WEBVTT - Dan Ives on Tesla/Apple (Radio)

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<v Speaker 1>Well, we had a big slump in big cap tech today.

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<v Speaker 1>Two stories here, one Apple, the second is Tesla. Let's

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<v Speaker 1>take a closer look now with Dan Ives, Managing director

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<v Speaker 1>also senior equity analysts at wed Bush Securities. Joining from

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<v Speaker 1>here in New York City. Dan always a pleasure. So

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<v Speaker 1>we got two topics, and I want to begin with

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<v Speaker 1>the Apple story because we were told that the company

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<v Speaker 1>has essentially told suppliers in asition to make fewer components

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<v Speaker 1>on some products because of weaker demand. How do you

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<v Speaker 1>read this? What is it really saying about what Apple

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<v Speaker 1>is up to these days? Yeah, I mean, look, I

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<v Speaker 1>think Apple is seeing storm clouds form and I think

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<v Speaker 1>it's what we're seeing across big tech, and ultimately they're

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<v Speaker 1>now starting to sort of pull back some of those

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<v Speaker 1>orders to as of suppliers. I think it is more

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<v Speaker 1>around an iPad, Mac and some of the other hardware.

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<v Speaker 1>But I think queerly Cupertino and Cooker a little nervous

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<v Speaker 1>come into the next year and they don't want inventory issues. Ironically,

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<v Speaker 1>this supply chain issues have really hurt them on iPhone,

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<v Speaker 1>especially in this past holiday quarter. So let's dig a

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<v Speaker 1>little deeper into that. I mean, is the risk they

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<v Speaker 1>see as simple as, oh, there's going to be a recession.

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<v Speaker 1>We're going to see it in the US and Europe,

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<v Speaker 1>and uh, you know, China looks like it may be

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<v Speaker 1>bouncing back, but it's struggling here at the beginning. Or

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<v Speaker 1>is it more long run like, uh, you know, maybe

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<v Speaker 1>demand is shifting. Is we're finally going to see an

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<v Speaker 1>era where people do not have to buy new Apple

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<v Speaker 1>gadgets every time they come out. Yeah, I do think

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<v Speaker 1>it's more near term. I think Apple is preparing for

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<v Speaker 1>a recession. I mean at the end of the day,

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<v Speaker 1>and that's we're seeing that across big tech, whether it's

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<v Speaker 1>a Microsoft, you look at Google, you look at Amazon

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<v Speaker 1>and others. I do think for Apple they're in a

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<v Speaker 1>what I'll call more position of strength because demand is

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<v Speaker 1>much more resilient than really any other big tech player

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<v Speaker 1>out there. So demand continues to outstrip supply, at least

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<v Speaker 1>right now on iPhones. But they don't want to be

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<v Speaker 1>lead to the game. The last thing they could do

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<v Speaker 1>is cut too late, and that's what they're doing. They're

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<v Speaker 1>trying to get ahead of it going into what clearly

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<v Speaker 1>is a very uncertain two thousand twenty three an Apple

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<v Speaker 1>is ready to from navigate this category five storm. So

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<v Speaker 1>the stock down three point seven percent here in New

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<v Speaker 1>York market value breaking below two trillion. Let's talk Tesla next, Danny,

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<v Speaker 1>because the company, we were talking about this in the

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<v Speaker 1>program last night, delivering fewer vehicles than expected in a

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<v Speaker 1>Q four despite offering some big incentives not only here

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<v Speaker 1>in the States, but I think that incentive program is

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<v Speaker 1>not is now rolling out in China as well. What's

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<v Speaker 1>the story on Tesla here? Well, I think the story

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<v Speaker 1>for Tesla is after a Cinderella ride where they really

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<v Speaker 1>were the only game in town in terms of electric vehicle,

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<v Speaker 1>you're seeing demands off and the specifically in China. China

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<v Speaker 1>is the hearts and lungs of the Tesla growth story,

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<v Speaker 1>and I think that's really what hurt them this quarter.

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<v Speaker 1>And now competitions coming from all angles. You have a

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<v Speaker 1>macro slowing and that I think really for the first time.

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<v Speaker 1>You know, you are starting to see Musk needing to

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<v Speaker 1>navigate Tessa through a storm with their back against the wall.

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<v Speaker 1>Ironically to Twitter fiasco, you know that continues to really

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<v Speaker 1>be you know, what I'll call it is a black

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<v Speaker 1>eye from Musk and Tessa, and that's been overhim in

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<v Speaker 1>the stock You just have to ask us elon Musk,

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<v Speaker 1>is he doing the right thing by first of all

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<v Speaker 1>saying hey, should I step down the CEO? Uh? And

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<v Speaker 1>and now saying he's actively seeking one and what who

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<v Speaker 1>should he get? What kind of person? Well, I think

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<v Speaker 1>first of all, this has to happen sooner rather than later,

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<v Speaker 1>and they can just be a figurehead. Yes, person. You know,

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<v Speaker 1>there's clearly a top tier list from Sandberg as well

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<v Speaker 1>as others that with the would i'll call Facebook, Google lineage,

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<v Speaker 1>But who knows if he gets that individual? And I

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<v Speaker 1>think from Musk he needs to separate himself because ever

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<v Speaker 1>since he bought Twitter, it's been a fiasco, a train

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<v Speaker 1>wreck at the same time that Tesla is going through

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<v Speaker 1>demand challenges, and right now Tesla needs a leader, not

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<v Speaker 1>one that has three children. Were ultimately in the eyes

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<v Speaker 1>of the street, is spending a lot more time with

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<v Speaker 1>Twitter than Tesla. Dan very quickly about thirty seconds. Is

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<v Speaker 1>there a lot more risk of further downside and Tesla stock.

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<v Speaker 1>Let's put the Musk selling aside just on the basis

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<v Speaker 1>of what's happening fundamentally with the company. Look I think

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<v Speaker 1>it's gotten oversold, and ultimately, if they ripped the band,

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<v Speaker 1>they'd off give conservative two thousand, twenty three numbers and

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<v Speaker 1>must stops using Tesla's personal ATM machine. Then I believe

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<v Speaker 1>Tesla's bottomed out here. I think that that and ultimately

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<v Speaker 1>must start the fire. He the only one that can

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<v Speaker 1>extinguish talk about a fire. Today shares we're down twelve percent, Dan,

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<v Speaker 1>thanks for being with us, said Dan. I'ves managing director

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<v Speaker 1>equity analyst ed wed Bush Securities, joining us here on

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<v Speaker 1>daybreak Asia