WWDC Disappointment: Is Apple Rotten to the Core with Gene Munster
33:50 Share

When will M&A activity pick up? Will this year mark the return of IPOs? Listen to Strategic Alternatives, a podcast from RBC Capital Markets to get insights on these questions and more. Explore the trends in market forces impacting deal flow and find out how companies' investors are shifting their strategies to drive growth and unlock value. Listen and subscribe to Strategic Alternatives today, available wherever you get your podcasts.

Guy, I'm sure you're already up to speed on all things current. Of course I am. Their app makes managing your money, saving, even building credit super easy, Dan. They have a new feature called Paycheck Advance. You can get up to $500 before payday when you switch your paycheck and qualify. Now that I didn't know. So now when you sign up and you set up direct deposit, you unlock so much more.

And it's super easy to get started. Just go to Current.com slash OK. That's O-K-A-Y. That's Current.com slash OK. Current is a financial technology company, not a bank. Banking services provided by Choice Financial Group, member FDIC, and Cross River Bank, member FDIC. Paycheck Advance is offered by Finco Advance, LLC, a financial technology company, not a bank.

Eligibility and available amounts may vary and are subject to change at any time. For full terms and conditions, visit Current.com or call 888-851-1172 for more information. Welcome to a very special edition of the Risk Reversal Podcast. Why is it special today? Well, I'm Dan Nathan. I'm joined by Danny Moses. He is the host of the On The Tape Podcast. Danny. I dropped in. I'm not even supposed to be on. I'm stuffing my face in the other room. Yeah. Well, you are saying...

You're stuffing your face with a sweet green. Yeah, sweet green. With all due respect there, big guy. I did get the highest calorie choice on the... Which was what? Sweet potatoes? Yeah, those are pretty good. All right, well, you're here. We're going to spend a few minutes on what's going on in the market. Stick around because I had Gene Munster of Deepwater Asset Management. He and I did all things...

Apple WWDC. It just got over about an hour and a half ago. Not particularly exciting. The stock and reaction is down like 1.4% in a day where the S and P is up 23 bips or so. We're right into the close. Danny, tell us who's going to be on the pod drops Wednesday morning. The on the tape podcast. If you're not following it, go smash smash it, but like it in the favorite podcast store and on the YouTube. Dennis to Bush. You're of 22 V is coming on. Uh,

Brilliant strategist slash economist. And just like when we had Mike Kantrowitz on, was trained. Kantrow. Kantrow was trained out of the same ilk of the ISI days and so forth. So very smart guy. You definitely subscribe to him too. Yeah, I think you had him on, I want to say, four or five months ago. It was a great conversation. He's a great macro strategist, so stick around for that. And that comes...

Daniel, let's talk about it really quickly. A week from Wednesday, we have the Fed meeting. We have near certainty that they're not going to do anything to rates. It's actually Blutarski. It actually went to 0.0 today. Oh, did it really? Which I find not. Blutarski. I would go long at 0.0. Obviously, that's an Animal House reference. He's not going to get it, Bill. No, look, it went.

Bill right over his head. Hasn't seen Fletcher or Animal House. And he's a comedian. 0.0. Fat, drunk, and stupid is no way to go through college. All right. So Fed meeting next week. It's a zero. Fed chair Powell's taking some heat. We had the EU or lowering interest rates. What'd they do? Eight or something like that. Every time they did that, Trump literally lost a guy. Yeah, yeah. So what do you expect the commentary to be with that?

PPI and CPI this week. We have CPI on Wednesday, PPI on Thursday. So this is a quarterly for the Fed. So you get the SEP, the Summary of Economic Projections. You get that. So they'll have to put on paper where they think things are going. I think they'll probably side on the economy slowing a little bit more. Inflation actually has come down a lot. It'll probably lend itself to the argument that they could cut rates now. But he's still going to stand by the fact that he believes that tariffs are going to have an impact that we haven't seen yet.

He might start to lose that argument the more data that we do see, to be honest with you. But what's the difference if he were to cut, which he's not cutting next week, or now it's not even a cut in July. The first cut looks like it's September. There's only two for the year.

