Regarding the big AI selloff this week, we heard from Elon, Zuck, and Jensen that we’re still early, and I agree with them:
Source: Gene Munster
Gene Munster
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Final thought going into Duo’s launch tomorrow. Don’t read too much into tomorrow because of supply noise. I still expect they’ll sell 20M units in FY27 vs. Street at around 10M.
My guess is each store will have a dozen on hand. I’ll be at a store to confirm.Lead times still showing late January, unchanged from last week.If it’s true that each store only gets a handful, many investors will discount the positive read on long online lead times over the past week, attributing them to tight supply.My read is supply is crazy tight today, but in January it will be much better. They quickly pushed preorders to late January and have held there, which tells me a big ramp is planned. $Apple(AAPL.US)Source: Gene Munster
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Fathom is live.
A new @deepwatermgmt podcast that goes deep on generational tech companies. It explores what makes the best ones great and why they will continue to matter over the next decade, focusing on lasting importance instead of the daily noise.Episode 1 covers $Apple(AAPL.US) with @dougclinton YouTube:Source: Gene Munster
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My favorite quote from last nights $Tesla(TSLA.US) call underscores why shares are going higher.
Ashok Elluswamy (head of AI) responding to a question of how close are traditional auto makers from getting autonomy right “Yeah. It's easy to get to the first 90% and make a cool-looking demo. But when you get in the long tail of this problem, it's so long that people don't realize anyone with their sane mind should not attempt to solve this problem”.Source: Gene Munster
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Elon suggests EV winter is ending.
Goal is 5m vehicles per year starting in 2030. They'll do around 2m in CY26. Implies 25% compound growth through 2030. $Tesla(TSLA.US)Source: Gene Munster
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Elon says demand for vehicles is exceeding production by a large margin and they're ramping production.
FSD is the selling point. My take: I agree FSD is now part of the conversation for many new car buyers, but not the majority. In a few years, it will be the majority. $Tesla(TSLA.US)Source: Gene Munster
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Even though there are only around 10m daily Muse users (my estimate), the product is losing a lot of money, more than any other products they've launched. Reading between the lines.
Zuckerberg says not to worry, the math will work to build out compute to get to scale to get the take rate on commerce. $Meta Platforms(META.US)Source: Gene Munster
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$Meta Platforms(META.US) CFO Susan Li says they're not giving detailed guidance for 2027, but to expect "strong" growth.
Street is currently looking for 21% growth, vs. 27% in 2027. I would consider 25% "strong".Source: Gene Munster
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Elon says in one year to 20k Optimus units per week. I would guess he is talking about exiting run rate at the end of 2027.
That implies about 1m in 2028.My take: The Optimus conversation is still considered optionality for most investors. That call option that has massive value. $Tesla(TSLA.US).Source: Gene Munster
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Zuck reminds investors that Muse (combo of models and agents) will become the center of $Meta Platforms(META.US)'s universe.
My take: In three years, Muse will become the lens consumers engage with Instagram, FB, Whats App, Reels.Source: Gene Munster
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SPCX should be up 30% today.
Here’s a great example of how Wall Street discounts what Elon says. Bottom line, analysts cut the low end of his guide in half. Last night he said they’ll exit 2027 with $500B-$1T in revenue run rate. I believe Elon implied the low was based on adding 10 GW of compute in CY27 and the high end 20 GW. My take is there’s a 75% chance they add 10 GW, and 2% chance of 20 GW. So we should focus on the low end, or $500B in ARR exiting 2027, or $125B in Dec-27. Before earnings, the Street was at $31B for Dec-27. He guided to $125B or 300% increase. $SpaceX(SPCX.US) is up 12% on that. It should be 30% plus today. This morning the Street is at $50B. Since many analysts have yet to update numbers, we look at those that have made changes, and those are at around $70B, compared to the “guide” of $125B. That’s the 50% haircut.Source: Gene Munster
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No new $NVIDIA(NVDA.US) financial metrics or guidance updates from Jensen’s GTC Berlin keynote that just wrapped.
