Tesla Reports Results… And Coinbase CEO Brian Armstrong On Crypto Legislation 10/22/25

0:02Live from the Nasdaq market site in the heart of New York City's Times Square this is fast money. Here's what's on tap tonight. Tesla shares in focus after the company's latest report, the EV maker missing profit estimates, but its first quarter rising sales this year. We will dive into all the details coming up. In crypto on the hill, we'll talk to the CEO of Coinbase, Brian Armstrong, as the industry looks to reignite talks for legislation this year. Plus, a big reversal in GE Vernova post earnings. Netflix breaches a key support level after its latest results. And the meme craze has found a new target in Beyond Meat.

0:33But are there other mean names that could get caught up in this rush? We'll head to the options pits to find out. I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Steve Grasso, Guy Adami, and Dan Nathan out in San Francisco. Stocks closing well off the lows of the day, but still finishing the day in the red. The tech-heavy NASDAQ down almost a percent. Semi's seeing particular weakness. Every stock, about one in the SMH chip ETF was down today. Qualcomm, the only winner. We'll get more on that in a few minutes, but we start off with Tesla. The shares right now are down by about 1.5 % after the EV maker beat Wall Street revenue estimates but missed on EPS.

1:07Same as Phil O 'Bose got all the details. Phil. And, Melissa, the real catalyst for this stock is likely to come in about 25 minutes. That's when we get the Tesla conference call with analysts. That's when we hear from Elon Musk. And that's usually what moves shares after hours. Let's go over the Q3 results. As you mentioned, they missed on the bottom line, earning 50 cents a share. The street was expecting 55 cents a share. Revenue was better than expected. Not a surprise given the fact that you had strong deliveries in the third quarter. $28.1 billion versus$26.36 billion was the analyst's estimate.

1:42Some of the numbers within the numbers for the quarter for Tesla, free cash flow was up 46%. And then when you look at the regulatory credit revenue, this has been a driver to the bottom line. Almost all of it filters down to the bottom line. Well, guess what? CAFE standards are going away. So is the demand for those credits. That revenue was down 43%. Automotive revenue overall, given the increased deliveries, up 6%. But net income was down 37%. As you take a look at shares of Tesla, remember, the call is where we'll get more details. But one thing they do say in the outlook in the earnings report is that CyberCab, Tesla Semi-Production, both are on target for beginning production next year.

2:26I'm not sure how much that's going to drive the bottom line, but that's really the only piece of news aside from the numbers that was inside the report. Melissa, again, it's the conference call in about 25 minutes that people will be focused on. Yep. Phil, keep us posted. Phil LeBeau. The stock is up about 35 percent since its last quarter. So it has every reason to want to sell off in the after hour session. You had to stand less than 2 percent at this point in time. Although more can come. Who knows? As Phil just said, the market is waiting for the conference call, which is fine. Again, we've had this conversation.

2:55If this was just valued as an automobile company, it's not a great quarter. Yet record revenue, I get it. And the free cash flow of$4 billion, good for them. Then you look at the margins. You back out basically regulatory credits, and it's below 15.5%, which is worse than the street was looking for. So that business has been in decline, regardless of what you want to say about deliveries and stuff. I mean, it's a business that is reverting to the mean. Now, people get excited about other things, which is why I don't think the stock is as low. It should be on the back of the quarter. We'll see what they say.

3:26It's the promise of everything else that's going to drive the stock. And they did say in the shareholder deck that Optimus lines are being installed right now. Who knows what the time frame is on that and whether or not it will ever contribute to revenue or at what point it will. But it's one of those stories along with robots that people want to hear. And so Optimus ahead of volume production next year is something that's there. The robo taxi story is alive and well. The the energy storage story is a massive pickup over 2Q. I think they are 2.4 billion. They just printed 3.4 billion. I mean, it's 12, 13 percent of the revenue base.

4:02It's not insignificant. And it's also one of these stories that is part of the entire mosaic. Now, it may sound like, hey, Tim sounds somewhat bullish here on Tesla. No, I'm not. I don't think I'm it's impressive. The price action, as we've just said, after the move, it's had stocks effectively. You know, 2.2 times up over that April low. But I think you are not chasing this one. That was a third-person question. That was even better. First time I've ever done that. First time Tim's ever done that, by the way. So there's a lot of other bets here. And the stock seems to be the most expensive that it has ever been on a P.E.

