U.S. stocks were mixed pre-market Tuesday (SPX unchanged, NDX -0.3%) after South Korean data-center firm Elice plunged 32% on its debut, reviving AI-spending return concerns ahead of $Netflix(NFLX.US), $SpaceX(SPCX.US), $Tesla(TSLA.US) and $Meta Platforms(META.US) earnings today and tomorrow. The SOX fell -1.4% ( $NVIDIA(NVDA.US) -0.4%, $Micron Tech(MU.US) -2.6%. $SK Hynix(SKHY.US) -3.9%) as investors continued to reduce record tech holdings as a % of S&P 500. Brent crude rose 1.7% to $111, and the 10-year treasury yield eased to 5.11%. TSLA was flat at $368 amid SPCX-TSLA merger speculation. S&P 2026 EPS estimates of $367 imply a 21x P/E and inverted earnings yield vs. Treasury yields (echoing the late-1990s dotcom bubble), though yields are expected to retreat as the Iran conflict ends. TSLA remains expensive to us with a 2026 P/E of 230x vs +45% long-term forward EPS growth as unsupervised autonomy continues to commoditize, led by China.
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I’ve long felt that a $SpaceX(SPCX.US) - $Tesla(TSLA.US) deal is inevitable since Elon controls 48% of $SpaceX(SPCX.US) as-converted shares and 10.5% of TSLA shares. Since any deal would be $SpaceX(SPCX.US) stock for $Tesla(TSLA.US) stock the deal will not be as compelling as many on X believe, given the massive dilution and all-equity economics. I expect a SPCX offer price in the neighborhood of $420/TSLA share, and as in most stock-for-stock deals will likely get arbitraged down given the approximate 6-12 months needed between a deal announcement and deal close.
I would expect the combined SPCX/TSLA multiple of EBITDA or EPS to follow the acquiring company’s multiple, which in this case is $SpaceX(SPCX.US) and is lower than TSLA’s FY’27 EV/Ebitda multiple (TSLA 72.6x, SPCX 29.4x). All told, I don’t expect a huge windfall for TSLA shareholders on a SPCX/TSLA stock-for-stock deal, although the announcement itself would be positive for TSLA stock.
U.S. stocks rebounded Monday (SPX +0.5%, NDX +1.1%) ahead of $Meta Platforms(META.US), $Netflix(NFLX.US), and $Tesla(TSLA.US) earnings this week, lifting chip stocks after SOX’s -17% nine-session skid (longest since 2006). Brent fell -2.4% to $107, the 10-year TY rose to 5.08%, and #BTC, gold, and silver all moved higher. $Tesla(TSLA.US) edged up +0.4% after investors expressed indifference to the Roadster unveil (limited earnings impact) and awaited a $SpaceX(SPCX.US)-$Tesla(TSLA.US) all-stock merger announcement. 2026 S&P EPS of $367 (+32% YoY) implies a 21.1x P/E = 4.7% earnings yield which remains inverted vs 10-yr treasury yields, last seen in the 1999-2000 dot-com era. I expect long rates to ease as the Iran war ends. I remain cautious on $Tesla(TSLA.US) due to its stretched hvaluation (230x 2026 P/E vs +45% future long-term earnings growth) as autonomous tech continues to commoditize.
I warned everyone that the Roadster unveil would be met with indifference by TSLA investors ($Tesla(TSLA.US) -3.1% vs NDX -2.3%). One, while the engineering and tech were dazzling, the expected financial impact (we estimate +$.06/share incremental eps in 2029) is only +1.1% of consensus 2029 adj eps of $5.40. Second, the halo effect on the $Tesla(TSLA.US) franchise is likely to be limited since only a tiny subset of U.S. drivers care about going from 0-60 in 1 second, or that the vehicle can fly short distances while doing flips mid-air. Third, TSLA always sells on the news after its events and the same principle applies today. We remain cautious on $Tesla(TSLA.US) due to its extended valuation, continued expected negative revisions, and our view that unsupervised autonomy becomes commoditized.
