1 00:00:00,040 --> 00:00:03,920 Speaker 1: We're joined by Dan Ives, managing director and senior equity 2 00:00:04,000 --> 00:00:07,760 Speaker 1: analyst of wed Bush Securities, Dancy to talk about Tyler, 3 00:00:07,800 --> 00:00:12,000 Speaker 1: among other things, missing a delivery forecasts and the third quarter. 4 00:00:12,280 --> 00:00:17,079 Speaker 1: Dan um ms shure three forty three thousand cars got 5 00:00:17,079 --> 00:00:20,160 Speaker 1: delivered in the quarter. But that's still a record. So 6 00:00:20,200 --> 00:00:22,160 Speaker 1: what's the more important number here? Is the cup half 7 00:00:22,160 --> 00:00:24,880 Speaker 1: full or is the cup half empty? Yeah? I think 8 00:00:24,880 --> 00:00:27,480 Speaker 1: it's gonna be half empty in terms of the reaction 9 00:00:27,640 --> 00:00:30,319 Speaker 1: because it's a miss. It's about five percent miss on 10 00:00:30,400 --> 00:00:34,920 Speaker 1: deliveries relative to what the street was expecting, and clearly 11 00:00:34,920 --> 00:00:38,440 Speaker 1: logistical issues put into it, especially I think in China, 12 00:00:39,000 --> 00:00:41,960 Speaker 1: but especially in this white knocko environment. I mean, I 13 00:00:42,000 --> 00:00:45,600 Speaker 1: think the stock will be under pressure as investors worry 14 00:00:45,680 --> 00:00:50,360 Speaker 1: that the demand story is starting to wean a bit. Okay, 15 00:00:50,360 --> 00:00:53,400 Speaker 1: so tell us about that demand story. You know Tayler 16 00:00:53,479 --> 00:00:56,600 Speaker 1: still makes an enormously popular range of vehicles. Well, why 17 00:00:56,640 --> 00:01:00,279 Speaker 1: do you see demand easing off? Well, on the enterin 18 00:01:00,480 --> 00:01:03,640 Speaker 1: we think demand continues to be robust, and I believe 19 00:01:03,720 --> 00:01:07,160 Speaker 1: this is more of a speed bump and logistical issue 20 00:01:07,600 --> 00:01:10,319 Speaker 1: in terms of delivering cars to customers at the end 21 00:01:10,319 --> 00:01:15,119 Speaker 1: of the quarters, rather than ultimately a demand really starting 22 00:01:15,160 --> 00:01:18,520 Speaker 1: to come off. But I do think what Tesla is 23 00:01:18,600 --> 00:01:21,280 Speaker 1: facing on a lot of automakers are facing, is that 24 00:01:21,680 --> 00:01:26,040 Speaker 1: the supply chain continues to be extremely complex. And Tessa 25 00:01:26,160 --> 00:01:30,120 Speaker 1: demand his outstrip supply, but ultimately, for the Wall Street, 26 00:01:30,600 --> 00:01:33,479 Speaker 1: it's about the numbers. And if you look at this quarter, 27 00:01:33,920 --> 00:01:36,760 Speaker 1: there's no way of sure coaded. It was softer, and 28 00:01:36,800 --> 00:01:39,640 Speaker 1: I think that's something in this market that that the 29 00:01:39,720 --> 00:01:42,520 Speaker 1: bulls didn't I qually didn't want to say, yeah, let's 30 00:01:42,520 --> 00:01:45,080 Speaker 1: look at that supply chain issue a bit more tastes 31 00:01:45,120 --> 00:01:49,640 Speaker 1: like calling it a transportation capacity issues. So getting physically 32 00:01:49,680 --> 00:01:53,080 Speaker 1: the cars to the customers, is that the whole problem 33 00:01:53,200 --> 00:01:55,640 Speaker 1: or is just part of it? How many undelivered cars 34 00:01:55,640 --> 00:01:57,880 Speaker 1: are sitting around on the testa lotton and how many 35 00:01:57,880 --> 00:02:02,000 Speaker 1: are waiting for Patsy We think of fifteen twenty thousand 36 00:02:02,400 --> 00:02:05,240 Speaker 1: roughly in terms of what i'll call either in transit 37 00:02:06,040 --> 00:02:09,560 Speaker 1: or ones that you know ultimately not been delivered to customers. 38 00:02:09,639 --> 00:02:14,160 Speaker 1: It's a problem because it's also the expense. If you 39 00:02:14,200 --> 00:02:17,040 Speaker 1: look in Europe as well as what we've seen in China, 40 00:02:17,880 --> 00:02:22,560 Speaker 1: the expenses to get customers actual cars in their hands 41 00:02:22,600 --> 00:02:27,000 Speaker 1: have been astronomical and I think Tesla has started to 42 00:02:27,040 --> 00:02:31,360 Speaker 1: balance that and basically be fined with ultimate deliveries that 43 00:02:31,360 --> 00:02:34,079 Speaker 1: could push quarter a quarter and that's what happened this quarter. 