🏁 Tesla disappoints while rival’s truck delights
Hey Snackers,
The arc of history is long, but it bends toward US bank CEOs trying their darnedest to convince everyone they actually represent tech companies. On Monday’s earnings call, the CEO of the regional bank Zions asked ChatGPT for an economic outlook, and it gave this limerick, which begins:
“Trump’s tariffs have caused quite a fuss,
With markets unsure who to trust.”
Alas, Wall Street wasn’t wowed, but in our view, the poem wasn’t the reason.
US stocks bounced back from Monday’s drubbing, reaching their highs of the day on Tuesday after headlines broke from a closed-door event with investors and Treasury Secretary Scott Bessent. In that meeting, he expressed optimism on making progress toward a trade deal with China, deeming the status quo untenable for long.
The S&P 500 gained 2.5%, the Nasdaq 100 rose 2.6%, and the Russell 2000 advanced 2.7% yesterday. A whopping 494 members of the S&P 500 gained on the day, tying the highest number this year.
Tesla meets Edison
Yesterday was a massive day for the American electric car industry, with Tesla earnings and a surprise reveal from a new rival to the vaunted EV brand.
First up, those Tesla earnings. The company missed expectations on adjusted earnings per share (came in at $0.27, below the expected $0.43) as well as revenue ($19.34 billion, well under the $21.37 billion analysts anticipated).
But the case for Tesla has never really been based on something so financially prosaic as “revenue,” nor has the company’s valuation ever been so gauche as “the net present value of future cash flows.” The details do get a bit gory:
Last quarter’s promise of a “return to growth in 2025” doesn’t appear to be in contention, as the announcement no longer mentions that return to growth.
Set aside the regulatory credits the company reaps as well as its interest income, and the company generated a pre-tax loss of about $200 million in Q1.
The company said its plans for its robotaxi launch and less expensive vehicles remain on track, but alas, no more information about that.
That said, again, this company does not trade on these numbers. Are they useful for understanding the state and health of Tesla’s business? Absolutely. Do they paint a picture of a company that is getting smaller and not capitalizing on opportunities as competitors nevertheless advance? They might! But does that have anything to do with what the share price of Tesla will be tomorrow?
Who knows — there’s a first time for everything.
If anything, the reveal yesterday of a Jeff Bezos-funded automaker that’s been operating in stealth mode may present a serious riposte to Tesla’s business. The reason?
Six words: twenty-five-thousand-dollar electric truck. With Cybertruck sales in decline and no cheap Model Y on the horizon, the reveal of the (reportedly transformable!) Slate SUV on the very day Tesla announces earnings can only be construed as a shot across the bow, with its product seemingly tailored to hit Tesla in two of its more vulnerable places.
The Takeaway
Nothing is assured, to be clear. But let’s just observe that Tesla getting beaten by a ruthless competing innovator despite personally propelling technology well forward has precedent; just ask Thomas Edison.
This company wants to take biotech innovation out of Big Pharma’s pocket
Big Pharma has failed to develop a disease-modifying therapy for osteoarthritis (DMOAD). It’s an oversight that’s burdened patients with temporary, inefficient treatments and left 365M+ people suffering with knee OA pain globally.
Cytonics believes that this is unacceptable, and has developed a novel approach to overcome pharma’s deficiencies in the standard of care.
By tweaking the genetic code of a naturally occurring blood protein, Cytonics has developed a genetically engineered variant named CYT-108, which could become the first disease-modifying therapy for osteoarthritis.
And they’re doing it without any assistance from Big Pharma or Venture Capital. Cytonics has taken exactly $0.00 from Silicon Valley behemoths, and their current round is open to investors.
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Chipotle “Mexican Grill” is opening for the first time… in Mexico
Though it’s opened more than 90 international units since 2008, including 58 locations in Canada and 20 in the UK, Chipotle has never expanded to the native land of many of its dishes. Now, though, it’s finally opening a Mexican outpost — and this could be the perfect time.
As prices of produce imported from Mexico are expected to rise on President Trump’s 25% tariffs, Chipotle has been on a mission to find avocados from alternate sources. Opening restaurants in its primary supplying country not only keeps menu prices low in stores in that region, but could also help hedge against higher costs domestically by staying close to the source. It also won’t have to play around with portion sizes, something customers hate, as Chipotle learned the hard way.
That said, another Mexican fast-food chain serves as a cautionary tale: Taco Bell. While the chain’s slogan was once “Make a run for the border,” when it actually crossed the southern border, it failed not once, but twice to survive in Mexico. As of today, while there are 8,757 Taco Bells across the globe, there is not a single one in the country that inspired its food. That said, the brand is doing just fine, as our chart on its growth shows.
The Takeaway
Chipotle reports earnings after the bell today, and analysts are expecting slower revenue and earnings growth from the chain as consumers worried about a recession dine out less. Last quarter, it cut 2025 guidance, as the burrito chain just isn’t growing like it used to.
The Best Thing We Read Today
Can AI save Pinterest or has it already irreparably damaged it?
Pinterest wants to cash in on the AI boom and allow AI companies to ingest its vast library of user-generated content, but those pins of nail art, wedding inspo, and recipes are already filled with AI images.
Yesterday's Big Daily Movers
Northrop Grumman tanked after reporting poor Q1 earnings and axing its full-year outlook for earnings per share
CoreWeave surged after a host of Wall Street banks initiated coverage with largely bullish views on the recently IPO’d cloud-computing company
Bitcoin crossed $90,000 again, taking bitcoin-linked stocks up with it
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What Else We're Snackin'
Gold, the fear trade, has become the ultimate greed trade, driving its price to an all-time high
Amazon joined Microsoft in tapping the brakes on AI data center spending as economic jitters spread
A court ruled Dunkin’ Donuts’ upcharge for alternative milks was not discrimination against the lactose intolerant
Need a break? Enjoy these pics of the good dogs at the 2025 Corgi Derby
Snack Fact of the Day
Ripple was the second-largest donor to Trump’s Inauguration Day fund.
Wednesday's Events
March new home sales
Earnings expected from Boeing, AT&T, Philip Morris, IBM, Texas Instruments, and Chipotle
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