4:36ratio. But you're paying for the other bets. You're paying for, as Tim said, the robots, the cybertaxi. For me, it looks a little double toppy for me if you expand that chart back a year. If you look at it just on other bets, I think you're probably too early for those other bets, as you always are with Tesla. I'd probably stay away, let the smoke clear, and see when the other bets actually develop into something that's actually revenue-based. Right. Dan, I want to get your take on Tesla, but it's interesting because today GM had a tech day in New York City, and they unveiled Eyes Off Driving, which is like a competitor to full self-driving.

5:13And you've got to wonder, you know, at this point, you take a look at the offerings in terms of investments in Autoland, and there are other ways to play this aside from Tesla at this point if you believe in self-driving vehicles. Yeah, I mean, you know, here's the good news, right? So I guess one of the notes in that presentation was that all of Tesla's cars right now are capable of full self-driving, right? It hasn't been approved yet. It is still supervised full self-driving. And there's going to be a lot of competition when they finally get to volume production of the cyber taxi. So that's one of the big things we expect to hear about today.

5:50I think every time Elon has the opportunity, he does that. You see the mention of Optimus. But again, I'm here in San Francisco. There are 800 Waymo's or maybe more on the streets there. This is going to be a hard one to catch up to in the near term. And I'm not telling you that Waymo is making money out here, too. But this is going to be a loss leader for some time. And then when you think about the cars that they actually make, that pull forward right there, Guy just mentioned those auto gross margins. They're not great, right? So the idea of competition here in the U.S., well, it's coming despite the fact that GM has pulled back a bit.

6:24But when you think about their market share here, it's below 40 percent. In China, it's below, I don't know, it's probably mid single digits. In Europe, it's below 10 percent. So they're not growing this business at a time when there's a lot of competition coming. And the last thing I'll just say about this free cash flow, which is really one of the only things that stuck out that was, I don't know, particularly positive. I mean, CapEx was down 37 % year over year. If you think that they're focused on the future with robots and cyber taxi and AI, wouldn't you expect CapEx to be higher? So, you know, they might have been playing some games on the free cash flow side.

6:57All right. The stock is down again 1.8 % right now. For more on the quarter, Fast Money friend Gene Munster joins us with his reaction. Gene, what's your take? Melissa, in the outlook section that really jumped out to me was that they are well-funded and have liquidity,$41 billion in cash, up$4 billion sequentially. Everything that we're talking about today is accurate, that the investment case for Tesla is all about on what's to come. And the reality is that in order for that future to become a reality, you have to have a lot of money to do that. That$41 billion compares to GM and Ford each have about 23 billion.

7:36So that was one of my takeaways, that they've got a lot of money to see this forward. There were a couple of negatives that I picked up on. One was relative to the FSD miles driven. So they don't give the exact number, but they give a chart and you can kind of angle into what it was driven. The incremental miles are about 1.1 billion in September. That's the same as what it was in June. It was 0.7 billion in March. So you would if that was at some inflection point you would start to see that ramping a little bit more and last I think it's 90 % chance that that more affordable Vehicle is already out.

8:11It's the model Y and model 3 based on some language in the deck We'll hear more on the call, but overall Melissa The biggest takeaway is this is still a story about do you believe and they got plenty of cash to see that future forward You, though, think the stock is going to hover around where it is for the rest of the year, right? Not necessarily. I mean, it comes down to still waiting for these breakpoints. And I think one of the beautiful things about investing in Tesla is that the community and the investing community is so conditioned for misses when it comes to Elon and expectations. It is, you know, they said FSD in some regions by the end of this year.

8:52That's probably not going to happen. But yet, if they do pull one, if one of these things start to break in a direction by the end of the year, for example, more cities, they've talked about two potentially additional 10 cities with robo taxi, that's going to be the lever to the stock. I think it comes down to a very simple question is, do you believe that Tesla is a pole position with physical AI? And if that is the case, you just need to own it because it's hard to predict when these moments are going to pop out. Gene, Tim, so, right, you believe, and$41 billion seems like of all the numbers that they've reported today, you don't care about gross margin.