$Tesla(TSLA.US) unveiled its long-awaited revamped
Roadster EV last night before an invitation only audience at the SpaceX facility in McGregor TX. The car, which leverages $SpaceX(SPCX.US) thruster and suction technology to fly short distances, will offer promised acceleration from 0-60 in under 1 second, making it the fastest production car in the world. While amazing from an engineering and technology standpoint, we estimate the 2029 financial impact assuming 3,000 deliveries per year and a $100K unit profit per car, will be roughly $.06/share, or 1.1% incremental to 2029 consensus adj eps of $5.40. More important is likely to be the halo effect on the Tesla franchise and brand impact created by the prototype's flight capabilities, acceleration and handling which could add far more incremental value from a franchise standpoint. We remain cautious on $Tesla(TSLA.US) given its extreme valuation (2026 P/E of 230x vs +45% long-term esp growth), negative 2027-2030 earnings revisions, and our view that unsupervised autonomy, the stock’s main value driver, will become increasingly commoditized over the next few years as full self-driving becomes table stakes for remaining in the automobile business.Here are some of the biggest mistakes I’ve made as an investor.
1/ Underestimating the competitive response to successful product introductions, leading me to extend current revenue and earnings growth into the future. Most innovation is easily replicable.2/ Over-relying on management’s guidance or forecasts instead of doing my own 360 degree research - seeking input from customers, suppliers, competitors. 3/ Underestimating the power of brand leverage - extending powerful product franchises into new categories especially by competitors of a stock I own.4/ Underestimating cannibalization - incorrectly assessing the negative impact of new product intros on a company’s existing base of products.5/ Betting too much on a CEO’s abilities to turn around a franchise based on his/her past record of success.6/ Overpaying for a mature business or franchise. I’ve rarely made money paying an outsized multiple relative to forward revenue or earnings growth (>4x PEG).7/ Ignoring repeated negative earnings revisions. Sometimes a company misses numbers and earnings come down. But if it’s a pattern that keeps repeating, beware.I try to incorporate these learnings into my current research disciplines so I don’t make the same mistakes over and over. As an investor you’re doing well if you get 60% of your bets right. With the 40% of bets I get wrong, I try to learn from them.$TSMC (-1.7%) delivered a better-than-expected revenue outlook of +44% for FY’26, up from its previous FY’26 forecast of +40%, but failed to dispel rising concerns about the sustainability of the global AI buildout. Other chip stocks are falling in sympathy pre-mkt as investors seek to reduce the weighting of tech stocks in their portfolios, which has reached record proportions.
Tech now makes up 40% of the S&P500, up from 34% at the end of 2025 and 29% at year-end 2021. I see high growth health care names as major beneficiaries as investors seek alternatives to reduce their AI exposure. $Eli Lilly(LLY.US) tacked on +1.5% pre-mkt to yesterday’s +3.6% rise as oral GLP-1 momentum builds (Foundayo) while Injectable growth (Zepbound, Mounjaro) remains intact. $Eli Lilly(LLY.US) reports earnings on Oct 29th and I expect management to again raise FY2026 rev guidance (prior $85-$87B +35% YoY).
U.S. stocks edged higher (SPX +0.2%, NDX flat) on strong $ASML(ASML.US) earnings and guidance ahead of more bank results and September CPI. Brent fell to $106, and the 10-year treasury yield slipped to 5.19%. Bitcoin rose to $83.6K, and gold/silver moved lower. ASML rose +2.5% on robust demand and guidance, while chips were mixed and Tesla was flat. Financials $BlackRock(BLK.US), $Bank of America(BAC.US) and $Morgan Stanley(MS.US) report today amid higher expected interest rates and dealmaking concerns. NY Fed President John Williams expects one more rate hike this year but none in 2027. S&P 2026 EPS estimates imply a 21.3x P/E and inverted 4.7% earnings yield vs. Treasuries, reminiscent of the late-1990s bubble, though yields may ease as the Iran conflict ends. $Tesla(TSLA.US) remains unattractive at a high 2026 P/E of 230x vs +45% long-term earnings growth amid declining estimates and continued commoditization of autonomy.
