll pay your relocation pay

you a great salary even if you're both

gosh but we'd hire separately as well

like a licensed architect licensed

engineer will help you get licensed out

here in California we need you send us a

uh a jobs request uh send us a resume

and sort of a 60-second uh pitch on you

to jobs meetkevin.com stru R engineer

and architect could be two separate

people all right folks let's get into it

Tesla regulatory credits increased 3x

year-over-year 2x sequentially from q1

all the way up to $890 million this is

remarkable and it's in part because what

you're seeing is a reduction in well

frankly other oems competing for these

regulatory credits as they're leaning

away from well quite frankly uh you're

leaning away from producing electric

vehicles

interest rate buy Downs helped Drive the

production and delivery numbers that we

saw in Q2 but I worry that this is a

little bit of what I call a good kitchen

sync quarter in other words it happened

to be the best quarter for Elon to have

a stock comp plan vote and so what did

we get in that quarter capex reduction

now it's ramping again in Q3 production

reduction now it's ramping again in Q3

interest rate buy downs and those are

also here in Q3 which is lowering the

average selling price of these vehicles

uh your average selling price right now

is down to about

$447 74 and it does look like the

average selling price uh is a reflective

of the interest rate buy Downs so those

interest rate buy Downs are coming off

that Top Line apparently uh anyway

you've got uh you've got a lot of

expenses that are still coming later

this year you do have a lot of cash

you've got over 156 billion doar of free

cash now about $2.5 billion of that did

come from debt that they just raised but

but you definitely have expenses that

are going to grow in the rest of the

year they still and they reiterated they

still expect to spend $10 billion in

capex and uh given that uh they slow

down their spending in Q2 it means we

got a lot of spending ahead of us

supercharger growth slowed to just 3.5%

sequentially which annualized to about

14% which is down about 10 percentage

points year-over-year this isn't great

this might lead to more congestion as

Tesla invites other charging customers

uh to use Tesla's supercharging Network

so you would actually expect the

supercharger Network to grow faster not

slower not seeing that at the moment the

Tesla did start delaying some of the

roll out to some of these other

thirdparty oems and you did end up

seeing uh some of the Tesla

supercharging team

rehired uh Tesla still focused on cost

reductions they were actually pinged on

this they're like why are you focusing

on cost reductions if you're trying to

grow more uh the same question came up

about Giga Mexico which I actually

thought the answer was pretty

interesting about when about this we

knew that gig of Mexico was on pause but

why was interesting it was previously on

pause because macro is concerning now

it's on pause because well if we

manufacture more outside the United

States like in Mexico we could get

screwed by

tariffs via a a you know president Trump

Administration which is also interesting

because we have essentially Elon himself

has confirmed that yes he is donating

about $45 million to a super pack that

is his which is supporting Donald Trump

for president anyway uh margin beat at

18% but again that margin

growth mostly moved because of that

expansion in regulatory credits so not

great increased deliveries from Shanghai

that's good audibles now available on

the car fine more affordable options

remain on track for 2025 and they are

expected to be built on the same

manufacturing lines as current Vehicles

only the robo tax is supposed to use the

unboxed method of uh Manufacturing this

is where you're not going down an

assembly line but rather multiple parts

of the vehicle are being assembled by

let's say Optimus robots at the same

time energ may continue to grow at a

faster Pace than cars that's exactly

what we're seeing right here you did get

a profit Miss EPS Miss again this is the

fourth straight time in a row Tesla uh

is also likely to go negative

year-over-year on vehicle deliveries

Elon on the conference call says

competing electric vehicles haven't done

well they do expect again that more

affordable model to begin production in

the first half of next year and it

sounds like one of the reasons They

delayed the robotaxi event to 1010

October 10th which is a momentum buzz

kill which isn't great for for the stock

uh is because they want to introduce

other models at that moment as well

which could be the lower cost model and

we also got a hint on the uh the

Roadster here that the Roadster

announcement might be coming for

production next year so you could see

something at the robo taxi event as well

for uh the Roadster higher end vehicle

now I personally have what I call a uh

sort of a I call it my this is inspired

by rust it's a video game Sorry I call

it my 2 by two foundation for investing

in stocks and the 2 by two Foundation is

built on four premises valuation pricing

power sentiment and momentum and

