Tesla’s Stall Continues… And The Long Term Impact From Trump’s Economic Policies 02/11/25

0:00Live 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. A Tesla tumble. Shares trading at nearly three-month lows. Is there more downside to come, or will Elon Musk get shares revved up again? And three weeks into his second term, we are getting a clearer picture of Trump's economic policies. Will early optimism prove justified, or is there a reckoning on its way? Plus, digging in on earnings from Lyft and Supermicro, Apple reportedly partners up to bring its AI to China, and we go off the charts to find the next move in the energy trade, where one of our traders sees that space going.

0:32I'm Melissa Lee coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Dan Nathan, Guy Adami, and Katie Stockton, founder and managing partner of Fairleaf Strategies. Welcome, Katie. And we start off with Tesla in turmoil. The EV stock plunging more than 6 % today, hitting its lowest level since mid-November and locking in a five-day losing streak. The stock has lost a third of its values in setting a record in December, retracing more than half its post-election rally. The latest round of losses coming amid a slew of potential distractions for CEO Elon Musk heading up Doge.

1:05Here he is, in fact, today in the Oval Office with the president as well as his son. Then there's his$97 billion bid for control of open AI and, of course, his nonstop posting on X. On top of that, there's concern over the slowdown in Tesla's core business. The company seeing sales in France, Germany and China plummet to start the year. Bulls seem to think the push into self-driving will be the next positive catalyst for the stock. But will that be enough to give Tesla the edge over the competition? What are we looking at here? And we take a look at this slide, Dan. I didn't look at the slide, but that's a cute kid over there.

1:37I got to be honest with you. Super cute. You know, listen, on the last call about a week and a half ago, I mean, Elon really didn't spend a lot of time talking about, like, the car sales and what's going on in Europe. And, you know, we're down here in the U.S. also, and it doesn't look like they're going to make their deliveries this year. I know it sounds really early just to kind of extrapolate what they did in January, but we know they're in a price war. We know that there's threats about tariffs. We know that, you know, these EV credits could go away. We know that price war that's been going on for three years is not abating anytime soon.

2:06But what he spent a lot of time talking about is robots and robo taxis and how that is going to inflate the price of this stock. And so when I think about what's going on right here, if you bought the stock on the breakout from November 5th and it was nearly a double from November 6th to December 18th, You know, you have to believe in his proximity to the president and the White House and what that might mean for deregulation is going to help all the things that he's not focused on right now. They're not making a low end EV to compete with some of the low end competition that's coming from China and other places.

2:36So at the end of the day, if the promise was that we're going to get to full self-driving, then we're going to get to robo tax. It's going to happen sooner than you think. And oh, by the way, this optimist thing is going to be really helpful in making all this stuff. And you can buy one, too, and you can have it in your house. That's not happening anytime soon. So when you think about this stock, I mean, it really could round trip the entire move back to November 6th because the fundamentals of the car business are not particularly good. And they're only getting worse right now. There are a lot of things to come.

3:01And yet BYD today announces its self-driving offering and it's called God's Eye across all models and not for an additional fee, which which Tesla is offering in terms of full self-driving. They're starting at a very low pricing point. They're going across three levels. and this could actually force, you know, the rethink in terms of these services. Are we going to charge for them or not? And there might be pressure to not charge for them. The whole company. Yes, absolutely. And, you know, January 29th was a Wednesday. We were here together. They, Tesla, reported earnings. Margins were a disaster.

3:33The worst margins in over five years. And I said to you that night, if we had played the game, if you had told me last night this was going to happen, where's the stock? I said it would have been down$50. It was not. As a matter of fact, it got up to about$4.15 or so. Now here's the$50 in the rearview mirror. I'm not sure why the market's deciding now to sort of punish them on what I think was the back of that quarter and some of these headlines. But I do think it's justified. And Dan talks about round trip. Yeah, maybe. We stopped today at about the 150-day moving average. It's a normal place for us to bounce.