U.S. stocks were mixed pre-market (SPX unchanged, NDX -0.4%) as the global chip selloff persisted, with Samsung and SK Hynix plunging in Asia. Brent fell 1.5% to $105 as Saudi Arabia intercepted Houthi missiles and President Trump threatened to get involved on Saudi Arabia’s behalf. The 10-year treasury yield eased 5.0bp to 5.19%. Banks kick off Q3 earnings today followed by tech heavyweights $ASML(ASML.US) and $Taiwan Semiconductor(TSM.US) later this week. Sept CPI is due tomorrow, and Fed Chair Kevin Warsh speaks on Friday at an IMF-World Bank event.
S&P 2026 EPS estimates of $367 continue to rise (+32% YoY) and imply a 21.3x P/E and 4.7% yield, remaining inverted versus Treasuries, a rare setup outside the late-1990s dot-com bubble. Treasury yields are expected to retreat as the Iran conflict ends. I remain cautious on TSLA given its extended valuation, negative forward earnings revisions, and autonomous driving commoditization by competitors.
U.S. stocks edged higher as solid earnings prospects from banks and AI firms this week largely offset increased Middle East risks driven by Houthi militant strikes against Saudi Arabia, driving brent crude to $105/bbl. The 10-year treasury yield was unchanged at 5.24% given today’s U.S. bank holiday. Bitcoin, gold and silver fell modestly; chip stocks were mixed.
This week we get Sept CPI and Fed Chair Warsh speaks at the IMF-World Bank event for central bankers in Bangkok on Friday. S&P 2026 EPS estimates of $367 (+32% YoY) imply a 21.3x P/E and inverted 4.7% earnings yield versus Treasuries—echoing the late-1990s—though yields may ease if Iran tensions ease. We remain cautious on $Tesla(TSLA.US) given its stretched valuation, negative long-term earnings revisions trend, and the expected commoditization of autonomous driving technology.Contrary to what many on X believe, I am not a $Tesla(TSLA.US) hater. From 2019-2023, $Tesla(TSLA.US) was my largest position. In investing, valuation vs price has to matter and if you’re not regularly calculating the difference, you’re not a serious investor. My issue with $Tesla(TSLA.US) now is that price seems high relative to my estimate of value, so I either wait for future earnings and cash flows to move higher (they are declining right now - see below), or for the stock price to move lower to become attractive again.
$Tesla(TSLA.US) stock has significantly underperformed NDX over the past 1, 3, and 5 years, as 2026-2030 earnings estimates have declined, as automation has become a commodity, and as valuation became stretched. So no, I’m not a TSLA hater; I just don’t care for the current price relative to my estimate of value.U.S. stocks were set to rebound as Brent crude fell 1.5% to $103 after Trump said the U.S. would not attack Iran before the midterms amid productive talks, easing oil worries. The 10-year yield rose to 5.24%; chip stocks gained. OpenAI’s expected $70 billion-plus year-end revenue target boosted AI investment sentiment. S&P 2026 EPS estimates of $367 imply a 21.2x P/E and 4.7% earnings yield, inverted versus Treasuries as in the late-1990s peak. Yields likely to fall by year-end as the Iran conflict ends, resolving the equities vs bonds valuation disconnect. Tesla remains rich at a 230x 2026 P/E multiple vs +45% long-term earnings growth amid declining earnings estimates and the continued commoditization of autonomy.
$Starbucks(SBUX.US) $Chipotle Mexican Grill(CMG.US) merger offers the wrong kind of synergy. The overlap between the two brands is unlikely to be enough to justify a takeover premium.