bankruptcy risk Tesla does not have

bankruptcy risk however Tesla's

valuation is very high before this

earnings report we were sitting at a 3.1

Peg for the next four years of growth at

32% EPS growth priced in that's

expensive that's because the PE Ratio

right now sits for this forward year at

100 now obviously you're going to have

about a 7% discount to that now given

that the stock is falling 7% the

valuation is very high for a

Manufacturing Company though which

should be closer to about 1.67

Peg pricing power in the industry though

pricing power in general for Autos is

substantially weaker than pricing power

at other companies sentiment and

momentum just got Buzz killed and again

I don't think there's bankruptcy risk

here so you're really missing two of

these foundations right the valuation is

high they do have in-class pricing power

they don't have bankruptcy risk but

sentiment and momentum really started

dying after that Robo taxi event got

killed and unfortunately this earnings

call is probably just going to

accelerate sentiment in the negative

Direction which isn't great uh so

near-term pricing not super excited

about it again there's a reason why it r

reduced my exposure to it by over 50%

leading into this earnings report and

we've been talking about this and

sending alerts about this uh in the uh

uh in the course member live streams and

talking about this as well but anyway

continuing on uh Elon believes we have

the scale uh and production capabilities

to be the most efficient EV producer in

the world and that that will be really

useful for Optimus production I just

want to be clear as much as I love the

whole idea of robotaxi and as Elon puts

at the Airbnb on Wheels you know

introduce your car to the fleet we've

heard all this crap before we're not

there yet and and I understand the

market can get really enthusiastic about

pre- pricing in these things but until

we actually see Revenue it's almost

impossible to price it in and to stand

on that valuation because we haven't

gotten to full self-driving unsupervised

yet we're still trying to get to you

know more than a few miles between

interventions and it's probably going to

take years before we get there this

doesn't mean I'm bearish long-term Tesla

but short-term

it's not good you don't want to price in

Robo taxi and you don't want to price in

Optimus in the short term yes Optimus

was doing something productive they

alluded to initially uh in their uh

their press deck release and then in

their slide deck release it's funny

because I I joked and you could fact

check me on this I joked about it live

I'm like what are they going to have the

Optimus putting batteries in a box

because they're like oh yeah we have the

Optimus working with batteries and uh

well I'll just I'll just let you look on

screen and yeah anyway 12.5 release for

FSD should be a big shift now we're

going to merge the highway and City

stack that's great uh this idea about

other oems using uh FSD have has once

again resurfaced in the earnings call

I'm tired of hearing this they literally

say yeah yeah other oems have expressed

interest they've been saying it for over

a freaking year now I'm overhearing it

it ain't happening especially when you

have the CEO at Ford going we're going

to make money with software they want

their own crap and guess who's going to

give them their own crap

Nvidia you could literally just take the

Nvidia Drive platform and plug it into

your garbage at Ford and build your own

software rather than paying Tesla for it

I'm not saying it's going to be close

but in five years they're all going to

have their own FSD and they're all going

to use their own crap this OEM stuff uh

licensing Tesla FSD I put a 1% chance on

it happening and if it happens by all

means I will eat my words I was wrong

about Google mind you and we're going to

talk about Google in just a moment they

really impressed so I absolutely can be

wrong and I I guarantee you I will be

wrong in the future again just saying

I'm I'm highly confident this whole OEM

licensing thing sorry anyway uh

Optimus is already starting to perform T

whatever this is nonsense uh eventually

yes he expects that Optimus will will be

able to perform tasks inside of the

facility uh at Tesla for Tesla uh and

that they'll have maybe a thousand robot

or um Optimus robots doing things

practically uh inside the facility so

that'll be Optimus version one and they

expect to get to Optimus uh version 2 in

2026 which maybe third parties can then

license license rent or buy uh long-term

Optimus achieves arcs valuation several

times over says Elon Musk but again that

implies that you don't have substantial

robot competition which you will also

have a substantial amount of robot

competition anyway uh when do you expect

the first Robo taxi uh ride the answer

was depends when we can get to

unsupervised FSD so it doesn't actually

sound like robotaxi is anything other

than just here's a car that uses FSD so

if you really want to know how well FSD

is going you just need to uh own a Tesla

and then watch the FSD upgrades now I

