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I still don’t get the logic of investors cheering for a $SPCX $TSLA combo.  One, mergers of two megacap disparate companies rarely work as target synergies do not live up to their expectations.  To argue both are AI plays and there are AI synergies to combining seems naive, since we have heard repeatedly during this earnings season all tech stories (e.g. $CRM, $DELL, $MRVL) are now AI plays.  Any tech combo can now promise that. 

Second, and perhaps more importantly, proponents of a $SPCX $TSLA merger don’t even try to address the dilution math of such a merger:  If a 300x EV/EBITA company like $SPCX acquires a 100x EV/EBITDA stock of similar size such as $TSLA, the consolidated entity will trade at the least common multiple - so here 100x EV/EBITDA - effectively wiping out 28% [(100x) x (SPCX $6.6Bb Adj EBITDA + TSLA $15B Adj EBITDA)/ $3T = .72]/ of the combined enterprise value.  Why would a $SPCX investor other than maybe Elon who might presumably prefer to be CEO of 1 rather than 2 megacap companies go for that?

A $TSLA/SpaceX merger makes no sense mathematically for TSLA shareholders unless there are huge cost or revenue synergies for $TSLA.  The 35% dilution is just too great given the relative P/E differences.  This is the same reason the idea of a combined enterprise with all of Elon’s businesses didn’t fly last time. 

The math is pretty straightforward:   If TSLA contributes its $1.5T market cap at a 200x P/E and SpaceX contributes its $800B market cap equity at a 400x P/E, the combined company would have $2.3T market cap, To make the math work, TSLA would dilute its shareholders by issuing 35% new shares ($800B / $2.3B), and the combined company would show $8B adj net income (TSLA $6B, SpaceX $2B).  IMO many existing TSLA institutional shareholders would balk at the uncertainty of 25% profits coming from space travel/communications and sell their shares.   Every TSLA shareholder knows that TSLA is no longer just an EV company, but Energy, Autonomy, and Robots are at least profitable and can be modeled analytically.

The industrial logic of a TSLA/SpaceX merger escapes me.  I get that a deal makes Elon’s empire easier to manage since TSLA can fund SpaceX’s negative cash flows but that’s not TSLA shareholders’ concern.  While it’s true we no longer own TSLA shares so have no horse in this race, my past warnings to TSLA shareholders (TSLA would not sell 20M cars/year by 2030, other mnfrs would master unsupervised autonomy at the same time as TSLA) proved correct and so should afford some credibility that I know what I’m talking about.  

$TSLA has now underperformed Nasdaq for 5 years (TSLA  +48% vs NDX +90%) including over the past year (TSLA +12% vs NDX +20%).  We use 1- and 5-year measurement periods because those are the most common periods used by Bloomberg users, as you can see by the Bloomberg default periods at the bottom of the graphs below.

AI Wins Have Alphabet Poised to Become World’s Biggest Company
▪Alphabet Inc. has become a dominant player in the AI technology market, with a significant presence in nearly every aspect of the technology.
▪The company's market capitalization has been gaining on Nvidia Corp.'s, with Alphabet's stock price soaring 43% since October 31, while Nvidia's is up just 6.3%.
▪Investors say Alphabet's diversified businesses, including Google Search, Google Cloud, YouTube, and Waymo, put it in a prime position to be the biggest winner in the AI trade, and potentially overtake Nvidia as the largest company in the world.
By Ryan Vlastelica
05/10/2026 08:00:07 

(Bloomberg) -- Over the past year, Alphabet Inc.( $GOOGL) has gone from an artificial intelligence afterthought to the one firm in the market with dominant positions in nearly every aspect of the technology. Now it’s on the brink of overtaking AI chip giant Nvidia Corp. as the largest company in the world.

“Alphabet holds a significant spot in almost every corner of the AI ecosystem, and the combination of everything it offers puts it in a prime position to be the biggest winner of AI,” said Luke O’Neill, chief investment officer at CooksonPeirce Wealth Management, which owns stakes in Alphabet and Nvidia.