4:04But, you know, fundamentals matter. The fundamentals to me suggest lower. Tim? It's always been a story of we're betting on the concepts and we don't necessarily have delivery. I mean, energy storage is another one of these things that the analyst community got really excited about. I mean, ultimately, the revenue number missed pretty badly. Yes, there were some positives on the margin, but then there was and, you know, let's point to the lowest cost of goods sold on record. And there's some dynamics that I think are things that that the bulls can point to. I just take it back to what's the company worth?

4:33And it's much like we're going to have a conversation about, you know, Chairman Powell and they can only price in tariffs. when they actually see the impact. I'll price this into the model when I actually have these revenues, not where I think growth could be. That's always been my story here. You know, the current P.E. is north of 150, even after some of this pullback. That's what it comes down to. Again, there's a lot of moving pieces. There's a lot of unknowns. There's a lot of upside. There's a lot of excitement. There's a lot of core businesses that certainly are hard to put a number on. And that's exactly right.

5:02I'm not putting a number on them. Today, the action was not very good, Katie, on very heavy volume. It finished as lows. Yeah, so it took out some support around 350. It does follow a major breakout, though. That was a big resistance level for it to get through post-election. So we think this is a countertrend move and ultimately something that will yield a buy-in opportunity, believe it or not, because it ran up so quickly, though it is not oversold yet from an intermediate-term perspective. We have no countertrend buy signals, so we think it'll take some time to get there. And, of course, there's all the arguments that, you know, he's tight with Trump and therefore things like investigations, like NHTSA investigations or the DOJ investigation, maybe those will go away magically or be lessened if there's something, if there's wrongdoing to be found.

5:47At the same time, there's also backlash when it comes to his association with Donald Trump. It's interesting that when those were brought up, I mean, it didn't seem to have any impact at all. I mean, maybe in some odd way, the fact that they've effectively cozied up to the administration and they will be dropped, maybe he'll get punished on the back end for that. I'm not sure. But to Katie's point, I think her work would suggest like 280. If you go back and look like last summer, that was the level we had trouble at a couple of times on the upside and then finally broke out post election. It makes sense to do a round trip.

6:17And the round trip that Dan talks about is this 280 level. Then you can have a conversation about buying it. Yeah, I'll just say this. And Tim laid out some of the other things that you could get excited about from a fundamental standpoint. And again, we don't know when this is going to happen. And, you know, if you want to give Musk credit for anything, it's like he puts this vision out in the world. He pursues it very hard. He makes a reality happen for the most part. Again, eventually there will be full self-driving. There will be Tesla robo taxis. There will be robots, all that sort of thing.

6:42But if you're willing to do that now, if you're willing to pull forward all that excitement, it's kind of hard to see how you can make money like doing that for, you know, again and again. I mean, this is one of the worst on November 5th. This is one of the worst performing mega cap tech stocks over the prior three years during this whole bull market. So it got really disconnected from fundamentals for a bunch of reasons that you can't put your finger on. So I guess when I think about this coming in, I think there's a potential air pocket. If Musk were to leave the administration, whatever you want to call it, then all of a sudden, if you were really excited from 250 up to 500 essentially, and now here you are at 325, Where do you think this stock goes if he were to leave Doge, if he were to actually have beef with the administration?

7:25It goes lower. It doesn't go higher. We've got some breaking news out of the White House. Eamon Javris has more on that meeting between Musk and President Trump. Eamon. Yeah, Melissa, it ended up being something like a half an hour news conference with Elon Musk and Donald Trump. and Elon Musk was asked by reporters in a number of different ways about the critics of Doge, his government efficiency operation, who say that Elon Musk is basically operating without any accountability, without any transparency, without any checks and balances in the normal course of business. Here's what Elon Musk had to say about that.

8:01All of our actions are fully public. So if If you see anything, you say, like, wait a second, hey, that seems like maybe there's a conflict there. It's not like people are going to be shy about saying that. Transparency is what builds trust, not simply somebody asserting trust, not somebody saying they're trustworthy, but transparency so you can see everything that's going on. And then you can see, am I doing something that benefits one of my companies or not? It's totally obvious. And if we thought that, we would not let him do that segment or look in that area. if we thought there was a lack of transparency or a conflict of interest.

