​Don't let the recent downturn in the AI trade mislead you. The reality is that AI-powered service providers are struggling to keep up with demand, and AI infrastructure providers are unable to build capacity fast enough. All the potential that drove AI stocks higher in 2024 remains intact. At Deepwater, we continue to believe there are still 2–3 years left in this bull market, one that will ultimately end in a bubble burst.​

Tesla’s March deliveries missed expectations, down 13% y/y, largely due to brand damage and to a lesser extent production changeover. June will likely get worse before improving in September and we expect CY25 deliveries to decline 9%. However, CY26 is setting up to be a rebound year with 35% delivery growth driven by brand recovery, renewed EV demand, and a more affordable model. Longer term, the investment case continues to hinge on Tesla solving autonomy and scaling robotics.

Deepwater Frontier Tech Spotlight: Confluent Ticker: CFLT Market Cap: $7B Confluent is a software company that provides a real-time data streaming platform. This enables companies to stream, connect, process, and govern their data. What does this look like for customers? L’Oréal…

Modeling Tesla is getting progressively more difficult as they navigate this period of brand damage, increased investments, and macro uncertainty. On top of that, the company does not give detailed guidance. All of that said, we’re putting together our best guess on how the numbers shake out over the next couple of years. We expect CY25 revenue to be flat (vs. Street at +7%) and non-GAAP earnings to fall between $2.00–2.20 (vs. $2.74). In CY26, we expect revenue to grow 35% (vs. Street at 22%) and earnings to rise to $3.00–3.40 (vs. $3.76).

Deepwater Frontier Tech Spotlight: Vertiv Ticker: VRT Market Cap: $30B Vertiv is a global provider of power and thermal management solutions essential to the operation of data centers that are powering AI. As AI-driven workloads lead to exponential growth in…

This question comes at a time when Street estimates likely need to be revised downward. Following the expected reset on April 2nd, I estimate global demand for Tesla's will rise by approximately 1.5% over the next 12 months as a result of the new tariffs. While Tesla prices may inch up due to tariffs on auto parts, prices for other automakers are expected to increase even more—making Teslas relatively more affordable compared to the competition.

Jensen Huang’s keynote reinforced that Nvidia’s product roadmap remains years ahead of AMD and custom silicon. He also provided further support for his recent earnings call comments, emphasizing that the AI infrastructure buildout is still in its early stages. However, the optimistic outlook was met with some skepticism, as investor focus shifts to the next critical datapoint on the health of the AI trade: hyperscaler CapEx reports due in late April. I continue to believe the AI buildout remains in its infancy, positioning Nvidia to be a multi-year beneficiary.