I guess the side I'm on that is if you cut because the economy really starts to weaken, my problem with that would be it wouldn't do enough to bolster the economy to stimulate. And then you'd have the reckoning of, OK, if it really is weakening and the consumer is kind of backing off things, what does that mean to earnings? You know, it's been the driver. Now, AI continues to be amazing. We're seeing merger deals. We're seeing CapEx deals. Right. You're seeing it's real. Real money is being spent. So that continues to be.

what's driving this market entirely. And that's, I'm sure, I know you talked to Gene about it, but it's, so I guess outside of that,

On the margin, I think that we're going to go from two Fed cuts in the next kind of six weeks to, I think, at least three for the year in terms of projections. At least three. I do believe that. Okay. And I mean, if inflation is coming down and the economy is not weakening, that can do it out of a position of strength. If the economy is weakening and you see unemployment rate going up, you might also see it because that's what we had last fall or so. So it will be interesting to track what Fed fund futures look.

Let's talk a little bit about like I think that's interesting segue, by the way, is that if the AI trade didn't happen starting in early 23, we didn't get that kind of liquidity injection in and around regional banks. I mean, regional banks act really badly right now.

So if you like juxtapose that versus like say the money centers, what is the regional banks under performance telling you about the economy? Russell 2000 small caps acting very poorly relative to the major indices. Is there something to kind of take from that? - I think we've seen consumer credit on the lower end is deteriorating. It's such a small portion of the overall economy, right? The economy is bifurcated and the stock market's bifurcated.

And so on the very low end of stocks, a very low end of the consumer, it's not enough to get people off of owning the S&P at this point, but that's why. So the regional banks are facing that. Corporate defaults are growing. Not crazy, but they're growing. Where is that gonna hit the most? Probably in the regionals to the most part. I wouldn't short the regionals here because I do think there is probably an M&A wave coming, especially if there's a deterioration in loan growth.

because if the big banks are going to want to do something else where they can take a deal and make it accretive, they would potentially do that. So I think, Dan, I think that's the real economy stuff you're looking at. It goes back to the first question you asked me, why I think the Fed could end up cutting. And I want to make one comment on that.

If the Fed cuts prematurely or the perception is and the 10 year yield moves higher because they can be restock inflation. That's the danger that we're in right now. And so I think people kind of misunderstand the Fed cutting with the longer end of the curve. And I'll add one other thing, which you probably previewed already, is that there's three big bond auctions this week, Tuesday, Wednesday, Thursday, ending with the 30 year, which has been overly weak. We saw what the

the 20-year did before. So something to keep an eye on there. You know, one of the things that's just hitting here right before the close, Tesla's now up 4.5%. It had a nice little steady rise. It was basically unchanged. And earlier in the day, it was down a few percent because there was two downgrades, one from Baird, one from Argus. And a lot of it had to do with uncertainty, you know, just in the kind of spat between the president and Musk. And then robo-taxi days coming up this week. But I guess I don't know where it is, maybe on True Social, but I guess...

Trump wished Musk well. So if you think about that as removing a bit of a headwind, but I don't know about you. I don't know how you put the genie back in the bottle. You went the full Epstein, you know, all that sort of stuff. I mean, so to me, I'm just curious. You never go full Epstein. No, you never go full Epstein. I just think that's kind of a really interesting one. All right, last thing. Can I say one thing on that without going? So it's evident.

For people out there that think Tesla trades on fundamentals, it doesn't. It hasn't traded on fundamentals in a long time. This is just proof of it. So you better get that part right, the political part right on Tesla and Trump and Musk, because if not, you're sitting on a very expensive company. Well, November into December, the stock doubled based on that relationship. So it would make sense if that relationship comes unwound that you go the opposite way. But they did some deal, obviously. Let's see what happens there.