8:39And we watched that also. So you heard the president there at the end saying that if he thought there was any conflict of interest, he wouldn't let Elon Musk do any of the things that he's doing. You know, the problem with that, the critics will say, Melissa, is that, you know, really it's just down to the White House's judgment about whether it's appropriate for Elon Musk, for example, to be involved in Pentagon spending decisions when the Pentagon is obviously a huge contractor of Starlink or with NASA spending when NASA is a huge contractor with SpaceX. So we'll have to see how this relationship sorts out over time because, you know, there are some potential conflict of interest pitfalls here for Elon Musk.

9:19But as for now, he says, look, everything I'm doing is public. And Trump says we'll keep him away from anything that wouldn't be appropriate. Melissa. All right. Eamon, thank you.

9:31Eamon Let's get back to Tesla and its self-driving cars here and its pursuit of self-driving. Let's bring in Fred Lambert, the editor-in-chief of Electric. Fred, great to have you with us. Thanks for having me. What do you make of, I mean, overall, do you think that it is a benefit or it is a risk that Elon Musk is so tightly associated with Donald Trump? I would think right now we've seen the impact that we are kind of missing with the it's hard to you cannot gauge the impact of Elon's political middling right now it's impossible to put a number on it it's it's having an impact most likely than not but it's it's very difficult to put a number on it to to to say that like of this today in the market what we're seeing is the impact of Elon Musk in his dojo middling.

10:25Right. I'm just curious, though, I mean, in terms of the core business and the hopes of investors in Tesla stock, I mean, you wonder how is it going to benefit the core business that Elon Musk is involved with the Trump administration? Is it more cons because he's distracted? He's got other things to do. The other things that he's he's he's doing on behalf of the United States instead of working on his business. Is it more of a benefit? Because perhaps those investigations that we talked about, the NITSA investigations into six crashes, the DOJ investigation to the claims of full self-driving, the regulations that will pave the way for RoboTaxi, all those things will be benefits for Tesla stock ultimately.

11:02Well, over the Biden administration, there were several investigation minutes into Tesla's self-driving products in the US. And they got a slap on the wrist with basically having to change a bunch of alert system and monitoring driving system. And that was basically all they had to force Tesla to do a complete stop instead of what we call in Canada an American stop or in the US sometimes you call it a Californian stop. That was basically it. So in the U.S., regulators are not the bottleneck for Tesla's self-driving effort. The technology is the bottleneck. And Tesla's technology right now, based on the latest Crosso's data, is at about 500 miles between critical disengagement.

11:43And Tesla itself says that it needs to be at 700 ,000 miles between disengagement to be safer than human drivers, which is what NHTSA says is miles between human collisions, which makes sense. So how important is this event in Austin in June for the self-driving car? Well, that's a masterful play by Elon. He's going to be moving the goalposts, basically. So Tesla has been promising to all its customers since 2016 that all cars they're building is capable of full-cell driving, has the hardware full-cell driving. They've been wrong twice about this. They already announced that they have to change the computers on two different occasions.

12:23So what they're going to do right now is basically Elon is losing all credibility when it comes to self-driving. He's literally been saying that it's going to happen by the end of the year for the last six, seven years or so now. So what he's going to do in June instead is he's going to launch Waymo. He's going to launch a service that's geofence that is teleoperated or teleoperation supported remotely. It's going to be most likely to not map, though that's not entirely sure. And it's going to be an internal fleet rather than the customer vehicles that he's been talking about for years. So basically, it's going to announce that Tesla has achieved unsupervised self-driving, but it's going to be a service that Waymo has launched for years ago, including now in Austin already.

13:01So, Fred, I've been reading articles, including one on Electric, about analysts in Europe specifically that are concerned about the Elon Musk political sort of, you know, siding with the far right wing of various parties in Europe, particularly in Germany, and how that can actually backfire, particularly when it comes to sales in Germany, which is a very important market for Tesla. You ran an article on Electric that had pictures of various, you know, there's instances of vandalism at various stores in Europe. There's also in the Berlin factory, excuse me, they projected a picture of Elon doing that salute, that Nazi-like salute, along with Heil Tesla onto the face of the Berlin factory.