Google’s parent closed Friday with a market capitalization of $4.8 trillion. Nvidia was below that level on Tuesday, but a three-day rally into the end of the week pushed it to $5.2 trillion. 

The gap between the two has narrowed considerably over the past six months, as Alphabet shares have been on a tear, including a 34% gain in April, its best month since 2004. On Oct. 31, Nvidia’s market capitalization was $4.9 trillion and Alphabet’s was less than $3.4 trillion. Since then, Alphabet’s stock price has soared 43% while Nvidia’s is up just 6.3%, trailing the S&P 500 Index and the tech-heavy Nasdaq 100 Index. 
￼
Investors say it’s logical that Alphabet would ultimately seize the title of world’s largest company because its tentacles reach into so many important parts of the technology industry and the AI trade. 

Nvidia may be the leader in building AI chips, but Alphabet has a rival product that’s gaining favor. It also owns a bunch of massive businesses like Google Search, Google Cloud, YouTube and Waymo. In addition, Alphabet’s Gemini AI model is considered one of the best in the industry, and the company is a significant investor in Anthropic, which has another leading model in Claude.

“Nvidia is a great company, but it has the potential to be far more cyclical should AI spending slow down,” O’Neill said. “Alphabet is so diversified that if one business falters, the others can pick up the slack. You can’t get a wider competitive moat than Alphabet has, and it seems like THE company of the internet era. So it would make sense if it were the biggest.”

Read More: Nvidia Stock Falls Behind as Big Tech Rivals Enter Its Territory
Alphabet was the biggest stock in the market in early 2016 when it briefly surpassed Apple. As of Friday, Apple’s market cap is $4.3 trillion, followed by Microsoft Corp. at $3.1 trillion and 

$NFLX -10% today seems overdone given that NFLX maintained its FY’26 sales guidance (+12-14% YoY) and operating margin guidance (31.5%) despite weak 2Q rev and eps guidance.  The key risk is that NFLX still needs content and may pursue an M&A opportunity elsewhere. 

NFLX still looks compelling at a 2026 P/E of 28.6x and 2026 EV/EBITDA of 24.2x vs 2026-30 forecasted Rev growth of +10%, EBITDA growth of +16%, and EPS growth of +17%.

$DASH +11% AH as 2Q gross order value guidance exceeded expectations and 1Q results came in line. This is similar to $UBER who also guided higher for 2Q gross bookings after posting in-line results for 1Q. 

2Q Guidance:
- Marketplace gross order value $32.4B - $33.4B vs $32.25 billion est.
- Adj Ebitda $770M-$870M vs $830M est.

1Q Results:
- Marketplace gross order value $31.6B +37% y/y, vs $31.21B est
- Rev $4.04B, +33% y/y, vs $4.15B est
- EPS 42c vs. 37c est
- Adj Ebitda $754M vs $741.4M est
- Adj gross margin 51.9% vs. 51.1% est
- Orders 933M vs 942.25M est
- Free cash flow $420M vs $631.2M est

COMMENTARY AND CONTEXT
- We continue to expect Deliveroo to contribute approximately $200 million to our Adjusted EBITDA in 2026"
- 2Q EBiTDA guidance included gross cost of the Dasher gas relief program of $50M, funded at least partially by adjusting investments in other area

DASH continues to look compelling at a FY’26 P/E of 33x and FY’26 EV/EBITDA of 19x, vs 5-year forward rev growth of +20% CAGR and 5-year forward EBITDA growth of +25% CAGR.

Conf call 430pm ET

For the record, I am far more aligned with $TSLA longs than shorts.  Of all OEMs, TSLA has the greatest chance over the next 12-18 months to exploit the opportunity from unsupervised autonomy as FSD efficacy improves and TSLA continues to traverse the march of nines.  