9:29You care about they have the ammunition to do whatever it takes. What does that make the stock worth today? And I know that's not fair. And, again, a DCF is definitely not something I think you're trying to attach it with. I appreciate where you are on the upside and why I don't want to be too cute. But if someone's looking at the stock today and saying what's it worth, can you throw a number on that? So you have to look at it where the growth is going to be. And right now it's trading at about a 13 revenue multiple. So compare that. Usually it's been kind of around where Apple's at. Apple's at a nine revenue multiple.

10:02And so it's an order of magnitude ahead of where that's at. And so the simple takeaway is that if you use like traditional ways of thinking about stock and evaluation, this is overvalued. If you take a perspective that they're going to have a breakout and the rest of the companies I actually think that the GM news today was affirming of Tesla's lead on autonomy. But if you take that, you can have multiple years of high growth, 30, 40 percent growth. And so the simple answer is that this is like we've been in unchartered territory with the stock for a couple of years. We continue to be in that.

10:35And no, there is there's not historical or comp group valuation support. But yes, there is when you think about the moment we're in when it comes to tech. Gene, thank you. We will check back in with you a little bit later on after the call kicks off. Again, we're about 21 minutes, 20 minutes away from that call starting. Remember, also, November 6th is the annual meeting. I don't know if anybody wants to play it on the short side. If you're going to do so, not before that meeting. I mean, that's the floor. And there's also they have to meet certain sales in cars, too, right? They want 20 million sales in 10 years.

11:10are they going to be able to do 500 ,000 a quarter so that they can meet that barometer? I'm not sure they can do that. So we're all forgetting about car sales. It's only going to become more tough going forward for Tesla. It only works if there are car sales. I mean, the whole, you know. Flywheel. Right. Yes, 100%. And we can say the things that we talked about for the last 11 minutes doesn't matter in the broad scope of things. And in my opinion, if you want to be bullish in Tesla, is because his$1 trillion pay package, one of the metrics is stock price. So you want to say, you know what, he's incentivized to watch this thing go higher.

11:48That, to me, is the overriding reason. But just on the – listen, Gene just said it. It's trading at 13 times revenue-ish, right? Think about this. They're going to do only five – I'll round up to$6 billion in net income against that$110 billion. I mean, that's an extraordinarily expensive company just on those two metrics alone. All right. Let's turn to the broader markets. In the meantime, stocks closing firmly lower but off the worst levels. The tech-heavy Nasdaq leading the losses down nine-tenths of a percent for its second strike session in the red. The S &P lower by half a percent, while the Dow shed 330 points, both those indices snapping three-day winning streaks.

12:23Treasury Secretary Scott Besson confirming earlier reports that the Trump administration may impose new restrictions on exports to China of goods-containing U.S. software. move that could impact everything from laptops to jet engines. Tech among the worst performing S &P sectors today, the Venex Semi ETF and iShares Software ETF hit particularly hard. I think the headline numbers don't really tell the story of the markets today. I mean, intraday, you saw semiconductors down as much as 4 percent. You saw the VIX spike higher by about 15 and a half percent midday. And then it all sort of settled out, Dan.

12:55I'm wondering what you what you made of it. Yeah, I mean, these headlines back and forth between China and Besson or whoever else is representing the Chinese and the U.S. here, they just seem to be, you know, a bit of a pretzel here, just kind of getting twisted around day to day. And I just don't think that's a way to trade the market. I suspect we'll find, you know, some sort of solution when it comes to, you know, our tech. But, you know, one of the things I think is worth noting is just some of the advancements that the Chinese are making. And it's being reported, it seems like, on a daily basis on the chip side to kind of get away from NVIDIA chips and that ecosystem.

13:32So it seems to be more of the same as it relates to semis. Semis seem to be right in the middle of these trade talks. Obviously, on the other side of it is Rare Earth. All the other stuff about software and the like, it's a bit of a sideshow if you just look at some of the names and where their exposure is, at least from where I'm thinking about it. So, again, I think you have to keep a closer eye on what China's doing as opposed to what we're doing over here as it relates to our semis. If tech fails, it's like the flywheel within the market, right? If tech fails, it's 30 percent of the overall market.

