Investor's Corner
Tesla (TSLA) drops in the aftermath of Q1 earnings: Here’s Wall St’s take
Tesla stock (NASDAQ:TSLA) experienced a 3% drop on Thursday’s intraday as the electric car maker felt the aftermath of its Q1 2019 earnings. The company posted a loss of $702 million or $4.10 a share in the first quarter, which is almost comparable to Q1 2018’s loss of $4.19 per share.
Tesla CEO Elon Musk and the company’s executives explained during the Q1 2019 earnings call that the company’s lower-than-expected performance was due to one-time items and circumstances such as delivery delays for the Model 3 in Europe and China. With Tesla back in the red, here is what Wall Street analysts are now saying.
Wedbush analyst Daniel Ives, a longtime TSLA bull, downgraded Tesla from “Outperform” to “Neutral” while adjusting his price target for the company from $365 per share to a far more conservative $275 per share. Ives also penned a scathing note on Thursday, calling Tesla’s Q1 results as one of the “top debacles” Wedbush has ever seen, and criticizing the company’s executives for their belief that demand and profitability will “magically” return in the coming quarters.
“In our 20 years of covering tech stocks on the Street, we view this quarter as one of the top debacles we have ever seen while Musk & Co. in an episode out of the Twilight Zone act as if demand and profitability will magically return to the Tesla story. Ultimately we believe the company’s guidance is aggressive and management/board is not taking aggressive enough cost-cutting actions and shutting down future endeavors to preserve capital and give a sustained path to profitability for the Street. We no longer can look investors in the eye and recommend buying this stock at current levels until Tesla starts to take its medicine and focus on the reality around demand issues which is the core focus of investors,” Ives wrote.
Ryan Brinkman of JP Morgan noted that a negative reaction was already expected considering Elon Musk’s previous comments about Tesla’s inability to turn a profit in Q1. Brinkman, who has an “Underweight” rating and a $200 price target on TSLA stock, also pointed out Tesla’s willingness to do a capital raise this year. “Management also seemed less opposed to an equity capital raise, acknowledging “some merit” to the idea, which in our view serves to highlight dilution risk that likely rises after 1Q cash flow and cash balance tracked weaker than JPM and consensus expectations. While 2Q deliveries guidance appears potentially aggressive, the full year outlook for 360-400K implies a further roughly +35% to +45% sequential increase from 1H19 to 2H19, further highlighting the execution risk entailed in meeting the figures that are implied needed to generate positive earnings and cash flow,” he wrote.
Joseph Spak from RBC noted that Tesla’s Q1 numbers were “uglier than expected,” while stating that a capital raise will likely be held this year. Similar to Brinkman, Spak reiterated his “Underweight” rating and $200 price target for Tesla stock. “Elon talked about putting Tesla on a ‘Spartan diet’ and while we don’t doubt the company spent inefficiently in the past, the low capex+R&D and of course the lower sales, are not hallmarks of a hyper-growth company, yet TSLA continues to be valued as one,” he wrote.
Evercore ISI analyst Arndt Ellinghorst also proved bearish on the company, expressing his reservations about Tesla in a segment of CNBC‘s Street Signs. The analyst was skeptical of the demand for Tesla’s vehicles, even noting that the Model S sedan and the Model X SUV are already starting to look “quite old.” “If you claim that demand is huge and unlimited then the key question is, why do you lower your mix? Why do you lower your pricing? I mean the S and the X are quite advanced in any normal life cycle of a product so they would really need a significant refresh in order to restore the pricing. The brand will be less exclusive than it has been in the past,” the Evercore ISI analyst said.
Not all analysts covering the company were bearish after Tesla’s release of its first-quarter results. In a note, Piper Jaffray analyst Alexander Potter opted to look into the coming quarters for a potential recovery, while pointing out that Tesla’s shortcomings in Q1 were the result of several factors. “Although logistical challenges—long with lower transaction prices—had an obvious impact on Q1 profitability, we think this was temporary,” analyst Alexander Potter wrote in a note. “Guidance implies a second-half recovery for both deliveries and margins, and this seems reasonable to us. The first quarter suffered from a particularly nasty combination of headwinds, including seasonality, a big buildup of non-US deliveries (negative for logistics costs and working capital), as well as the expiration of tax incentives in the United States,” Potter wrote.
As of writing, Tesla is trading down -3.35% at $250.00 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Elon Musk
Nvidia’s board meets on Jensen Huang, and Elon Musk already has an answer
Elon Musk says it would be an honor to hire Jensen Huang amid Nvidia turmoil.
Elon Musk says he would welcome Jensen Huang at one of his companies if Nvidia’s board decides to push out its longtime chief executive.
On Wednesday evening, the financial account ZeroHedge posted “Elon please hire Jensen” on X. Musk replied roughly two hours later: “That would be an honor.” Neither Huang nor Nvidia had responded publicly as of Wednesday night.
Musk’s reply came as Nvidia’s board met to decide Huang’s future. The Wall Street Journal reported that directors were preparing to oust him following reports of two extramarital relationships. One involves Alice Huang, a Singapore-based businesswoman whom U.S. intelligence officials reportedly believe was working for China’s Ministry of State Security. The New York Times separately reported a relationship with Kimberly Powell, Nvidia’s vice president of health care. Huang acknowledged being unfaithful in a memo to employees on Sunday but gave no details.