44 00:02:34,160 --> 00:02:37,840 Speaker 1: And you know, it's something where it puts more pressure 45 00:02:37,880 --> 00:02:41,040 Speaker 1: on the fourth quarter for Tesla because that's really gonna be, 46 00:02:41,840 --> 00:02:44,359 Speaker 1: you know, the big quarter for them in terms of 47 00:02:44,520 --> 00:02:48,280 Speaker 1: from a delivery perspective. So what's your outlook for the stock. 48 00:02:48,320 --> 00:02:52,120 Speaker 1: It's still quite expensive, but broadly flat on years. That's 49 00:02:52,120 --> 00:02:55,000 Speaker 1: a buy right now. Yeah, we view it as a buy. 50 00:02:55,080 --> 00:02:57,760 Speaker 1: I mean, we view this as just the narrow speed 51 00:02:57,800 --> 00:03:01,840 Speaker 1: bump on the broader long term thesis to to where 52 00:03:01,919 --> 00:03:05,480 Speaker 1: ultimately Tessa is gonna go. And to us, it's really 53 00:03:06,160 --> 00:03:08,880 Speaker 1: this is something that I think we'll get over exaggerated 54 00:03:09,560 --> 00:03:12,280 Speaker 1: in terms of the market, but in our opinion that 55 00:03:12,440 --> 00:03:14,760 Speaker 1: this is more of a buying opportunity rather than time 56 00:03:14,800 --> 00:03:18,160 Speaker 1: to throw in the towel. Yeah. Well, Tasla had one 57 00:03:18,200 --> 00:03:21,160 Speaker 1: of its most cluss closely watched events over the past 58 00:03:21,160 --> 00:03:24,000 Speaker 1: few days AI Day. What was some of your takeaways 59 00:03:24,000 --> 00:03:28,600 Speaker 1: from that? Yeah, so that was really more about robotics 60 00:03:28,680 --> 00:03:32,519 Speaker 1: and ultimately what I've used for the next generation of 61 00:03:32,840 --> 00:03:36,920 Speaker 1: Tessa products as well as FSD full self driving. I mean, 62 00:03:36,920 --> 00:03:39,240 Speaker 1: I think what Musk and Tests are trying to show 63 00:03:39,800 --> 00:03:42,800 Speaker 1: is that this is really the start of not just 64 00:03:42,920 --> 00:03:45,960 Speaker 1: the car company, a much more broader technology company. And 65 00:03:45,960 --> 00:03:49,080 Speaker 1: that was really the focus of AI day, really showing 66 00:03:49,160 --> 00:03:52,240 Speaker 1: this is more about the test of story when you 67 00:03:52,400 --> 00:03:55,560 Speaker 1: look past the next three to six months. That's what 68 00:03:55,680 --> 00:03:58,040 Speaker 1: was really the importance of it. Yeah, we got a 69 00:03:58,080 --> 00:04:00,720 Speaker 1: closer look at that Optimus robot. Of course this time 70 00:04:00,720 --> 00:04:02,680 Speaker 1: I wasn't a human in a suit. It was the 71 00:04:02,720 --> 00:04:06,360 Speaker 1: real thing, and it walked out, it waived. What were 72 00:04:06,400 --> 00:04:09,160 Speaker 1: your impressions of that? Because Elon Musk has previously said 73 00:04:09,200 --> 00:04:12,600 Speaker 1: this is going to be a bigger product than the cars. Yeah, 74 00:04:12,600 --> 00:04:15,040 Speaker 1: I think three to five years, it's a huge product. 75 00:04:15,080 --> 00:04:17,200 Speaker 1: And I think it really talks about just the AI 76 00:04:17,279 --> 00:04:20,920 Speaker 1: the technology that's ultimately happening in Tesla, and I think 77 00:04:20,960 --> 00:04:23,760 Speaker 1: that's important in terms of where this is all going 78 00:04:24,000 --> 00:04:27,720 Speaker 1: for Tesla, showing it's more than just a car company. 79 00:04:27,760 --> 00:04:30,680 Speaker 1: And I think if you're at four GM and others 80 00:04:30,720 --> 00:04:34,320 Speaker 1: you're watching that presentation, I think it's jaw dropping in 81 00:04:34,440 --> 00:04:36,560 Speaker 1: terms of the technology they're coming out with. And that's 82 00:04:36,600 --> 00:04:39,320 Speaker 1: why even when you think about deliveries. I think it's 83 00:04:39,320 --> 00:04:41,880 Speaker 1: just the ultimately just the start of what I view 84 00:04:41,960 --> 00:04:45,279 Speaker 1: is just a broader trend for testing. I want to 85 00:04:45,279 --> 00:04:48,520 Speaker 1: talk a little bit about Apple as well, and of 86 00:04:48,560 --> 00:04:50,960 Speaker 1: course you know we had a story out on Bloomberg 87 00:04:51,200 --> 00:04:55,240 Speaker 1: a few days ago also about the iPhone fourteen, Apple 88 00:04:55,360 --> 00:04:59,480 Speaker 1: choosing to maintain production rather than increase it as expected. 