Speaker 1: We're joined by Dan Ives, managing director and senior equity
Speaker 1: analyst of wed Bush Securities, Dancy to talk about Tyler,
Speaker 1: among other things, missing a delivery forecasts and the third quarter.
Speaker 1: Dan um ms shure three forty three thousand cars got
Speaker 1: delivered in the quarter. But that's still a record. So
Speaker 1: what's the more important number here? Is the cup half
Speaker 1: full or is the cup half empty? Yeah? I think
Speaker 1: it's gonna be half empty in terms of the reaction
Speaker 1: because it's a miss. It's about five percent miss on
Speaker 1: deliveries relative to what the street was expecting, and clearly
Speaker 1: logistical issues put into it, especially I think in China,
Speaker 1: but especially in this white knocko environment. I mean, I
Speaker 1: think the stock will be under pressure as investors worry
Speaker 1: that the demand story is starting to wean a bit. Okay,
Speaker 1: so tell us about that demand story. You know Tayler
Speaker 1: still makes an enormously popular range of vehicles. Well, why
Speaker 1: do you see demand easing off? Well, on the enterin
Speaker 1: we think demand continues to be robust, and I believe
Speaker 1: this is more of a speed bump and logistical issue
Speaker 1: in terms of delivering cars to customers at the end
Speaker 1: of the quarters, rather than ultimately a demand really starting
Speaker 1: to come off. But I do think what Tesla is
Speaker 1: facing on a lot of automakers are facing, is that
Speaker 1: the supply chain continues to be extremely complex. And Tessa
Speaker 1: demand his outstrip supply, but ultimately, for the Wall Street,
Speaker 1: it's about the numbers. And if you look at this quarter,
Speaker 1: there's no way of sure coaded. It was softer, and
Speaker 1: I think that's something in this market that that the
Speaker 1: bulls didn't I qually didn't want to say, yeah, let's
Speaker 1: look at that supply chain issue a bit more tastes
Speaker 1: like calling it a transportation capacity issues. So getting physically
Speaker 1: the cars to the customers, is that the whole problem
Speaker 1: or is just part of it? How many undelivered cars
Speaker 1: are sitting around on the testa lotton and how many
Speaker 1: are waiting for Patsy We think of fifteen twenty thousand
Speaker 1: roughly in terms of what i'll call either in transit
Speaker 1: or ones that you know ultimately not been delivered to customers.
Speaker 1: It's a problem because it's also the expense. If you
Speaker 1: look in Europe as well as what we've seen in China,
Speaker 1: the expenses to get customers actual cars in their hands
Speaker 1: have been astronomical and I think Tesla has started to
Speaker 1: balance that and basically be fined with ultimate deliveries that
Speaker 1: could push quarter a quarter and that's what happened this quarter.
Speaker 1: And you know, it's something where it puts more pressure
Speaker 1: on the fourth quarter for Tesla because that's really gonna be,
Speaker 1: you know, the big quarter for them in terms of
Speaker 1: from a delivery perspective. So what's your outlook for the stock.
Speaker 1: It's still quite expensive, but broadly flat on years. That's
Speaker 1: a buy right now. Yeah, we view it as a buy.
Speaker 1: I mean, we view this as just the narrow speed
Speaker 1: bump on the broader long term thesis to to where
Speaker 1: ultimately Tessa is gonna go. And to us, it's really
Speaker 1: this is something that I think we'll get over exaggerated
Speaker 1: in terms of the market, but in our opinion that
Speaker 1: this is more of a buying opportunity rather than time
Speaker 1: to throw in the towel. Yeah. Well, Tasla had one
Speaker 1: of its most cluss closely watched events over the past
Speaker 1: few days AI Day. What was some of your takeaways
Speaker 1: from that? Yeah, so that was really more about robotics
Speaker 1: and ultimately what I've used for the next generation of
Speaker 1: Tessa products as well as FSD full self driving. I mean,
Speaker 1: I think what Musk and Tests are trying to show
Speaker 1: is that this is really the start of not just
Speaker 1: the car company, a much more broader technology company. And
Speaker 1: that was really the focus of AI day, really showing
Speaker 1: this is more about the test of story when you
Speaker 1: look past the next three to six months. That's what
Speaker 1: was really the importance of it. Yeah, we got a
Speaker 1: closer look at that Optimus robot. Of course this time
Speaker 1: I wasn't a human in a suit. It was the
Speaker 1: real thing, and it walked out, it waived. What were
Speaker 1: your impressions of that? Because Elon Musk has previously said
Speaker 1: this is going to be a bigger product than the cars. Yeah,
Speaker 1: I think three to five years, it's a huge product.