Last thing, we had Carter Braxton Worth of Worth Charting on with us today. He was talking about in a note, he was talking about just the V reversal, what things outperform to the downside as far as weakness and what has outperformed to the upside. Interesting industrials have done so to the upside, but laggards have been energy laggards.

and healthcare. He's like, the healthcare is so messy, maybe it's worth a contrarian. But talk to me about energy, because if you have industrials coming back because there's hope that you're going to have some sort of trade deal and then growth can kind of re-accelerate, shouldn't energy participate? You do have crude oil at 65, first time in a little while. Hope is a dangerous thing. I would tell you that energy to me is now a 3% weighting in the S&P 500. Historically, it's been 7%. Yeah.

So it wouldn't take a lot. And this is about as low as it has gotten. So people are equating kind of a drop in oil price, OPEC producing too much. Oh, these companies are screwed. They're not screwed. Their balance sheets have never been better. The rig count's lowest it's been since 2021. All the M&A that's gone on, no one's going to tell them to drill. There actually might be a resource problem in the U.S. in terms of what's left in the shale. Permian Basin, they're pulling back there as well. So look at these companies that are trading at anywhere from 8 to 13 times earnings per

really discounted cash flow multiples returning um you know returning money to investors in the form of dividends and buybacks exxon mobil and diamondback energy fang right are the two names that i've kind of owned peter bookfork talked about it last week so i think energy is a great place to be and unless you

are thinking we're going to a massive recession. I don't see how oil goes much lower. - Well, just purely technically, the breakdown level was $65. This is in early April, and it was trading at $73 before we had this kind of Liberation Day BS.

and it's just kind of kissing that level. The 200-day moving average is basically 69, so it looks like it wants to pop here. Any good news on the trade front, you probably have oil moving higher. Danny Moses dropping in on the Risk Reversal Podcast. Dennis DeBuscher with him on Wednesday morning on the On The Tape Podcast. Be sure to follow it. Stick around for my conversation with Gene Munster of Deepwater Asset Management. Thanks, Dan. Thanks, pal.

In today's hyper-fast markets, it's never been more important to consider every option to raise capital, drive growth, and create value. Stay one step ahead with Strategic Alternatives, a podcast from RBC Capital Markets. This season, RBC's experts examine how corporates and investors are adapting their strategies, reassessing their portfolios, and reallocating capital to navigate uncertainty and volatility in the current macro environment. Tune in to Strategic Alternatives, the RBC Capital Markets podcast today.

Hi, everyone. It's Guy. You've probably heard me mention Current before on the pod, but we can't stop talking about how easy managing all your money is with their app. It helps you grow your savings, you can build your credit, and it works for the entire family. Plus, with their new Paycheck Advance feature, you can get up to $500 before payday when you switch your payroll and qualify. No credit checks or mandatory fees required.

It's super easy to sign up. Just go to Current.com slash OK. O-K-A-Y. That's Current.com OK to get the app.

For more information.

Welcome back to the Risk Reversal Podcast. I'm Dan Nathan. Still, this is Gene Munster. He's the managing partner at Deepwater Asset Management. Gene, welcome to the pod. Hi, Dan. Welcome back to the pod. All right. So today's the day. I've been...

Following you followed WWDC for Apple, I think for 15 years, I think as long as I've known you and they just keep getting less interesting every year. Today's just got done about an hour ago. I sat through it. I was doing other stuff. It was really all about the operating system. Now, if you go back and this is a developer's conference, right? That makes perfect sense.

It used to be a lot about hardware, right? And now they don't have any interesting hardware anymore. So they have to show you things like liquid glass, which is not going to be the sort of thing that's going to make you run out and upgrade your iPhone. So talk to me, Gene, a little bit about what you saw, what excited you, what disappointed you.

