Tesla bull Dan Ives talks why he's still bullish, AT&T COO talks wireless competition

Key Concepts

Market Catalysts: Factors that drive significant market movements.
Magnificent 7: A group of seven large-cap technology stocks.
Earnings Season: A period when publicly traded companies report their financial results.
Crude Oil Futures: Contracts for the future delivery of crude oil.
Sanctions: Penalties imposed by governments on countries or entities.
Energy Stocks: Companies involved in the exploration, production, and distribution of energy.
Industrials: Companies that produce goods used in the construction and manufacturing sectors.
Materials: Companies that produce raw materials used in manufacturing.
Consumer Discretionary: Companies that sell non-essential goods and services.
Robo Taxi Initiative: Tesla's plan to develop and deploy autonomous ride-hailing vehicles.
Optimus Robot: Tesla's humanoid robot development project.
Trillion Dollar Pay Package: Elon Musk's compensation plan at Tesla.
Autonomous Driving: Technology that allows vehicles to operate without human intervention.
AI (Artificial Intelligence): The simulation of human intelligence processes by machines.
Hyperscaler Wars/Cloud Wars: Competition among major cloud service providers.
GCP (Google Cloud Platform): Google's cloud computing service.
CMV Vaccine: Cytomegalovirus vaccine.
Cancer Pipeline: A company's portfolio of potential cancer treatments.
Cash Break-Even: The point at which a company's cash inflows equal its cash outflows.
Servers: Computers that provide services to other computers.
Quantum Computing: A type of computation that harnesses quantum mechanics.
Cubits: The basic unit of quantum information.
Binary: A system of numerical notation using only two symbols, typically 0 and 1.
Distributable Earnings: Earnings available to be distributed to shareholders.
AUM (Assets Under Management): The total market value of investments managed by an institution.
Private Credit: Loans made by non-bank financial institutions.
Data Centers: Facilities that house computer systems and associated components.
GenAI (Generative AI): A type of AI that can create new content.
AI Agents: Software programs that can perform tasks autonomously.
Flex Credits: A pricing model for AI agents.
System of Record: A primary source of data for an organization.
Unstructured Data: Data that does not have a predefined format.
Structured Data: Data that has a predefined format.
PEG Ratio: Price-to-earnings to growth ratio.
Free Cash Flow: Cash generated by a company after accounting for capital expenditures.
MAG 7: A colloquial term for the seven largest technology companies.
FirstNet: A nationwide wireless broadband network for public safety.
AI Agent Race: Competition to develop and deploy AI agents.
Tectonic Shifts: Major, fundamental changes in an industry or market.
Symptom Radar: A feature that predicts health status in the near future.
Biometrics: Physiological or behavioral characteristics used for identification.
Clinical Grade Data: Data collected with the accuracy and reliability required for medical use.
Personalized Medicine: Medical treatment tailored to the individual characteristics of each patient.
Predictive Medicine: Using data to forecast future health outcomes.
Hypervigilance: Excessive attention to one's own bodily sensations.
Constitutional Authority: The powers granted to the President by the U.S. Constitution.
Anti-Money Laundering Requirements: Regulations designed to prevent criminals from disguising illegally obtained funds.

Market Overview and Key Stock Movements

The US trading day is 30 minutes in, with major averages showing a slight gain. The Dow is up approximately 54 points, the S&P 500 is up about 0.33%, and the Nasdaq is up around 0.5%. These gains are largely driven by earnings-related news.

Tesla is a notable exception, with shares down 3.5% following a plunge in profit. This decline is impacting the Nasdaq's overall performance.

Crude oil futures have spiked due to new sanctions imposed on Russian oil giants Rosneft and Lukoil, raising concerns about global supply. Consequently, energy stocks are the best performers in the S&P 500, with the XLE up 1.4%. Industrials and materials sectors are also performing well, while consumer discretionary is lagging.

In the Dow, IBM shares are down 4% after its earnings report, while Honeywell is up 5% on its earnings. This highlights the balancing act during earnings season.