The Financial TimesOctober 9, 2026Putting the band back together is surely a great feeling, but a dubious corporate strategy. Starbucks chief Brian Niccol has considered a merger with Chipotle, his $41bn rival — and former employer — the FT reported on Thursday. However neat the match might seem from Starbucks’ corner office, it makes little sense for shareholders.Niccol knows Chipotle very well indeed. He ran the Mexican-themed restaurant chain for six years before decamping in 2024 to the world’s biggest coffee chain, which was then in a state of considerable disarray. Seen from afar, the two do faintly similar things, serving comestibles to customers who are in a hurry. Both have large, sometimes restive workforces.Moreover, the ways in which they differ might seem from a distance like opportunities. Chipotle’s balance sheet is free of debt; gearing it up a little could provide low-hanging fruit. And while Starbucks has a sprawling global network, Chipotle has yet to venture outside the US, apart from a smattering of international stores. But do these companies really belong together? Not really. For one, the overlap is unlikely to be enough to justify a takeover premium. Imagine Niccol could shave 10 per cent off Chipotle’s food, drink and packaging costs and halve its general overheads. That would save $770mn a year, Lex reckons using Royal Bank of Canada forecasts, giving an after-tax return on investment of just 6 per cent. Anything below 10 per cent should make investors nervous.More importantly, Niccol hasn’t finished fixing up his present employer, making this a poor time to take on his old one. Starbucks shares have gone sideways since the day his appointment was announced. Profitability isn’t yet where it used to be. Same-store sales growth of 8 per cent in the latest quarter suggests the company has turned a corner, but recent numbers are still flattered by the previous year’s decline.Chipotle has fared much worse, as has most of the US restaurant sector. But for Niccol to argue he can do a better job than its current leadership might be somewhat problematic, since Chipotle chief Scott Boatwright was his direct report for six years. Conversely, keeping the brand separate and its leaders in place — the Starbucks boss spent more than a decade at multi-brand restaurant group Yum Brands — would further trim the potential cost savings.Perhaps it’s just that Niccol could use some more motivation. After all, the generous $100mn-plus package he received in 2024, linked to the company’s share price, has mostly failed to pay out. Worse, having started his role in sunny California, he now spends significant time in rainy Seattle. Starbucks should want to keep Niccol engaged, but buying Chipotle is too high a price.john.foley@ft.com
On the surface, a $Starbucks(SBUX.US) takeover of $Chipotle Mexican Grill(CMG.US) makes some sense. Brian Niccol, CEO of SBUX, was previously CEO of CMG for 6 years and was viewed às a visionary leader after guiding CMG to record growth. That said, the synergies of offering Chipotle bowls at Starbucks or potential supply chain advantages for Starbucks seem insignificant. Buying Chipotle may be $Starbucks(SBUX.US) CEO Brian Niccol’s best chance of keeping his CEO job given disappointing results so far in his two years as CEO of Starbucks ($Starbucks(SBUX.US) -3% vs SPX +42%). I am wary when I see a company with lackluster performance trying to acquire another company on the benefits of “synergies” that are far from obvious and likely to cause distraction when $Starbucks(SBUX.US) needs leadership, product innovation, and better merchandising.
Chipotle Jumps on Report Starbucks Has Explored Takeover Summary by Bloomberg AI▪Chipotle Mexican Grill Inc. shares jumped after the Financial Times reported that Starbucks Corp. has worked with advisers on a takeover proposal for the burrito chain.▪The status of the takeover plans couldn’t be immediately learned and a mega deal of this size might never get off the ground, according to people familiar with the matter.▪Analysts expressed skepticism about a potential deal given the vast differences between the two businesses, but noted that access to Chipotle’s supply chain could provide some justification for the potential overture.By Redd Brown10/08/2026 09:51:46 [BN](Bloomberg) -- Chipotle Mexican Grill Inc. shares jumped +8% after the Financial Times reported that Starbucks Corp. has worked with advisers in recent months on a takeover proposal for the burrito chain.The status of the takeover plans couldn’t be immediately learned and a mega deal of this size might never get off the ground, the Times said, citing people familiar with the matter. Brian Niccol, Starbucks’ chief executive officer since 2024, previously spent six years as the top executive at Chipotle, where he spearheaded a period of rapid growth.Starbucks declined to comment on the FT report, and a spokesperson for Chipotle couldn’t be reached for comment.Chipotle shares surged as much as 8.6% in New York trading on Thursday. The stock has fallen about 20% over the past year. Starbucks declined as much as 6.7%, the most intraday in more than a year, before paring its drop.Starbucks