Speaker 1: And I think it really talks about just the AI
Speaker 1: the technology that's ultimately happening in Tesla, and I think
Speaker 1: that's important in terms of where this is all going
Speaker 1: for Tesla, showing it's more than just a car company.
Speaker 1: And I think if you're at four GM and others
Speaker 1: you're watching that presentation, I think it's jaw dropping in
Speaker 1: terms of the technology they're coming out with. And that's
Speaker 1: why even when you think about deliveries. I think it's
Speaker 1: just the ultimately just the start of what I view
Speaker 1: is just a broader trend for testing. I want to
Speaker 1: talk a little bit about Apple as well, and of
Speaker 1: course you know we had a story out on Bloomberg
Speaker 1: a few days ago also about the iPhone fourteen, Apple
Speaker 1: choosing to maintain production rather than increase it as expected.
Speaker 1: As this any calls for consent from your point of view. Look,
Speaker 1: I think they're clearly seeing softness in the base model,
Speaker 1: but I do believe they're seeing strength in the Pro
Speaker 1: model that's been much stronger than expected. And I still
Speaker 1: think this is one that demand going into holidays is
Speaker 1: going to be strong. But it's a cautionary sign that
Speaker 1: Apple is seeing, and we're seeing across the world that
Speaker 1: demands in some areas, you're gonna start to see some softness,
Speaker 1: and I think it Apple, You've seen that, but it's
Speaker 1: also been neutralized by strength that you're seeing on the
Speaker 1: higher end Pro model. Yeah, the that to what degree
Speaker 1: does that surprise you or is a resilient consumer something
Speaker 1: that we can take for grounded? Now? Well, Look, I
Speaker 1: think Apple is unique because of the golden install basin,
Speaker 1: because of the upgrade cycle, and I think that's something
Speaker 1: where they continue to be what I'll use almost rocket
Speaker 1: gibralder demand despite some of the black clouds are seeing
Speaker 1: in the macro. Yeah, we're also running a story today
Speaker 1: on Bloomberg about the difficulties and diversifying manufacturing away from China.
Speaker 1: We're going to be talking about that a little bit
Speaker 1: in the next hour as well. But in terms of
Speaker 1: Apple's manufacturing base, do you see them increasingly moving away
Speaker 1: from China, towards India, towards other jurisdictions. Well, I think
Speaker 1: slowly they'll diversify, but that's easier said than done. And
Speaker 1: I think China continues to be a mean stay for
Speaker 1: Apple and and that's something that will take years to
Speaker 1: ultimately diversify. But I think they're starting to do that
Speaker 1: given some of the writing on the wall. And how
Speaker 1: about the supply chain issues for Apple, do you see
Speaker 1: these coming to an end? I think they're starting to moderate,
Speaker 1: but into the mid two thousand twenty three it's still
Speaker 1: going to be an issue, but we are starting to
Speaker 1: see that modering. They be They're able to navigate supply
Speaker 1: chain better than any other technology player in the world,
Speaker 1: and it's showing. Yeah, we talked a second ago about Tesla,
Speaker 1: how it's still expensive. Of course, Apple a famously expensive
Speaker 1: stock as well, but also coming off the boiler a
Speaker 1: little at last trade of one thirty twenty. Do you
Speaker 1: buy at this level? We would be buyers of Apple here.
Speaker 1: I think that's been oversold. I still think the demand
Speaker 1: stories holding, and to me in technology, there's no better
Speaker 1: mean that I want to be buying on this weakness
Speaker 1: and Apple all right, then, I've always great to have
Speaker 1: you on the show and to get your expertise and
Speaker 1: your analysis. Dan Ives is managing director and senior equity
Speaker 1: analyst at wet Bush Securities.