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Gene Munster, Brian Baker
Salesforce’s AI Message is Resonating with Investors
The AI trade still has room to grow as the spotlight gradually shifts toward software, underscored by investors' reactions to Salesforce's comments following their most recent quarter. The bottom line is I believe that while software companies have yet to see significant AI-driven revenue acceleration, investors are increasingly confident that day will come. This is good news for my view that AI will continue to be the catalyst driving the market higher, until it eventually bursts.
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Artificial Intelligence
Gene Munster, Brian Baker
Tesla’s Two Ridesharing Business Models Come More Into Focus
The odds of Tesla successfully capitalizing on autonomy increased with the news that Trump's transition team is planning to make regulating self-driving vehicles a top priority. Tesla holds a unique position, as it can pursue autonomy through a combination of two business models: asset-light, focusing on vehicle hardware sales, or asset-heavy. I believe these strategies could significantly boost Tesla's operating profit by the end of the decade, with a wide range of potential outcomes—anywhere from a 10% to a 155% increase, depending on which model they pursue. My prediction: by 2030, autonomy will account for 40% of Tesla's operating income.
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Autonomous Vehicles
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Ridesharing
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Tesla
Gene Munster, Brian Baker
Waymo’s Too Small For GOOG Investors Today, Overtime That Will Change
Today, Waymo alone is too small for Alphabet investors to care about. However, the management team is sharing more about their rapid progress, plans to expand operations, and has raised additional outside capital. I've modeled the business and found it to be surprisingly attractive. I believe Alphabet will spin out Waymo in the next 2-4 years, with a potential valuation of $350B to $850B by 2030, which could add between 12-28% to GOOG's current market cap, depending on Alphabet's ownership percentage.
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Google
,
Ridesharing
Gene Munster, Brian Baker
What a Trump Presidency Means for Tech Investing and AI
The Nasdaq was up about 5% this week following the election, versus the Mag 7 up 7%. Below I outline what I believe to be the reasons for the move and what it means for tech investors over the next…
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Artificial Intelligence
,
Markets
Gene Munster, Brian Baker
The ‘Is Tesla a Tech or Car Company?’ Debate Is Over
On the surface, the waiting game will continue for TSLA investors as the Cybercab and Optimus are still years away. Beneath the surface, the "We, Robot" event posed a challenge for traditional automakers as Tesla showcased an innovation edge that puts an end to the "Is Tesla a tech or car company?" debate.
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Autonomous Vehicles
,
Ridesharing
,
Tesla
Gene Munster, Brian Baker
The FSD Waiting Game Is Worth the Wait
I’ve had a week to process the “We, Robot” event, including conversations with several industry players and am left with 4 takeaways. 1) The world needs autonomy. 2) It’s going to take longer than I thought to get there. 3) Once the Robotaxi fleet is nationwide, it could add +20% to Tesla’s operating income. 4) Tesla's biggest opportunity lies in unsupervised FSD driving more consumer sales.
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Autonomous Vehicles
,
Ridesharing
,
Tesla
Gene Munster, Brian Baker
“We, Robot” Event Preview
Tesla's "We, Robot" event is Thursday, October 10 at 10p ET. The two key topics orbiting the event include the number of vehicles they'll announce and timing of production. I'm looking for 3 vehicles (most are expecting two) and I believe we'll only hear production timing on the Model 2, which I expect to begin late in 2025. This timing is a few months later than what Elon's comments suggested on the June earnings call. The one wild card could be the more affordable Model 2 is actually a stripped down Model 3, which would be viewed as a negative by investors.
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Autonomous Vehicles
,
Ridesharing
,
Tesla
Gene Munster, Brian Baker
Updated EV Adoption Estimates
This note provides Deepwater’s updated timeline of EV adoption in the United States. Previously, we had estimated that by 2030 50% of new car sales in the US would be fully electric. We now believe by 2030 only 25% of new car sales will be EVs. We expect the industry to cross the 50% threshold between 2035 and 2036. As for Tesla, we're expecting total 2030 deliveries of 4.5m, compared to the Street at 3.6m (FactSet).
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Autonomous Vehicles
,
Ridesharing
,
Tesla
Gene Munster, Brian Baker
Smart Glasses Opportunity Bigger Than Spatial Computing
Meta and Google are shifting their development focus away from Virtual Reality (VR) and Mixed Reality (MR) to ambient computing in the form of smart glasses given the potential that artificial intelligence adds to the form factor. I believe the annual market for smart glasses will reach hundreds of millions of units over the next decade, leading Apple to refocus its Spatial Computing initiatives to be more in line with Meta and Google wearables.
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Apple
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Artificial Intelligence
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Google
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Meta
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Spatial Computing
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Virtual Reality
Gene Munster, Brian Baker
Can AI Predict the Future?
We asked Gemini, ChatGPT, Claude, and Grok 15 questions about upcoming events to determine which models are most effective at looking into the future. This note is centered on “predictions” in the balance of 2024, which we’ll cover as they…
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Artificial Intelligence
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Google
,
Twitter
Gene Munster, Brian Baker
AI Benchmarking: Evaluating Model Performance on Subjective, Complex, and Predictive Queries
We tested ChatGPT, Gemini, Grok and Claude to determine which models provide the most clear and accurate responses. Our theory is not all foundation models are created equal. The two takeaways from our first benchmarking are: first, there is no single best model; certain models are better at handling specific queries. Second, there generally are two model "personalities"; with Grok as the only model with a distinct "personality". As for the what does this mean for search question: the answer is Google will win. What is most important for the future of ChatGPT, Grok, and Claude is their ability to allow third parties to create unique, deep, and conversational experiences that deliver insights beyond search. That doesn't exist today.
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Artificial Intelligence
,
Google
Gene Munster, Brian Baker
Apple’s AI Integration Will Boost Device Sales and Margins
Apple made good on expectations, announcing generative AI integration across its software and applications. Accessing these features will require 85% of Apple users to upgrade some or all of their devices over the next few years. This means revenue growth in FY25 and FY26 will likely be +10%, ahead of the current 6% and 4% expectations, which should be a positive for AAPL.
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Apple
,
Artificial Intelligence
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