This video begins with a dramatic announcement of a "bloodbath" in the stock market, showing a "sea of red" with numerous major companies down.
**Market Performance Today:**
* **Nvidia, Apple, Google, Microsoft, Amazon, Meta, Tesla, AMD, Walmart, Visa, Mastercard, Intel** were all mentioned as being down during trading hours, with many falling further by market close.
* **Tesla stock** ended the day down "more than 14 and a half" percent (approximately 15%), losing over $50 per share and closing in the low $300 range.
* Tesla is noted for often amplifying overall market trends; when the market is down, Tesla is down more, and vice-versa.
* Over the past 12 months, Tesla is described as "essentially flat," technically down 3.87%, after a "bumpy ride" fluctuating between the low $300s, surging past $450, almost reaching $500, then collapsing, surging, and collapsing again.
* **SpaceX stock** "dodged the bullet today," up over two and a half percent, though it is still down "not far off 50 percent" from its recent all-time high. (Note: SpaceX is a private company, its stock performance mentioned here likely refers to private valuations or internal share movements).
**Reasons for Market Downturn (as reported on CNBC and discussed by Dan Ives of Yorkville Ives):**
* **Alphabet and Tesla** were highlighted as "two mega cap tech stocks... on pace for their worst day in more than a year," dragging down major averages.
* The primary reason cited was that "investors are just freaked out by their spending on AI."
* Dan Ives suggested that this fear is misplaced, viewing aggressive AI investment as a long-term positive. He stated that the "AI story is the future" for Tesla.
* Ives mentioned concerns about "capex investment for... physical AI when it comes to autonomous, when it comes to Optimus," noting that investors aren't seeing near-term results, leading to "gut check moment."
* Ives believes "patience is wearing thin" but maintains that we are "still in the third inning of AI revolution."
* The estimated spending on AI by these companies is **$1.3 trillion**. Ives argued that companies *must* spend on AI to remain competitive in this "arms race" and that not spending would be a "bigger mistake." He compared the current AI investment phase to "Vegas 1955 building the strip."
* **Intel reports after the bell today** are expected to be "all about the demand stories," particularly for chips.
**Speaker's Commentary on AI Investment:**
* The speaker strongly disagrees with the notion of investors panicking over AI spending, calling it illogical.
* He defines "investing" as allocating resources for future profit, and argues that companies investing aggressively in AI are pursuing "massive opportunities" for "enormous future financial returns."
* He introduces a friend's (obnoxious) theory that those panicking about AI investment are "not in fact an investor but either a retard and or a trader."
* He defines a "trader" as someone capitalizing on "short to medium term price fluctuations" and market volatility, unlike long-term investors. He notes that the letters in "trader" can be rearranged to spell "retard" as a joke.
* The speaker emphasizes that "super intelligence is becoming democratized," with costs plunging and intelligence increasing, making AI investment a critical opportunity. He advises everyone to use AI tools multiple times daily, or they are "fucking up."
* He believes investors (not traders) should be "over the moon" to see companies investing in AI infrastructure, tools, and data.
**Tesla and SpaceX Merger Discussion:**
* The possibility of a **SpaceX acquisition of Tesla** was raised by Dan Ives, who predicted an "over an 80 percent chance by the end of next year." (The speaker clarifies Ives' actual stated odds were 10% before Nov 2026, rising to 63% before 2028).
* The topic was brought up on Tesla's recent earnings call, where Elon Musk hinted at synergies but avoided direct comment due to "procedures."
* **Does a merger make sense?** The speaker says "unequivocal yes" due to numerous synergies:
* SpaceX scaling solar production for satellites.
* Tesla fitting Cybercabs and future vehicles with Starlink.
* Joint venture: the Cherifab project.
* Both companies needing access to AI compute.
* Macro hard project using Tesla vehicles as human emulators, megapods.
* Believed to benefit all shareholders of a new combined entity.
* **Shareholder Vote:**
* For SpaceX, it's "essentially already a yes" due to Musk's voting control.
* For Tesla shareholders, it's "much more of a question." The bar for approval is "extremely high," as non-participating votes are counted as "no."
* Institutional investors, virtue-signaling pension funds, and teacher unions might vote against anything benefiting Musk.
* The speaker believes there's a "pretty high chance" (above 50%) it will be put to investors but is "not exactly super confident" it would get approved, at least in the medium term.
* **Speaker's Personal Stance and Valuation Models:**
* He would "love to see this happen."
* He acknowledges the narrative of some Tesla investors who feel they'd be "fucked over" until Robotaxi scales massively and Tesla's valuation reflects it.
* Based on his 20-year valuation models for both companies (which he will release on Patreon), he believes **SpaceX has a "much higher probability of being a much more valuable company than Tesla over that 20 year timeframe."**
* **Tesla's future valuation:** Depends heavily on Optimus scaling (potential to "dwarf everything else" but uncertain), and Robotaxi, which has been "slower than I expected."
* **SpaceX's future valuation:** More predictable, with components like:
* **Starlink:** Described as the "money printer of money printers," expected to exceed 100 million combined monthly subscribers (home broadband and cell service), potentially reaching "hundreds of millions." Starship will enable a "20 times increase in bandwidth per Starlink launch," leading to 20x user growth.
* **AI Compute Business:** SpaceX's unique ability to deploy "massive amounts of compute into orbit via Starship" makes orbital AI compute "meaningfully more affordable than Earth-based." Demand for intelligence/AI compute is "near infinite for decades to come." The speaker believes this business alone "could eventually print more money than Tesla's entire successful fully scaled absolutely maxed out robotaxi business," because robotaxi has an upper limit (population x miles), while intelligence demand is limitless.
* He concludes that most Tesla investors haven't modeled SpaceX and thus wouldn't understand the potential value, leading to a difficult approval process for a merger.
**Final Commentary:**
* The speaker suggests the market downturn was broadly impactful, amplified by Tesla.
* He believes concern over AI investment is more likely from traders seeking short-term profits than investors focused on long-term fundamentals.
* He mentions a meme that "SpaceX IPO'd recently down almost 50%, Tesla stock shit in the bed as well," summing up the market sentiment. (As noted, SpaceX is a private company).