The Nasdaq 100 is generally in the green, with most large-cap tech stocks performing well, though Apple is only marginally higher.

Tesla's Third Quarter Earnings and Future Outlook

Tesla reported mixed third-quarter results. While the company achieved record vehicle deliveries and strong sales, profits were negatively impacted by tariffs and reduced emissions credit revenue.

Key Points:

Record Vehicle Deliveries: A positive sign for the core automotive business.
Profit Hit: Tariffs and lower emissions credit revenue impacted profitability.
Elon Musk's Promises:
- Expansion of the robo taxi initiative.
- Progress in developing the Optimus robot.
- A plea to shareholders to vote in favor of his trillion-dollar pay package.

Expert Analysis (Dan Ives, Wedbush Securities):

Demand Stabilizing: Ives notes that demand, particularly in China, is stabilizing, which is an uptick for the car business and margins.
Long-Term Vision: He emphasizes that Tesla's true value lies in its autonomous driving and robotics/AI roadmap, which he believes will lead to significant growth over the next 12-18 months.
Robo Taxi Network: Ives envisions a future where Tesla could have 500,000 to a million vehicles operating as a robo taxi network. He believes Tesla will own this network, posing a significant competitive threat to companies like Uber. Individual Tesla owners could also contribute their vehicles to the network when not in use.
Profitability Timeline: The profitability picture for autonomous driving is a key question, with Ives suggesting investors need to look out two to three years for this to become truly meaningful.
Optimus Robot: Ives sees potential for humanoid robots in homes within two to three years, performing tasks like laundry or walking the dog. He believes Tesla will lead in both autonomous and robotics visions.
Elon Musk as an Asset: Ives considers Musk the most important asset for Tesla, driving its future as a "physical AI play."
Pay Package Approval: Ives predicts overwhelming approval for Musk's pay package, stating he is the only one capable of leading Tesla through its next chapter.

Analyst Perspective (Adam Jonas, Morgan Stanley):

Outperform Rating: Morgan Stanley maintains an "outperform" rating with a $410 price target for Tesla.
Forgotten AI Stock: Jonas calls Tesla a "forgotten AI stock," arguing the market is underestimating its long-term potential in robotics and autonomous technology.
Robo Taxi Catalyst: He believes the next major catalyst could be Tesla's robo taxi push.
Austin Fleet: Jonas suggests Tesla could remove safety drivers from its robo taxi fleet in Austin as early as the next quarter, a move he considers "a really big moment for transportation."
Shareholder Vote: A pivotal November 6th shareholder vote is seen as potentially shifting sentiment back in Tesla's favor.

Big Tech Earnings Preview and Analysis

The discussion shifts to upcoming earnings reports from other "Magnificent 7" companies.

Apple:

iPhone 17 Uptake: There's chatter about strong demand for the iPhone 17, though this won't be reflected in the upcoming earnings report.
Surprise Upgrade Cycle: Dan Ives describes the current situation as a "surprise upgrade cycle," exceeding expectations.
Holiday Season Guidance: Strong demand is expected to positively impact guidance for the holiday season.
China as a Tailwind: China, previously a headwind, is now seen as a tailwind for Apple.
AI Partnership: Ives anticipates an Apple-Gemini partnership on AI, which he believes could drive the stock to $325-$350 in a year.

Microsoft:

Cloud Wars: The conversation touches on the "cloud wars" and whether Amazon's recent outage could benefit Microsoft.
Sticky Cloud Market: Ives believes the cloud market is "sticky," implying Amazon's outage might not significantly shift market share.
Enterprise AI Workloads: Microsoft is seen as being in a "pole position" for enterprise AI workloads, with Amazon and Google playing catch-up.
Google Cloud Platform (GCP): Massive growth is expected for GCP, with strong checks indicating continued performance.