So as for kind of starters here, I think Apple might have even been a little bit more active in terms of kind of messaging what's going to happen here to make sure that the expectations for the media and for investors was a relatively low bar. And so I think that was just kind of a starting point is that essentially what was previewed happened and what happened, the biggest news, I think,

I think for most headlines, most people are focused on these changes to the operating system. And effectively, what they're doing is they're making not only just tying the look and feel together across all of their devices, but they're also adding functionality that is cross-device. So if you make an adjustment on some setting on your watch, for example, and how icons are displayed on your watch, then that can replicate over to other devices. And I think that the central focus

message in terms of on the operating system is that Apple is really trying to tighten how consumers think about these devices. And it really is focusing on something that they do really well, is if you look at the average devices per Apple customer, it's about 1.7, they have about one and a half services per customer. And so that's something that Apple excels at. If you're going to look at like a comparable Android, it's just fractionally above one.

And so Android, like family of devices, basically no one does this. So what Apple is doing today, what they announced today with this liquid initiative is just to bring all the devices even closer together. They're circling the wagons on that piece. That was where most of the energy was spent. There was a press release and two mentions during the hour and 15 minute event related to this foundation model. This, I think, was like the most important part.

this foundation model framework, they call that, which basically makes it a little bit easier for developers to add AI features to their apps. And so we can talk more about it, but at the highest level, they're kind of getting back to their basics. I think that they do not want to overextend what they're promising. I do also believe that

is that they're working on a lot more in AI than they're willing to show today because of the mistake that they made last year. Yeah, and that makes perfect sense. I mean, I think the expectations got really high last year. And then, you know, I think they... Yeah, but they remained high too for like the first half of the year. And I think one of the things that just, you know, I think like...

Open AI was just able to break away from all the services that they had been adding over the course of that second half of the year or so. And it really became, I think, almost a one-horse race, if you think about it. And on the device, you make a good point. I want to shine a little bit of light on that, too. You're bringing up an important point related to Open AI and Apple over the past year. It's

And I'm an Apple shareholder, continue to believe they're going to get this right. And I think it's reasonable to say, I think over the past year, what you have seen is Apple being incremental to tying these devices more closely together, opening up a framework.

And you see open AI being like really aggressive in terms of trying to innovate, maybe more capturing how the most cutting edge people think about AI. That's what open AI is doing. I mean, the whole Johnny Ive thing, I think, embodies some of that. And so that is a distinction that I think is worth noting is this

piece around Apple kind of buying time. They also had this white paper that came out over the weekend that's worth talking a little bit about that also kind of speaks to them buying a little bit of time for them to get this right. All right, before we get to the white paper, one of the things I kind of take away from the last couple of years with OpenAI and Sam Altman, and I guess, you know, if you go back to, you know, late 22, early 23, I

I think it was, or late 23 with all the, you know, kind of excitement around Sam Altman getting kicked out and coming back in. But since then he's been kicking ass and taking names and like, yeah, they had some talent leave and start some, you know, startups. But what really strikes me is how the Microsoft

and even the Apple relationship have just been strained. I mean, for all intents and purposes, I mean, OpenAI was going to do a sweetheart deal with Apple a year ago because they thought, and you and I have talked about this a lot, the sort of distribution that they would have off this install base, you know, from Apple. And, you know, they just keep shipping product. They keep advancing. And, you know, when you kind of juxtapose that versus Apple at one of their biggest events of the year, you know, talking about a small, you know, foundational model, it just seems like small ball.

It just seems like they keep getting further behind. And I would kind of make the same sort of judgment about Microsoft because Microsoft, where they are in AI, it's Azure. You know what I mean? So like and you could tell me maybe I'm wrong, but, you know, if open AI is a pure play, get that thing to the public markets because that's going to be like a trillion dollar market cap in the not so distant future if they could get there.

i think the conversation that's going on at apple and cupertino is related to i mean they have an understanding that ai is important obviously they came out with apple intelligence they're sticking with that they showed some incremental features around that but again i think that when we look at what has happened between apple and open ai

I think it's just, it is hard to take a foundation model and integrate that as deeply into Apple's features as they want to at the same time while maintaining their privacy approach. And so I think that there has been a lot of learnings. I mean, they were moving fast to get this together a year ago and they've learned that this is really tough to bring together. So I just, the only reason why I think it's worth mentioning that is that, you know, the, the,

I think that it's just too early to say that they've just totally got out innovated around AI. I still believe that they got stung last year. They didn't want to go and impress it this year. And I think the depth of what they're working on, and some of that is a large language model, is they mentioned a large language model today, how that impacts their relationship with OpenAI.

or other partners is up in the air. But I think that that's important to note is that they have a 150 billion parameter model. It's the same size as GPT-4.0. That's a real model that we really haven't heard a lot about. And I think that as you dig deeper, there's probably something around. They just don't want to get their expectations ahead of themselves in terms of how that's going to impact their features.