14:04Semis were responsible for most of the move up in the overall market over the last five years. If they fail, the market doesn't work. Yeah. And semis are up 35 percent since June relative to the S &P. So there's room for a pullback. But what's fascinating about this market, and it's part of what has people troubled. You haven't seen the S &P trade. You haven't seen the NASDAQ trade, excuse me, the semiconductor, the Sox index trade down to the 200 or through the 200. Otherwise, in April, going all the way back to the bottom of the market back at the CPI of 22. But I just feel that the extraordinary announcements and the move in the market cap in the top six names in tech are something that are supposed to give something back.

14:51Now, we were talking on our call today about Oracle. I mean, that move in Oracle is continuing to make a lower low. Dan talked about it filling in that gap. Well, I mean, so far heading in that direction, it's just a question of do you think that the biggest names in tech that have had everything to do with the market staying higher can continue to give you these announcements? I look at the volatility index today. You said it. There's no in terms of what we've seen over the last year. There's no reason for the VIX to be trading 21. So the S &P was down half of one percent. Maybe at its worst case, worst point today was down a percent.

15:23I mean, that justified the move of that magnitude. And we've been talking about this. There's definitely something going on below the surface in the volatility index. I do think vol is going to be a story for the remainder of the year. And I think today, and we saw it the day that the VIX spiked up to 28, those to me are sort of warning signs. And then you have curious trades also. I mean, Treasuries, the 10-year yield is firmly below 4 % at this point, 3.95. We've got gold continuing its decline here. I mean, there are a lot of other little pieces here that fit into this market mosaic that really paint a picture of what seems like unease.

15:56a desire to take some froth off or to take some winners off the table? Why not? I mean, you know, I mean, the fever is broken is ultimately a good thing. As someone that's bullish gold and likes this move because it allows me to actually either allocate some more, allocate some more clients into it without feeling like I'm chasing it. I mean, there's nothing about the gold trade that's changed. What's changed is that actually the FOMO related to gold really led to margin buying. That's led to oversold conditions on the way down. Having said that, gold could probably check lower. It doesn't change anything.

16:27The fact that we have a market that has had a few sectors, I mean, whether it has been digital, quantum, AI, AI announcements, I mean, what's going on for the last six weeks hasn't been reality. If we want to see a nice rally, and I think, by the way, that rally is through Thanksgiving, not through year-end, I think we're probably right around the corner. All right. Meantime, let's get to Netflix shares because those were down 10 % after missing Q3 earnings estimates last night, its biggest drop since April of 2022. The streaming giant citing an ongoing battle with Brazilian tax authorities as a reason for the miss.

16:59At its lows, Netflix traded below its 200-day moving average for the first time in more than two years. Clearly, it's more than a Brazilian tax dispute that's got the stock down 10%, Guy. Yeah, the Warner Brothers, we talked about it last night. It's definitely not that because if you back it out, it was actually a good quarter. To me, what it comes down to is growth. You're probably saturated in the United States. I think we all agree with that. People are now looking at valuation. But it's the Warner Brothers headline, whether it's real or not, The fact that there's news out that Netflix is thinking about a deal that would be worth somewhere between$55 and$70 billion suggests that they might feel necessary to grow by acquisition.

17:35The market's not going to reward them for that. We said it last night. If it broke a certain level,$10.50 was the prior all-time high in February. That's where it appears to be going. And it's been a declining trend line since June. So technically, the setup doesn't look great. And the fact that they're not giving out sub numbers, I know they've changed to a more mature company. What happens when you change to a more mature company? You don't have explosive growth anymore. And people have been paying for explosive growth. Now, I do believe ad dollars can come in and they can ratchet that up. But I would not be buying the stock right here.

18:05I wait for a break below$1 ,000. Well, I don't feel like I need to go out and buy Netflix here. I think the WBD headlines, I mean, there's a lot of people definitely checking to look at these assets. I think there's a lot of these media assets in play. And I think ultimately it's positive for Disney. It's probably positive for Paramount Sky. It's probably positive for WBD. I might be worried about as a Netflix shareholder that their growth has been totally organic and they haven't needed to go out and make a big purchase. Is that a reason? Possibly. I think it's multiple. I think you've come a long way.