Other Notable Stock Movements and Analyst Calls

Zions Bancorporation: Bank of America upgrades Zions to "neutral" from "underperform," citing that credit fears are "overdone." The firm views a recent fraud-related loan write-down as a one-off event. The price target is raised to $62.
Moderna: UBS cuts its price target to $40 from $70 after Moderna's CMV vaccine failed a key late-stage trial. The company is ending that program but still has upside potential from its cancer pipeline. UBS maintains a "buy" rating.
Super Micro Computer: The company pre-reported first-quarter earnings, expecting revenue of approximately $5 billion, which is short of analyst estimates. Some revenue expected for Q1 will be recognized in the following period. The company reiterated its fiscal year 2026 revenue forecast of at least $33 billion. Shares are down 6%.
IBM: Shares are lower due to disappointing revenue in two key software categories. Hybrid cloud unit sales increased 14%, a slowdown from the previous period and below analyst estimates. This suggests organic software growth could be slowing.
Quantum Computing Stocks: These stocks are rising on a Wall Street Journal report that several companies are in talks to give the Commerce Department equity stakes in exchange for federal funding, indicating increased government intervention in critical economic segments.

AT&T and the Wireless Competition Landscape

AT&T's Third Quarter Performance:

AT&T swung to a profit in the third quarter, but adjusted earnings and revenues fell short of expectations, partly due to a heavy promotional campaign in a competitive market.
The company saw an increase in wireless subscribers due to these promotions.

Interview with Jeff McElfresh, AT&T Chief Operating Officer:

Competitive Landscape: McElfresh acknowledges the industry's ongoing competitiveness but states AT&T fares well. He highlights AT&T's investment-led strategy in building an advanced communications network as paying off.
Broadband Growth: AT&T recorded 550,000 broadband net additions on its fiber and fixed wireless network, the best in eight years.
High-Quality Subscribers: Over 400,000 high-quality post-paid subscribers were added.
New Campaign Against T-Mobile: AT&T is launching a campaign to address "misperceptions" and "deception" by competitor T-Mobile regarding their "price locks," which AT&T claims have loopholes. The campaign aims to highlight AT&T's network performance, value, and service.
Direct Competitor Naming: This direct naming of T-Mobile is a new tactic for AT&T, historically known for a more reserved approach. McElfresh justifies it by stating AT&T's commitment to transparency and reliability, and the need to speak out on behalf of consumers against what he calls "dishonest" advertising from T-Mobile.
Network Size Discrepancy: AT&T claims T-Mobile has the "smallest network" and that T-Mobile's advertising about having "more towers" is misleading. AT&T states its network is over 300,000 square miles larger than T-Mobile's.
Better Business Bureau Corrections: McElfresh points out that T-Mobile has been corrected by the Better Business Bureau's advertising watchdog 16 times over four years.
Consumer Decision Factors: While price is important, consumers also weigh network performance, reliability, and trust. AT&T believes it is well-positioned to deliver on all these fronts.
FirstNet Network: McElfresh uses the FirstNet network as an example of AT&T's reliability, contrasting it with T-Mobile's "T-Mobile Priority" for first responders, which he claims "may not work in times of emergency."
iPhone 17 Demand: McElfresh describes iPhone 17 demand as "good" but not a "super cycle," stating it's in line with customer dependence on the product.
Convergence Vision: AT&T's vision is for "convergence," where customers want to be connected via mobile or home Wi-Fi. They are investing heavily in fiber to support this and all wireless technologies, including AI.