That said, It’s hard to make the TSLA P/E math work if TSLA only offers unsupervised autonomous ride handling in a few states. I don’t see consumers en mass rushing out to buy a robotaxi vehicle with just two seats sans steering wheel and pedals anytime soon. I similarly believe TSLA bulls under-estimate competitors’ abilities to scale up unsupervised autonomous ride hailing with $GOOG $BIDU, $PONY, $WRD, and $AMZN already completing 1M paid robotaxi rides per week and $NVDA offering its autonomous hardware/software stack to every OEM. 

My issue is not lack of understanding or confidence in TSLA’s unsupervised autonomous capabilities.  My concern is that at 200x 2026 EPS, the market has already discounted TSLA’s success in achieving unsupervised autonomy and ride hailing without evidence TSLA has the marketing muscle to dominate either in what will surely be crowded spaces. Put simply, I like Tesla the company but not the valuation.   For bulls who keep posting $2,500, $3,000, and even higher valuations, kindly show us the math.

From my pre-mkt summary for Subscribers this morning:  $TSLA +1.1% again this morning to $416 after rising +5.7% the past two days after showing significant year-over-year gains in April in China and several European countries, as global oil prices have surged.  

Despite likely continued near-term momentum fueled by rising oil prices I remain cautious on $TSLA given the company’s disappointing FY’26 outlook following robust 1Q earnings.  2026-30 earnings ests continue to decline and investors are coming to the realization that other manufacturers will also solve for unsupervised autonomy over the next 12 months. $GOOG $BIDU $WRD $PONY and $AMZN are now completing 1.0M paid unsupervised autonomous rides per week without safety monitors.  I have no position in TSLA due to its extended valuation (2026 P/E 220x vs +36% long-term EPS growth, 6.0x PEG).

$NFLX -9% AH after guiding to lighter than expected 2Q revs and EPS, and announcing that founder and Board Chair Reed Hastings would not stand for re-election.  FY’26 Rev guidance was unchanged vs prior guidance despite 1Q results beating across all metrics.

1Q actuals:
- Revs $12.25B vs $12.17B est
- EPS $1.23 vs $0.76 (includes $2.6B WBD exit fee)
- Operating margin 32.3% vs 32.4% expected

2Q guide:
- Revs $12.57B vs $12.64B est
- EPS $.78 vs $.84 est

FY’26 guide:
- Revs +12-14% YoY to $50.7B-$51.7B (same as before)
- Operating margin 31.5% vs 32.0% est (same as before)
- Adv revenue $3B (no change)
- FCF $12.5B vs $11B prior due to WBC termination fee

Stocks rose pre-market despite new US and Israeli strikes on Iranian vessels in the Strait of Hormuz, which killed Iran personnel and disrupted shipping amid mine-laying attempts. Trump had indicated negotiations with Tehran are “proceeding nicely.” Brent crude surged 3.9% to $99/bbl although 10yrTY fell -5.1bp to 4.50%.

I expect equities to reclaim new records as the conflict ends, oil retreats, and S&P 500 2026 EPS ests now at $340 (+22% YoY) on AI and energy gains, implying a 4.5% forward earnings yield, the same as 10yrTY.  Several specialty retailers will announce 1Q earnings this week. I remain cautious on $TSLA due to declining estimates, rising autonomous competition, and an extended valuation.​​​​​​​​​​​​​​​​​​​​​​​​​ For more detail see my pre-mkt summary for Subscribers only.

In today’s pre-mkt summary for Subscribers:  Equities slipped in front of today’s almost certain 25bp Fed rate cut and new dot plot showing 2 additional rate cuts in 2026;  $WBD continues to move higher as investors expect bidding to go above the current $30/share cash offer by $PSKY;  $NVDA wavered as the Chinese govt considered whether to allow its tech companies to buy Nvidia's H200 chips after President Trump's decision to resume their export to the country;  $AVAV fell after the 43-day U.S. govt shutdown shifted order activity until later in 2026 even as demand remained strong;  $TSLA rose after Elon Musk said Tesla had "pretty much solved" unsupervised full-self-driving and reiterated that driverless Robotaxis would be available in Austin in three weeks.