Yeah. So what was your takeaway from the white paper? Because obviously this has been like the foundation of the foundational models over the last four or five years or so. Then one of these organizations put out this white paper, kind of lays out kind of write their vision for, you know, the models that they're going to be putting out, that sort of thing. So what did you take away from Apple's?

So this is put out by Apple AI engineers, AI experts. It's think of it as an Apple paper. I got to read you the exact title because it matters. It's the illusion of thinking, understanding strengths and limitations of reasoning models. And so the illusion of thinking and essentially the substance of the white paper is that they did testing on some forms of

Claude, which makes me wonder how that relationship is going. Also DeepSeek and showed that I think they referred to it as a patient child is kind of the level of reasoning that these models are doing. And really highlighting that these models really, in their view, just aren't reasoning right now. And so then it begs the question, why would Apple, a few days before their developer conference, put on a white paper that says that reasoning models aren't quite reasoning yet?

And I think that the answer is they're trying to send a message to developers and to other AI people is that AI, I always send the reasoning side, isn't as far advanced as many would like to believe. Now that bodes well for Apple because when it's not as advanced, then you're not as far behind and it gives you time to catch up this complaint to some of that LLM that I just had mentioned. And so I think that's what my takeaway is. Some people have interpreted this white paper as saying that

Apple doesn't believe that reasoning is part of AI in the future. I don't think that that's the accurate takeaway. I think they're just simply pointing out their testing is that these models aren't at a true like adult reasoning point. And I think there's time to catch up. So that was my interpretation of that. But the timing on this wasn't coincidental. Obviously, they were sending a message a few days before the developer conference about what they're doing with some of these larger models.

Yeah, it's just interesting to me. Apple is down 1.3% today. We have a half an hour until the close. So obviously there was nothing meaningful that at least as far as investors were concerned or short-term investors. And this kind of brings me back to last year. The stock on the day of WWDC, once folks had the time to digest it, closed down about 1.5%. The next day it opened up and then the next day it opened up again. And after two days, it was up

10%. I mean, think about that on, you know, $300 billion in market cap. And so a whole host of folks came to a different conclusion that I did is like, there was nothing particularly meaningful about that, but which is one of the reasons why I really appreciate your view, because you're not thinking out next week, you know, next month, you're thinking about years and, you know, what this means to kind of build this technology and kind of have their specific view and who they end up partnering with, which is very,

on apple but it seems like they're going to have to to some extent there could be an acquisition which also is on apple if you think about it right um so um you know we'll see i mean so here's my take here this is the worst performing uh mag seven faithful eight name

It's down nearly 20% on the year. The next one that's down that much is basically Tesla. We're going to talk about that in a second. So for whatever reason, this one's in a penalty box, and it's a very unique name relative to, let's say, the other in the MAG7 or so. What do you do with the stock here? If you think back to the second half of the year and you think about how the calendar Q4 last year, it didn't see that upgrade cycle that a lot of folks were hoping for. I can't imagine that

comes this year, not for liquid glass, unless you need a new battery, you broke your screen, you know, that sort of thing. So, you know, one of the things I've been on the other side of is this whole idea that the cell side has this upgrade super cycle narrative. You know what I mean? There's 300 million that need to be upgraded. It's just not happening that way anymore. You know, I mean, at least it hasn't. So you tell me when they come out with this kind of AI phone, and I'm sure it's going to be called iPhone AI, but that's probably a 2026 thing.