want to be clear FSD is really good when

I drive I use it all of the time uh so

I'm a big fan of it and it's gotten

better you know some of the first

versions of of 12 like 121 2 3 weren't

that great 124 is fantastic I absolutely

love it so don't get me wrong it's great

is it going to be driving itself anytime

soon

no uh next uh we've got uh this

potential Osborne effect Elon was

talking about which is where people

cancel their current orders because a

new uh product is announced and that's

why he doesn't want to announce any kind

of uh new product yet sure okay Elon uh

let's see here FSD and Europe is well

behind working on approvals to get

supervised FSD in Europe and China

hopefully by the end of the year uh in

the future you'll be able to open up

your app and we'll send a car to come

pick you up I understand this Arc thesis

that you know you're going to get 25

cents per Robo taxi mile or whatever I

also think that is broadly bull sh9t the

reason for that is I think every if

literally everyone who owned a Tesla in

every city submitted their car to the

robo taxi Network when they weren't

using it the value of a taxi will

plummet the cost will compress so

freaking rapidly you'll barely make a

dime uh over your cost vehicle

depreciation charging cost that it it is

going to compress instantaneously now

that'll destroy uberon lift but I think

you still got a few years for that all

right uh Google so okay Google I

actually have to say I'm really

impressed with oh yeah anyway so

short-term bearish

Tesla longer term I like it but I'd like

it cheaper uh so yeah you really also

need to get back over 230 otherwise on a

technical

basis you're going to probably go back

under 200 for Tesla anyway it's

something I've been warning about for a

few weeks in the course member live

streams as well people keep asking me

like oh what's going on with Tesla I go

it's going to go down like Q3 Q4 it's by

then it's going to go down it might

happen a little sooner than we

thought this going me be bearish I'm

just trying to be realistic and you go

back and get the receipts uh anyway when

you join those courses mind you you get

all my course member live streams going

all the way back to like 2017 so you

just pick my

brain all throughout the evolution it's

kind of

cool Google wants to bring AI to

everyone you know they're they're trying

to do a very similar to Apple thing it's

like oh what did I eat in that

restaurant at Paris last year I I don't

know why that's super functional but

whatever I guess it's cool uh and um it

sounds very apple-esque what they're

finding is that they're able to increase

efficiency uh for advertisements uh for

example their pmax product which is

performance Max it's what you could set

your uh ad account to uh it converts 25%

better than the non- pmax version that's

AI pmax uses Google's AI so what you're

finding is AI is just making products

better

quality of products is going up costs

are going down within companies but

they're not really driving incremental

revenues they're not necessarily

increasing the revenue line they're just

decreasing costs and making all products

better like more functional and useful

for end users which is a good thing like

net net AI is great but is it really

going to be this Revenue windfall

everybody's

expecting probably not in the in the

very near term uh and at some point we

don't know when that is that could be

you know quarters from now it could be

years from now at some point the cost of

AI chips will collapse because the AI

infrastructure will be built

out uh YouTube second most watched after

Disney for streaming YouTube's

benefiting from connected tv YouTube

benefits uh from more advertisers as

well search remained the largest

contributor to revenue growth retail

search specifically uh and they are

really kicking butt because they're

integrating Gemini right into Google I

actually think this was well played

I was wrong on this I thought people

would just use AI search apps as opposed

to Google and it would replace it but

frankly AI 40 or uh Google AI Google 4D

chest this and just basically built the

AI search results right into search and

now they put ads above and below it and

they're expecting to have product ads

within the AI

results brilliant absolutely brilliant

hands down loved what I heard from

Google loved what I'm seeing from Google

I'm a Google Cloud user all my companies

use Google we we're big fans uh 32%

operating margins YouTube subscription

revenues were growing healthy watch time

much slower pace of hiring with a slight

pace of growth going into Q3 this is

great that's anti-recessionary you don't

want to hear more layoffs they're

already negative like 2,000 it's about

1% smaller Workforce than what you had

year-over-year uh and and you are

growing so that's good but it shows you

you're kind of on a little bit a little

bit of a teeter there right planning to

invest $5 billion into way self-driving

car unit we uh are they're committed to

privacy but they're not getting rid of

cookies yet which I'm not really sure

how that is going to affect trade desk

because getting rid of cookies was kind