13:47I mean, what do you make of those sorts of reports? I mean, in Europe, they take the Nazi stuff pretty seriously for good reasons. not that we don't necessarily hear but it's less of a reality for us in North America so saying similar things in China which you know it's this this is the most important market you know Elon could call his nest kids Adolf and they probably would be fine in China but in Europe we're seeing the impact right now I think obviously there's the model Y change over it's also not helping Tesla sells but in some market you can see that it's a model 3 that's hurting even more than a model why.

14:23So in Europe is the only market right now that we have data that we can clearly see that Elon's meddling in politics is affecting Tesla negatively and in a significant way. The vandalizing stuff, I mean, it's, you know, it's frustration. People, like, it's nearly criminal, so I don't put that much weight into that. But the failing sales are pretty clear to me. Yeah. Fred, thanks so much for joining us. Great to get your take. No problem. Fred Lambert of electric? All in all, I don't know. What do you make of this? Well, again, remember six months ago or before this parabolic move, I think it was universally thought that the company had probably 12 to 18 months of rough sledding for markets, for valuations, for things that would drive the stock higher.

15:07And there have been different reasons why a lot of them have been certainly macro related to the scene that go higher. If you look at 25, the core auto business has headwinds. You've got higher startup costs. You've got dynamics around China and the risks that we've talked about. And I just think that those are the things that for an investor, at least like me, there's very little to be excited about in the short run. You can talk about the DCF model out in 2035 on Robo and that it's worth 80 billion in revenues, which some analysts are doing. But I don't do that. Meantime, we've got an earnings alert on Lyft.

15:38The stock is dropping sharply after missing top and bottom line estimates. That conference call is now underway. Our Deidre Bose has got the details. Debo. Hey Mel, so it's really that soft guidance that's taking shares lower in the after hours by about 8%. When I spoke to CO David Risher on the results, he attributed the soft guidance to new pricing pressure, he says, that showed up at the end of last year. He said, we price competitively and reliably. If someone else takes it down, we will match them. So that has been sort of weighing on their earnings. The after hours decline, that wipes out all of Lyft's year-to-date gains.

16:12and the bump that it just saw yesterday on that announcement that it will roll out mobile-powered robo-taxis in 2026. I also asked Risher about the impact of Waymo because robo-taxis is really the thing that moves these ride-sharing stocks. Waymo has expanded in San Francisco, which is an important market for Lyft. But Risher says he sees it still as a premium product, so not exactly competitive. The earning call is ongoing right now. The CFO is speaking. They haven't got to Q &A, but I'll bring you any highlights. Back to you, Mel. All right. Debo, thanks. Deidre Bosa in San Francisco. Yeah, we talked about this yesterday, at least the announcement, the timing of it, pretty curious about robo-taxis in 2026, you know, the day before earnings.

16:50You know, I looked at this thing and I said, listen, you know, it probably is okay here. You're looking at a four or five, you know, billion dollar enterprise value. If they are really serious about partnering with Mobileye and others to do these ring-fenced, you know, robo-taxis, it's probably like a cheap entity. It probably could still get bought by a Google or other sort of companies that actually divested some of their interests in robo taxi or autonomous vehicles over the last couple of years. So, you know, one thing I do not like, the stock had that huge gap last quarter because they guided up for bookings for this year.

17:21And now they kind of miss that. And the guidance seems kind of squishy. So that's not great credibility right there. You know, it's had a good oversold bounce. But to me, with this likely breakdown tomorrow, it's an avoid. We often see these oversold retests from these stocks. And in fact, we think the same might happen with the broader market. So that there is risk, broadly speaking, and that this pickup in volatility from a bottom-up perspective, including these earnings reactions, is more negative than positive. You're glad you didn't put it in band, make it bland. Yeah, no. Because it would have really been bland if you added it.

17:53That ETF would not have tasted so good. Acronym, excuse me. I think you've got a dynamic here where it's a prove me story. And even though bookings were up 15 percent and this was a record quarter and you've got the CFO out there saying that market share is the best they've seen since 2022. There's still a lot of things that I think are left unsaid. So to me, I think the market punishes on something where the guide is not great. That's not surprising. The stock is basically traded in a very wide range, but in a range for the last year and a half. And I think it's about a story that still needs to establish credibility.