89 00:04:59,600 --> 00:05:03,880 Speaker 1: As this any calls for consent from your point of view. Look, 90 00:05:03,960 --> 00:05:07,680 Speaker 1: I think they're clearly seeing softness in the base model, 91 00:05:07,920 --> 00:05:09,720 Speaker 1: but I do believe they're seeing strength in the Pro 92 00:05:09,839 --> 00:05:13,440 Speaker 1: model that's been much stronger than expected. And I still 93 00:05:13,520 --> 00:05:16,680 Speaker 1: think this is one that demand going into holidays is 94 00:05:16,720 --> 00:05:20,679 Speaker 1: going to be strong. But it's a cautionary sign that 95 00:05:20,960 --> 00:05:24,440 Speaker 1: Apple is seeing, and we're seeing across the world that 96 00:05:24,520 --> 00:05:28,880 Speaker 1: demands in some areas, you're gonna start to see some softness, 97 00:05:28,960 --> 00:05:31,400 Speaker 1: and I think it Apple, You've seen that, but it's 98 00:05:31,440 --> 00:05:34,960 Speaker 1: also been neutralized by strength that you're seeing on the 99 00:05:35,040 --> 00:05:39,520 Speaker 1: higher end Pro model. Yeah, the that to what degree 100 00:05:39,560 --> 00:05:43,760 Speaker 1: does that surprise you or is a resilient consumer something 101 00:05:43,800 --> 00:05:46,599 Speaker 1: that we can take for grounded? Now? Well, Look, I 102 00:05:46,640 --> 00:05:49,559 Speaker 1: think Apple is unique because of the golden install basin, 103 00:05:49,640 --> 00:05:52,120 Speaker 1: because of the upgrade cycle, and I think that's something 104 00:05:52,200 --> 00:05:55,200 Speaker 1: where they continue to be what I'll use almost rocket 105 00:05:55,240 --> 00:05:58,840 Speaker 1: gibralder demand despite some of the black clouds are seeing 106 00:05:58,839 --> 00:06:02,960 Speaker 1: in the macro. Yeah, we're also running a story today 107 00:06:03,120 --> 00:06:09,720 Speaker 1: on Bloomberg about the difficulties and diversifying manufacturing away from China. 108 00:06:09,800 --> 00:06:11,440 Speaker 1: We're going to be talking about that a little bit 109 00:06:11,480 --> 00:06:14,400 Speaker 1: in the next hour as well. But in terms of 110 00:06:14,560 --> 00:06:19,400 Speaker 1: Apple's manufacturing base, do you see them increasingly moving away 111 00:06:19,600 --> 00:06:23,760 Speaker 1: from China, towards India, towards other jurisdictions. Well, I think 112 00:06:23,880 --> 00:06:27,680 Speaker 1: slowly they'll diversify, but that's easier said than done. And 113 00:06:27,720 --> 00:06:29,960 Speaker 1: I think China continues to be a mean stay for 114 00:06:30,000 --> 00:06:33,159 Speaker 1: Apple and and that's something that will take years to 115 00:06:33,240 --> 00:06:36,440 Speaker 1: ultimately diversify. But I think they're starting to do that 116 00:06:36,560 --> 00:06:39,640 Speaker 1: given some of the writing on the wall. And how 117 00:06:39,680 --> 00:06:42,680 Speaker 1: about the supply chain issues for Apple, do you see 118 00:06:42,720 --> 00:06:47,600 Speaker 1: these coming to an end? I think they're starting to moderate, 119 00:06:47,760 --> 00:06:50,280 Speaker 1: but into the mid two thousand twenty three it's still 120 00:06:50,279 --> 00:06:52,560 Speaker 1: going to be an issue, but we are starting to 121 00:06:52,560 --> 00:06:55,640 Speaker 1: see that modering. They be They're able to navigate supply 122 00:06:55,760 --> 00:06:58,320 Speaker 1: chain better than any other technology player in the world, 123 00:06:58,760 --> 00:07:02,719 Speaker 1: and it's showing. Yeah, we talked a second ago about Tesla, 124 00:07:02,800 --> 00:07:06,960 Speaker 1: how it's still expensive. Of course, Apple a famously expensive 125 00:07:06,960 --> 00:07:09,840 Speaker 1: stock as well, but also coming off the boiler a 126 00:07:09,840 --> 00:07:12,160 Speaker 1: little at last trade of one thirty twenty. Do you 127 00:07:12,200 --> 00:07:15,880 Speaker 1: buy at this level? We would be buyers of Apple here. 128 00:07:15,960 --> 00:07:18,480 Speaker 1: I think that's been oversold. I still think the demand 129 00:07:18,600 --> 00:07:22,080 Speaker 1: stories holding, and to me in technology, there's no better 130 00:07:22,280 --> 00:07:24,200 Speaker 1: mean that I want to be buying on this weakness 131 00:07:24,280 --> 00:07:28,000 Speaker 1: and Apple all right, then, I've always great to have 132 00:07:28,040 --> 00:07:30,680 Speaker 1: you on the show and to get your expertise and 133 00:07:30,760 --> 00:07:34,560 Speaker 1: your analysis. Dan Ives is managing director and senior equity 134 00:07:34,600 --> 00:07:36,600 Speaker 1: analyst at wet Bush Securities.