of what trade desk was really excited

about with uid 2 and this is their sort

of solution to cookies but then again

maybe you can get better data if you do

have access to cookies so it could just

be a net net neutral there for trade

desk so but anyway uh yeah it seemed

like markets reacted pretty negatively

to this idea that you weren't going to

get more revenue from

AI n phase uh despite a

19.5% Miss on micro inverter shipments

the stock is remarkably up 4 and a half%

and afters I think people were expecting

the worse they're expecting a big

collapse so hence the stock is up and

they indicated that customer demand is

up 5% in Q2 that 85% of Q Q3 shipments

are already booked inventory is

normalizing the sales Channel and uh

sales outside of Cal California is flat

sales are up 7% in Q2 outside of

California so you know for me you know

if I'm looking for Bu The Dip uh maybe

it's end phase or honestly it's just

waiting because I think there's a chance

going into this election you're going to

want a little bit of a cash buffer and

that's why I've been increasing like I

put my money where my mouth is

I I I can't advertise uh my Fund in here

I'm not trying to advertise my Fund in

here I I use it most I it's my own sort

of tool I I love it I think it's

fantastic but I just put my money where

my mouth is there so that's uh that's a

sort of a long-term uh vehicle and and

uh when I see opportunities for

short-term balancing uh I do that so I

like building cash uh and then when the

market dips bang I personally think

broadly not personalized advice for

folks now might be an opportunity for

some cash building so with that said

let's go ahead and pull up the sticks

here Tesla now down 7.91 per. I want you

to see we lost the 250 support this was

a really critical line we got rejected

there mostly throughout the day uh was

able to also uh make some profitable

well actually we had one profitable I

only made one trade today uh but anyway

profitable trade today if you want all

my uh short-term or long-term Buy sell

alerts can't guarantee you'll make money

but you'll get all my perspective make

sure you join the stocks and psychology

money group any of the courses on

building your wealth will give you

access to the course member live streams

for Life uh including all the the TA we

talk about short-term long-term alerts

the Discord Community you name it

Tesla's almost down 8% here the next

support level right now is sitting about

225 and if if we lose these 220s

unfortunately we're going to be back to

the 195s so watch these levels here at

Tesla uh Nvidia down after that Google

earnings call and NASDAQ futures also

down half of a percent Bitcoin is

sitting roughly around the levels that

we saw when Biden

resigned I think there could also be

some near-term risk offness in the cues

that spills over to bitcoin uh Google

negative about 1.76 1.8 so not too much

of a big move here uh on Google however

it is getting rejected by that 194 line

you can pretty much see that perfect

rejection here next stop is 152 if we do

start a downtrend I don't think Tes um

Google's earnings were bad enough to

really support that kind of downtrend

you'd really need a larger market

correction but we might end up getting

that so there you go thank you so very

much for watching really appreciate you

all uh remember we've got that amazing

Mastermind uh it could be one-on-one in

person or small group with uh c-level

Executives from companies who are in it

business owners Real Estate Investors

Hotel years you name it you want to be

in it uh check it out at meet kev.com

Mastermind that is a higher ticket

option uh the next uh you know the best

option I think everybody should be a

part of for those course member live

streams uh and what you get in those

courses on building your wealth at me

kevin.com these things that you told us

here I feel like nobody else knows about

this we'll we'll try a little

advertising in CR go congratulations man

you have done so much people love you

people look up to you Kevin PA there

financial analyst and YouTuber meet

Kevin always great to get your

take even though I'm a licensed

financial adviser licensed real estate

broker and becoming a stock broker this

video is not personalized advice for you

it is not tax legal or otherwise

personalized advice tailored to you this

video provides generalized perspective

information and commentary any

thirdparty content I show shall not be

deemed endorsed by me this video is not

and shall never be deemed reasonably

sufficient information for the purposes

of evaluating a security or investment

decision any links or promoted products

are either paid affiliations or products

or Services we may benefit from I also

personally operate and actively managed

ETF I may personally hold or otherwise

hold long or short positions in various

Securities potentially including those

mentioned in this video however I have

no relationship to any issuer other than

house Haack nor am I presently acting as

a market maker make sure if you're

considering investing in house Haack to

always read the PPM at house.com