2026 thing, I think that as far as when's the stock going to actually start to make a move, I think it's probably something around tariffs. At least in the next three to six months, it's probably more important. Keep in mind on their last earnings call, seven of the 13 questions had to deal with

Other than beyond the June quarter, that is rare. Usually you get one question beyond the June quarter, but it was a lot of questions about that. So even though that the tariff trade has kind of improved, I think Apple still has been penalized for that. So that's probably how that plays out is it's probably the next X factor. But just fast forward to let's put ourselves in September and to the investors who have kind of stuck around and been

patient for what's through this whole AI that started last year and building this out. And let's take the case where they have a new device, a new iPhone that looks more exciting. You're going to get a step up likely, even if the price bumps up, you're likely going to get a step up in demand on that. Let's take the case that they don't do that, that that's a fall of 26 announcement.

In that case, there's going to be some disappointment, but of course, hope springs eternal. And then three, six months down the road, you're going to start to see people anticipating this new phone. The point is that eventually, whether it's this fall or 2026, they're going to have some more potent devices that are going to be showing more features around AI.

But I stand by what I mentioned last year. I've been dead wrong on this. I thought we were going to be in a super cycle. I thought iPhone was going to roll at 8% to 10%. It's going to be up like 2% or 3% this calendar year. But I stand by my belief that there is features that people don't, that people want more out of their devices.

I think AI can deliver that. We can go through some examples. And I think eventually Apple will get there, which is going to be positive. And as long as that hope is out there, I think that that's probably that's going to be some of the framework where shares can move up beyond just tariff resolution. Yeah, that makes sense. I mean, it will be interesting to see about tariff resolution. I

They might get a carve out. I don't think there's going to be some major, you know, China deal anytime soon. I know you kind of think maybe summer or something like that. I just don't. I mean, like, you know, we had Gary Cohn, former president of Goldman Sachs, who was in the National Economic Council under the first Trump administration. He's the one who did the tax bill. You know, he was on the show on Thursday and basically said he literally said the words.

We have a trade deal with China. This was after a call with President Xi and Trump. I think there's so many folks who want that to be the case and they're willing to say this. I think it's intellectually dishonest. And, you know, so we'll see and we'll see what happens here. All right, let's hit Tesla. I know we only have a few minutes left on Thursday. We have this robo taxi event expectations.

i guess they're not high i mean they're not high if you think that elon's full of um you know what i mean like meaning like that whatever he said about the time in which they're going to start having hundreds if not thousands of robo taxis on the roads um and when they're going to start booking revenues if you don't believe that then you know expectations are probably fine because it's not like they're going to confirm anything one way or another

What is your thought here? There was a couple of downgrades on the street. The stock is actually trading up three and a half, 4% or something like that. This is coming days after that 14% drop when he was battling with the president a little bit. Thoughts into this event and expectations? Because last time they had an event, investors walked away. They were very disappointed.

My first thought is, like, how do you define an event? And stick with me here is that Bloomberg, I believe it was Bloomberg, reported that there is an event. It may just be something as simple as they start launching 10 robo taxis in Austin. It just that may be the event.

If I was going to have to guess, it's probably more like that than any sort of big thing that Tesla typically does. At this point, being a few days in advance, we probably should have seen a little bit more. So again, I don't think you can penalize Tesla for that because they never said there was going to be an event and backed off. Bloomberg has reported this.

But as far as like, what's the, what's at stake here is even though it's called a 10 model wise and around the road, I think there's, there's a lot at stake. There's a lot of sake because of course, even if there's no like big formal event, everyone is going to be hyper-focused on how these cars are performing. And,

And is the second step, in my view, about how the whole autonomy story unfolds for Tesla. FSD's progress over the past few years is chapter one, and that continues to be written. And this is a new chapter here with the RoboTax. And so I'm still in the case that Tesla's in a great spot.

And as far as like, if I had to guess how this plays out over the next, you know, few of these, Elon talked on CNBC about a thousand robo taxis in a few months, so call it by the end of September.