is in the midst of a broad turnaround strategy that touches on everything from its store design to how fast its beverages are made to its food lineup. Niccol has complained that its food counters don’t look bountiful enough and said he doesn’t like the cardboard signage that displays photos of its food menu. Chipotle Mexican Grill Inc. shares jumped after the Financial Times reported that Starbucks Corp. has reportedly worked with advisers in recent months on a takeover proposal for Chipotle. Michael Halen of Bloomberg Intelligence has more.Analysts expressed skepticism about a potential deal given the vast differences between the two businesses. Additionally, Chipotle’s market cap is about $41 billion, and a potential acquisition would rank among the largest ever in the restaurant sector, according to data compiled by Bloomberg.“Initially, it doesn’t seem like there’s that many synergies for something like this to happen,” Melius Research analyst Jacob Aiken-Phillips said in an interview. “Obviously, Brian Niccol has intimate knowledge of Chipotle’s operations and Chipotle has pulled back a ton, but I’d have to hear a lot more about what the potential plan would be to see if there’s actually anything to be gained.”Aiken-Phillips added that access to Chipotle’s supply chain and Starbucks’ recent efforts to improve its food offerings could provide some justification for the potential overture.“Chipotle has purchasing scale of all these good, fresh ingredients and relationships across the country, so certainly that could help, but it’s not like Starbucks has a grill,” he said.I believe $Tesla(TSLA.US) is a great company with a unique opportunity in front of it to transform how we travel. But loving a company doesn’t mean you should love the stock. Many investors on X don’t get the basic investing concept that valuation matters — even for great companies. TSLA FY’26 P/E of 234x vs +45% forward eps growth (5.2x PEG) is rich by any standard.
5-year returns: $Tesla(TSLA.US) +43%, NDX +111%.US stocks neared fresh highs pre-market Tuesday (SPX +0.2%, NDX +0.3%) as Brent crude fell 2% to $98/bbl and the 10-year yield dropped to 5.27%, easing inflation concerns. Equity gains are being driven by earnings and AI infrastructure spending, not multiple expansion. Chipmakers continued to rise after last week’s strong Micron strong results with $NVIDIA(NVDA.US) hitting a record high. $Tesla(TSLA.US) gained +0.7% to $380, extending two days of gains on last week’s strong 3Q deliveries. S&P 2026 EPS estimates of $366 (+32% YoY) imply a 21.2x P/E and 4.7% earnings yield, and remain inverted versus 10year treasuries. I remain cautious on $Tesla(TSLA.US) largely due to a stretched valuation, falling longer-term estimates, and continued commoditization of unsupervised autonomy.
If I annualize last week’s $Tesla(TSLA.US) 3Q delivery beat of 25,000 (487K vs 462K), and estimate by how much annual adj EPS should increase assuming this is a permanent volume boost, I come up with +.15/share, which should be worth roughly $32/share to TSLA stock price. TSLA is up +$23/share since Friday morning so there may be more near-term upside assuming the market is efficient.
$Tesla(TSLA.US) has now reported two consecutive very strong delivery numbers. On Friday, it reported 3Q delivs of 486.5K vs 462.0K consensus. That TSLA delivs were down just -2% YoY vs TSLA’s record 2025 3Q, when the $7,500 EV credit was expiring, says it all. This followed TSLA’s blowout 2Q, when it delivered 480K vehicles vs WS expectations of 406K.
Investors are now more focused on TSLA’s efforts to scale up unsupervised autonomy in front of competitors, where TSLA’s generalized FSD technology is clearly superior, but its scale up has fallen far short of management’s guidance (current guidance unsupervised autonomous miles compounding at 10%+ per week; prior guidance unsupervised autonomy with no safety drivers in 8-10 metro areas by 2025 year-end, and prior to that in markets addressing 50% of the U.S. population by 2025 year-end). Today TSLA unsupervised autonomy has been approved for use in six U.S. metros across Texas and Florida (Austin, Dallas, Houston in TX; Miami, Orlando, and Tampa in FL) with the San Francisco Bay Area on deck and Las Vegas approved for permit but still not live. Waymo has been authorized for public fully driverless rides in 15 U.S. metros, including Phoenix, the Bay Area, Los Angeles, San Diego, Austin, Dallas, Houston, San Antonio, Atlanta, Miami, Orlando, Tampa, Denver, Nashville, and Las Vegas. Waymo operates roughly 4,000+ driverless vehicles nationwide. Tesla had about 589 vehicles registered in Texas as fully autonomous (420 Model Ys and 169 Cybercabs) as of October 2.YTD TSLA -18% vs NDX +22%.$Tesla(TSLA.US) (+2% pre-mkt) delivered 486,532 vehicles in 3Q, down -2% vs year ago results that were inflated due to the expiration of the $7,500 EV credit on 9/30/2025. The 3Q result beat our estimate of 470K and WS consensus of 462K. The rise in worldwide gas prices was likely a major contributor to the beat. This could lead to higher FY’2026 estimates after the 3Q earnings release on Oct 20, depending on how much TSLA is investing in AI.