18:27Uber, by the way, is down one plus percent. In sympathy. And I think, you know, my sense is you buy Uber on the back of that. It was down today as well. You look at the lift quarter. I mean, I get the guidance scaring people they're selling off the stock. The quarter is pretty good. Tim just said it. Not only that, I mean, margins better, probably the best margins they've ever seen in terms of 7.3 percent. Free cash flow came in$100 million-ish more than the street was looking for. This is actually a really good quarter. If you think they're sandbagging, then I think you buy this stock here. And I think they're sandbagging.

18:56All right, down 9 % plus at this moment. Coming up more after hours, ActionShares, the Supermicro, on the move after its latest results. In an update on its delayed annual report, what they are saying about a potential Nasdaq delisting. That is next. Plus, an overseas tech team outbap will reportedly picking an AI partner to bring its tech to China. How that move could impact market share in that region and what it means for the China trade ahead. Do not go anywhere. Fast Money is back in two. Welcome back to Fast Money. shares of Supermicro higher by 10 % after the server maker announced preliminary Q2 expectations and full year guidance.

19:30CNBC's Christina Parts Nevelis has got all the details. Christina. Yeah, well, Supermicro's racing against the clock right now to avoid a Nasdaq delisting. The AI server maker promising again today in that business update they'll file their delayed annual report and outstanding quarterly reports by the deadline February 25th. This all started when an activist investor raised some serious questions about their accounting, which led to their auditor, Ernst & Young cutting ties, which is some pretty messy stuff. You're seeing the timeline on your screen. But here's the interesting part. Supermicro telling investors after the bell today that they won't need to revise any past financial statements.

20:02While their latest earnings might have missed the marks. Yes, they did lower their full year 2025 outlook in their business update. But the company is playing the long game. Their CEO is particularly excited about their liquid cooling technology for data centers. Boldly predicting they'll hit$40 billion in revenue by 2026. Plus, they're beefing up their war chest with an extra$700 million in capital. That's what this could mean for NVIDIA. It maybe raises some concerns about the production of NVIDIA server racks and Supermicro builds them for NVIDIA. But shares are definitely not reacting right now.

20:35The business update, though, is Supermicro's way of saying, we've had some bumps, but we're still in this race. So far, investors agree shares are up 11%. Let's see if that momentum continues ahead of that February 2025 deadline and the earnings call, which is underway right now. So, Christina, I'm not sure if they said this explicitly, but they don't have to restate any results because of the findings by the committee that they appointed, which is a single person. Exactly. It's all just like that they had in December, the independent investigation that found no misdoings. And so today they are reassuring investors again that they do not have to restate anything, even if there is just one auditor right now.

21:17So it's going to be no changes. Okay. Christina, thank you. Christina Parts Nevelis, their independent investigation was an independent board member. It was a single board member who managed to go through months and months of financial results in a very short amount of time. But here we are up 11 percent, Guy. What do you make of this whole thing? People are betting that they're going to get it in by the February 25th deadline. Now, by the way, this was due in August of last year, just full disclosure. And the quarter wasn't particularly good. and Christina mentioned$40 billion of revenue in 2026.

21:49I mean, that basically is the same revenue trajectory that they've been on. So they're not telling you really anything, I don't think, different. It all comes down to if you think they're going to file, the stock can probably, as I said last night, you can actually get it up to$70 and then we'll have a conversation. But I don't think you play it out of the way right now. Yeah, it's interesting. When you look at their suppliers, NVIDIA, Broadcom, AMD, Intel, I mean, the list goes micro on, the list goes on and on. It's kind of an important company in the ecosystem. We know it's kind of a two-horse race between them and Dell.

22:17We know that Dell has twice the gross margin. So that was one of the issues, I think, that was kind of hurting this company. I don't remember exactly what some of the allegations were. I bet it gets sorted out. And the other thing I'll just say is that, you know, you see a stock like this. It was up 10%. It was down 10%. You know, meme stocks are having their day. We talked about it. Look at Upstart in the aftermarket today. You know, yesterday was a firm in Carvana. So, you know, again, this is one where I'm sure the short interest is, you know, pretty high. And this thing is down a lot. Internal controls was what the auditor that resigned flagged.