Tesla’s Robotaxi impresses; cyber and tech stocks face mixed investor views

Key Concepts:

• Tesla's autonomous driving capabilities (Full Self-Driving - FSD)
• Robotaxis
• Lidar technology
• Cybersecurity stocks
• Geopolitical tensions and market impact
• "Magnificent Seven" tech stocks
• Risk-on vs. safe-haven assets
• Software as a safe haven
• Valuation of tech companies

Tesla's Autonomous Driving Technology

• Initial Impressions: Dan's associate experienced Tesla's autonomous driving in a limited, geo-fenced area and found it "extremely smooth" and "way impressive," even better than Waymo's initial performance. He rated it a "ten out of ten" based on two 15-minute drives.
• Future Potential: Dan believes that Tesla's autonomous driving capabilities, with plans to expand to 25-30 cities within a year, support a trillion-dollar autonomous valuation for the company.
• Concerns and Criticisms: Sara notes reports of Teslas speeding and swerving into the wrong lanes while in FSD mode. She questions the safety and efficiency of Tesla's robotaxi premise, especially compared to human drivers.
• Lidar Absence: Sara expresses concerns about Tesla's lack of lidar technology and the limited safety data released by the company. She believes Tesla is "pretty far behind most of their competitors" in the autonomous driving space.
• Counterpoint: Dan looks forward to demonstrating Tesla's maneuverability to Sara in Austin, suggesting confidence in the technology's capabilities.

Tech Trade and Safe Havens

• Muted Performance: The "Magnificent Seven" tech stocks are showing muted performance, indicating investor uncertainty.
• Cyber Warfare Risk: Sara suggests that in an uncertain geopolitical environment, especially with the risk of cyber warfare, software names might be seen as less safe. While physical assets are harder to target, software companies are vulnerable to hacking.
• Valuation Concerns: Many of the "Magnificent Seven" stocks are trading at relatively high multiples, making investors hesitant to increase their positions.
• Preferred Tech Stocks: Despite the uncertainty, Sara still likes Meta and Nvidia.

Cybersecurity Stocks as a Play on Geopolitical Tensions

• Increased Demand: Dan believes cybersecurity stocks will see increased demand due to geopolitical tensions and potential Iranian threats.
• Top Picks: Dan recommends Cyberark, Palo Alto, CrowdStrike, and Zscaler as top picks in the cybersecurity space. He also suggests Palantir will benefit from the situation.
• Risk-On Perspective: Dan argues that tech will be "on" because the removal of the Middle East black swan event relative to a weakened Iran.
• Software as a Safe Haven (Counterpoint): Dan disagrees with Sara's assessment that software is less safe, arguing that companies like Microsoft and Oracle have huge valuation upside and will see increased demand.

Specific Stock Opinions

• Meta: Sara likes Meta because it is "reasonably priced" and its platforms are widely used for information consumption.

Conclusion

The discussion revolves around the current state and future prospects of Tesla's autonomous driving technology, the broader tech trade in light of geopolitical tensions, and the potential of cybersecurity stocks as a safe haven. While Tesla's technology shows promise, concerns remain about its safety and competitiveness. The "Magnificent Seven" tech stocks face valuation pressures and potential risks from cyber warfare. Cybersecurity stocks are expected to benefit from increased demand due to geopolitical instability. There are differing opinions on whether software companies are safe havens in the current environment, with some arguing for their vulnerability to cyberattacks and others highlighting their potential for growth and increased demand.