$Nike(NKE.US) -4% AH as 1Q revs missed ($11.21B vs $11.33B est) and mgmt guided FY’27 revs to decline by HSD (vs -2%E). The company cited weakness in China, in sportswear, and the Jordan brand and is taking steps to reposition each. FY’2027 Adj EPS guidance of $1.15-$1.35 was well below consensus of $1.65. While NKE pro-forma 2027 P/E of 26.4x (at the midpoint of guidance) is low vs history (~30x forward EPS), an apparel company with negative rev and eps growth and struggling to show that CEO Elliott Hill’s turnaround plan after two years is taking root could be re-rated lower. Conf call at 5pm ET.
$Tesla(TSLA.US) 3Q IR-compiled consensus deliveries is 461,972 -7% YoY. Recall, the $7,500 EV credit expired on 9/30/2025, which likely triggered stepped-up buying in 2025 3Q. $Tesla(TSLA.US) is expected to announce 3Q deliveries before the market opens on Fri 10/2.
Aug PCE inflation came in cooler than expected (+0.2% vs +0.3%E headline and core), sending the 10yrTY lower (-1.7bp to 5.22%) and boosting equities (SPX +0.4%, NDX +0.4%) pre-mkt. July PCE was revised downward (+0.1% vs +0.2% prior). This should help growth stocks today.
10yr Treasury yields continue to rise, hitting 5.28% today (+4.7bp today) and their highest level since 2007 and before that the 1999-2000 dotcom bubble. This pressures equity valuations, especially long-duration (high P/E) equity valuations since most of their value is in the tail. With the recent inflation uptick mostly oil supply-shock driven, a case can be made for lower 10yr treasury yields once the war with Iran ends, and Brent crude eases.
$Meta Platforms(META.US) is drawing growing attention around its consumer AI strategy as Muse strengthens the company’s push into personal AI assistants and raises comparisons with $Apple(AAPL.US) when it launched iPhone in 2007. META’s 3.6 billion-user base across Facebook, Instagram and WhatsApp is a major competitive moat, giving the company enormous reach as it integrates Muse across its existing platforms. Meta has successfully combined AI, hardware and data, with Muse providing the software layer and products such as smart glasses serving as one of several possible interfaces.
I believe $Meta Platforms(META.US) will continue to move higher as investors better appreciate the disruptive power and reach of META’s new Muse personal AI agent to shop, pay bills, and manage their lives. At 24x 2026 EPS vs long-term future rev and EPS growth of +15%, META still looks attractive despite a +30% gain so far in September (vs NDX +3%).
Bloomberg OpinionBy Dave Lee09/23/2026 04:30:07 I’m Using Meta’s AI Agent and Amazon Can’t Stand It.▪Meta Platforms Inc. has released a new AI agent called Muse, which can organize calendars, scour Facebook Marketplace, and buy things from Amazon, but Amazon has blocked Muse from accessing its store.▪The move is a sign of things to come as Silicon Valley giants try to protect their entrenched advantages in the age of artificial-intelligence agents, and consumers will lose out if their preferred agent can't work well with the full range of digital services.▪The issue of interoperability, or the ability for AI agents to talk to services and to one another, becomes the central question, and companies may need to find ways to work together or risk being forced to open up, with the courts potentially being asked to judge what's fair.(Bloomberg Opinion) -- Meta Platforms Inc. is rightly receiving plaudits for its new AI agent, Muse. I’ve been using it, and it’s plainly the most impressive product Meta has released in years. Harold — the name I gave to my bot — works to organize my calendar, scour Facebook Marketplace for good deals and buy things, with my blessing, from