My take: Makes sense given the October quarter ends in a week. Last night’s $SpaceX(SPCX.US) December quarter capex guide of $35-40B (street was at $19B) is a positive read-through for what we should hear from Nvidia on the earnings call in about a month.Source: Gene Munster
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$NVIDIA(NVDA.US) announces DSX Pod. Basically a mini data center in a container the size of a bus. They can be connected. Each one has cluster of Vera Rubins, connected and cooled. Little onsite assembly.
Bottom line is it speeds up the time that it takes to spin up a data center from around 4-5 months to a month. Less wasted idle compute. Makes the ROI more attractive.Source: Gene Munster
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Jensen’s Berlin keynote briefly interrupted by a protester. He handled it like a pro.
It was a small moment that captures the broader tension around AI’s impact, both in the room and around the world.$NVIDIA(NVDA.US)Source: Gene Munster
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Bret maintained revenue guide he gave last quarter, to exit Dec with a $100B revenue run rate.
My take: I'm surprised the stock did not go down on that comment. Shows that the investors’ head is focused on full year 2027 and beyond. $SpaceX(SPCX.US)Source: Gene Munster
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Odds of $SpaceX(SPCX.US) + $Tesla(TSLA.US) combo just inched up.
The question came up on the call. Elon says he thinks it’s a good idea, and there are a lot of merits to combining the companies, but shareholders still have to be supportive.Believe me, shareholders would support this. Elon says there are special committees at request of shareholders to discuss the topic. He is a conflicted party so he can't be in the conversation. My take: 95% chance in the next two years.Source: Gene Munster
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$SpaceX(SPCX.US) now up 4% in after hours.
I think its because Elon is so aggressive about the demand for compute. Good news for SI business. $Coreweave(CRWV.US) was up 1% going into the call. Now up 2.8%.Source: Gene Munster
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$SpaceX(SPCX.US) will likely be raising money in next six months, my take.
They got asked the question. Bret says they're in a good place and are currently talking to debt providers. Have operating cash flows. Have an investment grade and a balance sheet which opens they up to debt. Can get vendor financing.Source: Gene Munster
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Elon says in 3-5 years demand for bandwidth will be 1,000x what it is today.
Requires order of magnitude increase in communication bandwidth. $SpaceX(SPCX.US)Source: Gene Munster
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Huge guide up in Capex. CFO Bret Johnsen says Dec quarter Capex of $35-$40B.
Street was at $19B. $SpaceX(SPCX.US) went up on the comment. Now up 5.2%. Was up 4% before the Capex comment. My take: Smart move. They have the demand. Also, good news for the AI trade that we are still early.Source: Gene Munster
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Starlink mobile:
Head of IR Andrea Williams says Starlink mobile will be a major mobile carrier in the US, which is similar to a comment Elon made a couple of weeks ago.$AT & T(T.US) down 1% after hours. $AT & T(T.US)MUS up 0.2%.My take: The company has a pig-like appetite to go after large markets. $SpaceX(SPCX.US)Source: Gene Munster
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Elon says Grok Bot may over time use most of SpaceX compute. In other words, Grok Bot growth will be over the top.
My take: Today there are only about 15m daily personalized bots world wide. Most Muse. My guess is 5m Grok Bot. I expect 50m daily Grok Bot users in 6 months. $SpaceX(SPCX.US)Source: Gene Munster
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New episode of Fathom: $Apple(AAPL.US)
It's about generational tech companies, not the daily noise. Episode 1 goes back to the company I know best: Apple. What made it great, and what it needs to do to stay great for the next 20 years.With @dougclinton Fathom E1: AppleSource: Gene Munster
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Duo still showing Jan 25 delivery date, unchanged since one hour into preorders Friday morning.
I would expect sometime this week they take a step back to early January. Feels like on Friday they artificially jumped them to late January to set expectations low. Any lead times after Dec 1 suggest we are off to a good start, even with the limited production.Source: Gene Munster