I actually think that the rollout is going to go relatively well. And the reason is that Waymo has been going relatively well. It's not perfect, but it actually goes, it's been doing relatively well. And I think Tesla actually has more miles behind it. It's a little bit of different tech if you look into it, but I think that

And this if they have just a pretty limited number of vehicles on the road, I don't think you're going to see any like really big fireworks. And I think that's probably going to be a win for the stock if they can just show that they go from they don't even have to go to a thousand vehicles model wise in three months. If they go to 100 from 10 to 100, I think that that would be.

a step in the right direction. And I think what's most important is whether it's this week or in two weeks or three weeks is sometime in June, they start rolling out those 10 model wives. Yeah. How can they roll out autonomous,

vehicles if they don't even have full self-driving legal? You know what I'm saying? Like, so for instance, it's still supervised full self-driving. So how can they do that? And given what happened last week between Trump and Musk, I can't imagine that there's any regulatory like kind of, you know, speed up, if you will, about this. So to me, you know, regulation remains a big problem. And, you know, after what just happened last week, are you going to

are you going to trust Tesla to get in their cars? I mean, this was kind of like, that was mayhem. So again, you could say, well, let's separate the forest from the trees here. But we had two of the most

powerful people on the planet acting like absolute children. If our children acted that way, you know what I mean? You'd put them in the penalty box. You might not see them for a couple of weeks. So I actually think that the brand degradation that we've seen on their EVs is likely to carry over to their full self-driving. I mean, that's my personal view and it's purely anecdotal, but I could see something like that happening. I'll just go rapid fire. The first topic was just, you know, how can they do, um,

Well, how can they do a RoboTax if they can't do FSD? They can do FSD. It's there. It's not like fully regulated. And the big difference here is that they're going to have somebody. There is a remote driver that's watching. That's the things that suck. So that's that's how they do it. The second, just in terms of, you know, like the brand and what is all this chaos of last week mean for the brand?

From, you know, I think from like the use of a robo taxi, there's going to be so few of them out there that I think that brand damage at this point doesn't really matter. It's going to be more about how the vehicles perform. And the last piece is in terms of just broader, like what's going on with the brand and the vehicles. And I still think that this year, the number of deliveries is going to be measurably below where the streets at.

I think the street's probably orbiting around that 415 number right now. For the quarter. Sorry, for the quarter. Yep, for the quarter. Thank you. That's for the June quarter. And I think it's probably closer to 350. And so-

Troy Teslake does a great job on this, giving him props at being probably the most accurate person when it comes to deliveries. I know you and I share respect for his work, and I think that it doesn't change my view that we should go back to growth next year.

You know, the big picture is this, is Tesla has changed their message to being a physical AI company. And it's important how FSD goes. It's also important that as we go from 10 to 15 to 100 customers,

robo taxis on the road that they things go off relatively well. And I think they've got a lot of data to suggest that they're going to be able to pull this off. Yeah, I'd take the over on it. And I'll just say that, you know, Tesla's EV business has never been worse. And if you say next year they return to growth and it's still going to be below what the high watermark was just below two million cars a year. And there's so much

less profitable now than they were. And there's no way, I don't know how you see material margin improvement when they're gonna do this stripped down Y, the thing is already stripped down. You know what I mean? Like, and if you see these credits go away, I just don't see it. And you know, there's no indication that the price wars that's going on with Chinese EV makers is gonna let up anytime soon. The Chinese government is trying to get them to stop lowering prices. They have an overcapacity issue and they have a lack of demand issue.

And maybe the world right now is saturated with these things. And maybe the leader in these things or the perceived leader is not leading the way anymore as far as innovation, as far as price, as far as brand, that sort of thing. So I'll just leave it at that. If you want to counter that, I know we got to get out of here, but- - I'll just counter is I think that the rest of automotive, I think UID is doing a lot. I think that there's great Chinese manufacturers of cars.

i think tesla's doing a better job than anybody else in the western world and and we'll see how it plays out 100 gene munster of deep water asset management thank you for being here gene i really appreciate it thank you always always enjoyed dan thank you all right see you brother thanks