18:38I think we're waiting for the announcement in 26. I think we need a little bit more of a vision on the runway other than the current content slate. I understand that Netflix expressed interest in WBD, but it just doesn't make any sense in terms of what it's done in the past and its price discipline, Dan, that it would actually reach for these assets. So if the decline of 10 % was based on this idea that Netflix would overpay for some sort of asset from WBD, I mean, I don't know. That seems a little bit uncharacteristic, let's say. Very uncharacteristic. I mean, listen, this would be one of the things that would mark a significant change in the trajectory of Netflix's business and their strategy.

19:13And, you know, I remember going back like 12, 13 years and we spent a lot of time on the desk just kind of debating this full streaming sort of move and the original content and the negative free cash flow that was associated with it. And this is one of the best performing stocks in the last 10, 12 years in the entire S &P 500, I think, especially as it relates to mega caps. So if they were to go out and bid for these assets and take on all of that debt and the infrastructure that exists there and just the disparate amount or just the sort of content they have, you can say, well, this is me. That catalog is made for a platform like Netflix.

19:50But it would just signal something that I think a lot of investors haven't heard in a long time and really would not want to hear about going forward. Coming up, more after hours action to bring you shares of IBM on the move after reporting results and numbers from the quarter next. And you won't want to miss our conversation with Coinbase CEO Brian Armstrong, fresh off his discussions with lawmakers on the next move in crypto legislation, what he is hearing in D.C. when Fast Money returns. Back in tune.

20:23We've got breaking news out of D.C. President Trump just meeting with the NATO Secretary General Eamon Jarvis has got the details. Eamon. Melissa, that meeting is ongoing right now in the Oval Office, but the president just told reporters that he is going to meet with Xi Jinping in South Korea next week. You remember yesterday he had raised some eyebrows by suggesting, well, maybe that meeting could fall through, might not happen. People get upset if there is tensions. Today, though, it sounds like this meeting is very much on. Here's what he said. In South Korea, I'll be meeting with President Xi of China.

20:55We'll have a pretty long meeting scheduled, we can work out a lot of our questions and our doubts and our tremendous assets together. So we look forward to that. I think something will work out. We have a very good relationship, but that'll be a big one. So the president there alluding to some doubts and some concerns on both sides, saying that he's optimistic that they'll be able to work those out. And, you know, that the market's been very much focused on this meeting because if there is going to be an overall trade deal between these two countries. The assessment is sort of on both sides of the Pacific that there's no way that could really happen without those two leaders in the room together to do the final deal making and do the final handshake.

21:38The president said there that it's going to be a fairly long meeting on the schedule. We don't know exactly when that's going to take place. But of course, oftentimes meetings with the Chinese leader do have to be pretty long because of the translation back and forth from both sides. They want to make sure each side understands each other very clearly. So going back and forth on that can drag those meetings out a little bit longer than some of the other meetings that the president might do, Melissa. All right, Eamon, thank you. Eamon Javers. Let's move on to IBM. We've got an earnings alert here.

22:09Legacy tech giant lower despite a top and bottom line beat. Seema Modi is here on set. She's been on the call. She's got the latest. Hey, Seema. Melissa, this is a trend now that we're seeing. Top and bottom line beat. Even the company raising their revenue guidance to more than 5%, up from, quote, at least 5%. Free cash flow of$14 billion, up from$13.5 billion. But when you dig into the performance of each business, the story is a bit more mixed. Take software, for example, which makes up nearly 50 % of their business, came in line with street expectations after last quarter's miss. And JPMorgan analyst Brian Essex did say software would be the primary driver of the stock compared to other segments like consulting and infrastructure.

22:48Perhaps that's what is weighing on the stock right now. Now, IBM's red hat business did experience a slight tick down in the third quarter from 14 to 12 percent quarter on quarter. I spoke to IBM CFO Jim Kavanaugh, who didn't see that as concerning. He actually called out IBM's aid AI book to business, which jumped to 9.5 billion, up 50 percent quarter on quarter. He says IBM is continuing to help enterprise clients speed up their productivity using this technology. Now, even with the big run-up we've seen in shares of IBM over the past couple of months, only eight buy ratings across Wall Street, which I found really interesting, Melissa.