Earnings Season Analysis and Market Bubbles

Expert Analysis (Scott, [Name not provided in transcript]):

Limited Room for Error: Earnings season has little room for error, with markets moving sideways.
Bank Earnings: Financials generally reported solid results, setting a positive tone.
Consensus Expectations: Consensus for Q3 earnings growth was 8%, which is seen as achievable.
Priced-In Expectations: The key concern is the degree to which these earnings expectations have already been priced into stocks.
Macro Influences: Short-term price action can be influenced by credit concerns, government shutdowns, and underlying economic activity.
Persistent Earnings Growth: The expectation is for fairly persistent earnings growth across sectors.
Tariff Impact: Companies may mention tariffs, but it's not expected to be a structural headwind.
Credit Concerns: Scott views current credit concerns as "idiosyncratic" and "mostly one-off," rather than a systemic risk, but acknowledges the need to monitor for accumulation.
AI Bubble Debate:
- The magnitude of performance in mega-cap tech/AI stocks has fueled bubble discussions.
- Bubbles typically burst due to a negative inflection in fundamentals.
- Scott's outlook for earnings growth into 2026 and beyond is positive, suggesting the AI bubble remains topical but not a significant market issue in the short term.
- He believes the AI playbook, infrastructure build, and corporate efficiency gains are still in "early innings."
GARP Overlay on AI (Growth at a Reasonable Price):
- This involves looking at companies with PEG ratios consistent with market averages.
- The MAG 7, in aggregate, has a PEG ratio of about two, similar to the other 493 companies, indicating efficient pricing of current growth expectations.
- Companies with strong earnings and free cash flow contributing to AI infrastructure are generally in good shape.
Free Cash Flow Focus: Scott emphasizes free cash flow trends and growth drivers.
MAG 7 Financial Health: The MAG 7 companies are generating astounding free cash flow, a significant difference from the tech bubble era. They are spending on CAPEX but not in excess of free cash flow, and are not heavily leveraging or issuing stock. This indicates a healthy setup.

Workday and the AI Agent Race

Workday's AI Strategy:

Competing with OpenAI: Software companies are turning to generative AI to compete with OpenAI.
Workday's New Product: Workday is rolling out AI agents, including a contract negotiation agent.
Contract Negotiation Agent: This agent can ingest contracts, compare them to desired terms, automatically redline them, and facilitate back-and-forth negotiations, automating mundane legal work and increasing attorney productivity.
Monetization:
- A new pricing model called "Flex Credits" offers customers a pool of credits for 100% access to all AI agents.
- This moves away from purely seat-based licensing.
AI as a Tailwind: Workday believes AI is a tailwind, not a headwind, for their business.
Adoption Rates:
- 75% of Workday's 11,000 customers are already using AI from Workday.
- 70% of new sales include AI or AI agents.
Data Advantage: Workday's AI is trained on highly curated, clean data from 75 million users and one trillion transactions annually, providing an "unfair advantage."
System of Record: Workday acts as a system of record for HR, finance, and now contracts, ensuring data integrity and avoiding "hallucinations" common in other AI models.
Headcount and AI: Workday underwent a restructuring to invest more in AI and optimize its global workforce. They are hiring back as many people as were part of the restructuring. They believe AI will amplify human productivity, not replace humans.
Valuations in Private AI Companies: Carl Eschenbach acknowledges that valuations in private AI companies are "frothy" but sees it as a common occurrence during major technological shifts. He believes this presents opportunities for Workday to acquire companies.
Acquisitions: Workday has made five AI acquisitions in under two years, with three in the last three months, focusing on companies with strong technology, founders, and market fit.

Quantum Computing and Government Investment

Quantum Computing Stocks Rising: These stocks are up on a report that companies are in talks to give the Commerce Department equity stakes for federal funding.
US vs. China: There's a concern that China is ahead of the US in quantum computing.
Major Tech Investment: Companies like Microsoft, Amazon, and Google are investing in quantum computing.
Practicality of Quantum Computers: Experts compare using quantum computers for everyday tasks to using an F1 car to go to the supermarket – impractical and unnecessary.
Massive Scale and Shielding: Quantum computers are large, require specialized facilities, and must be shielded from external interference.
Cubits and Parallel Processing: Quantum computers use cubits, which can exist as ones and zeros simultaneously, enabling parallel processing and the ability to perform calculations that would take classical computers thousands of years.
Potential Applications: Quantum computing could impact healthcare, materials science, and other complex fields.
Long-Term Development: While advancements are constant, widespread use of quantum computers is not imminent.
Strategic Investment: Government investment is crucial to maintain a leading position in this technology on the world stage.

Blackstone's Third Quarter Performance and Outlook

Blackstone's Financials:

Distributable Earnings: Rose 48% in the third quarter.
Inflows: $54 billion in the quarter, marking the fourth consecutive quarter with over $50 billion in inflows.
Assets Under Management (AUM): Up 12%.

Jonathan Gray, Blackstone President and COO:

Investment Focus: Great decisions in digital and energy infrastructure are paying off.
Turning Point: Gray expresses confidence in future improvements, citing a cyclical upturn in deal activity as rates and spreads have come down, and the IPO market has reopened.
Secular Tailwinds: Areas like insurance, wealth, India, and life sciences provide momentum.
Stock Action Disappointment: Despite strong numbers, shares are down 5%. Gray attributes this to market skittishness and concern around private credit, which he believes is sounder than headlines suggest.
Management Fees: Management fees were up double digits, and AUM growth is strong, indicating momentum across all channels.
Private Credit: Blackstone's credit assets exceed $500 billion. Gray believes valuations in private credit are generally at or around par for performing loans, and the relative premium of private credit over liquid markets actually increases as rates decline.
Data Centers and AI: Blackstone is disciplined in its data center investments, focusing on long-term leases with large, investment-grade companies. They see data centers and energy as essential "picks and shovels" for the AI revolution.
AI Disruption: Gray emphasizes the importance of AI's disruptive potential across industries, including finance. He believes AI tools will enhance productivity for analysts and associates at Blackstone, particularly in areas like coding, content creation, legal, marketing, and compliance.
Retail Channel and Branding: Blackstone is expanding its reach into the retail channel through partnerships with financial institutions, distributors, and wealth managers. Brand awareness is growing, but performance remains the key driver. They are not planning for a "Blackstone stadium."

Aura and the Future of Health Technology

Aura's Investment Areas:

AI: High-quality, continuously collected data is crucial for accurate health predictions. Aura is investing to enhance this.
International Expansion: Moving from a primarily US-focused business to a global one.
Healthcare Industry Integration: Expanding beyond insurers to work with providers and clinicians, integrating their platform with traditional healthcare.

AI and Healthcare Integration:

Predictive Functionality: Aura's "Symptom Radar" can predict health status in a couple of days by analyzing biometrics and trends.
Short-Term Predictions: This feature has been useful for personal health management, such as preventing illness during travel.
Longer-Term Predictions: Combining data from wearables, glucose monitors, and blood biomarkers allows for longer-term health predictions.
"Doctor in Your Pocket": The combination of a smartphone, wearable device, and machine intelligence aims to provide personalized, predictive health insights.
Personalized and Predictive Medicine: AI will enable custom health plans based on individual data, context, genotype, and phenotype, acting as a "co-pilot" for clinicians.
Addressing Hypervigilance: Aura aims to be a background guardian, not a source of anxiety. They emphasize balance and agency in health journeys, encouraging users to take breaks if needed.
Data Power: The information provided empowers users to live healthier, longer lives.

Breaking News: Trump Pardons Binance Founder

President Trump Pardons Changpeng Zhao (CZ): The convicted founder of the crypto exchange Binance has been pardoned.
Efforts to Boost Crypto Company: This follows months of efforts by CZ to boost the Trump family's crypto company.
Sympathy for Political Persecution: Trump reportedly expressed sympathy for arguments of political persecution related to CZ.
White House Statement: Press Secretary Caroline Levit stated Trump exercised his constitutional authority, calling the prosecution by the Biden administration a "war on cryptocurrency."
Binance's Return to the US: The pardon is expected to pave the way for Binance, the world's largest crypto exchange, to return to the US after pleading guilty to anti-money laundering violations in 2023.
Administration's Stance: The current administration has been more favorable to the cryptocurrency industry.