@zerohedge That would be an honor
— Elon Musk (@elonmusk) November 12, 2026
Under Nvidia’s bylaws, a majority of its 11 directors can remove the CEO with or without cause. Bloomberg reported that the board has been working with an outside firm on possible replacements and may name an interim chief, with CFO Colette Kress seen as the likely pick. Nvidia shares fell more than 8 percent in extended trading, according to CNBC, and the company is scheduled to report quarterly earnings on November 17.
Musk has more riding on Nvidia’s leadership than most tech executives. In August, he told investors on SpaceX’s first earnings call as a public company that it would build its AI infrastructure exclusively on Nvidia hardware, calling Vera Rubin “the best architecture.” SpaceX is also working with Nvidia on the compute payload for Starmind, its planned orbital AI constellation. In October, SpaceX said it had a binding commitment for a roughly $40 billion lease of Vera Rubin GPUs and related equipment, with the leases expected to begin in the first half of 2027.
The scale of that dependence is already enormous. On its Q3 call, SpaceX said it was bringing roughly 200,000 to 220,000 Nvidia GB300 GPUs online each month and expects 2.5 to 3 GW of nameplate compute by the end of the year. That buildout is now reaching new sites like the proposed $24 billion power plant and supercomputer campus at Starbase.
The relationship between the two executives also goes back nearly a decade. Huang has often told the story of personally delivering Nvidia’s first DGX-1 AI supercomputer to Musk in 2016, when no other customer wanted one. “Nobody wanted to be part of it, except for Elon,” Huang said on the Joe Rogan Experience last December.
Musk did not say what role Huang might fill, and his reply stops short of a formal offer. Huang co-founded Nvidia in 1993 and still owns about 3.6 percent of its stock, so any move to a Musk company would depend on whether, and how, he leaves the chipmaker he has run for more than three decades.
Elon Musk
SpaceX’s Anthropic deal has a catch, and Elon Musk just addressed it
Elon Musk says SpaceX’s Anthropic compute deal cuts both ways after Chamath floats higher prices.
Elon Musk pushed back on Sunday against the idea that SpaceX’s compute contract with Anthropic is a one way bet, after venture capitalist Chamath Palihapitiya argued the company could use a termination clause to charge the AI lab far more.
“It works both ways, of course. If compute becomes plentiful and cheap, SpaceX revenue will drop. No crying in the casino for either party,” Musk wrote on X Sunday evening, replying to a clip of Palihapitiya’s comments shared by AI commentator Rohan Paul.
On the All-In podcast released Sunday, Palihapitiya said either side can walk away from the agreement on 90 days’ notice. If data center supply tightens, he argued, SpaceX could exercise that option and bring the contract back at two to three times the current price, and Anthropic would have little choice but to accept. He called it “the kingmaking move,” according to BigGo Finance.
The clause itself is not new. SpaceX disclosed in its IPO filings in May that Anthropic would pay $1.25 billion per month for dedicated capacity at its Colossus clusters through May 2029, nearly $45 billion in total, with both companies able to terminate on 90 days’ notice, as Teslarati reported at the time. SpaceX’s later compute deals with Google and Reflection AI carry similar exit terms.
What has changed is the political backdrop. Palihapitiya’s thesis rests on incoming Democratic governors pulling tax incentives for data centers and slowing new construction. In Texas, Gov.-elect Gina Hinojosa campaigned on a moratorium on new data center approvals, and Deutsche Bank analysts warned last week that SpaceX’s Texas compute capacity could face delays. SpaceX and Tesla shares both fell after the midterm results.
A slowdown would favor companies that already own capacity. SpaceX acquired xAI in February and has been renting data centers to outside AI labs before the space is needed for Grok. At the Baron Investment Conference on Friday, Musk said SpaceX was “getting 50 billion a year for 35 billion dollar investments” and that it can bring a data center online in eight or nine months, compared to two and a half years for competitors. He also said SpaceX is tracking toward an annualized revenue rate above $100 billion in December, with a “best guess” of $500 billion by December 2027.
Musk’s reply points to the other side of the clause. Anthropic has signed large compute agreements with Amazon, Google and Microsoft, and if that capacity comes online faster than new construction slows, the AI lab would have its own leverage to renegotiate or leave. Musk has called Anthropic “obviously currently the leader in AI,” and it remains one of SpaceX’s largest compute customers.
SpaceX shares rose more than 2 percent in overnight trading late Sunday after closing Friday at $134.27, according to Stocktwits.
Tesla and SpaceX shares fell on Wednesday after Democrats swept both chambers of Congress. The decline stood out as broader market securities recovered and turned positive, while both of Musk’s publicly traded companies lagged.
CEO Elon Musk already joked about the unsuccessful campaigning for the Republicans, but now the new party will make pretty drastic changes to how it handles Tesla and SpaceX, and those companies will adjust their outlook.
Let’s take a deeper look.
Tesla ($TSLA)
Tesla shares traded lower during the regular session after Democrats secured both the House and Senate. The stock was down 2.32 percent at around 1:45 p.m. on the East Coast, trading at around $389.30.
The pressure is tied to more than the raw scale of Musk’s political spending, estimated at $450–474 million this cycle with roughly $224 million directed at Texas. In that state, Tesla now faces a Democratic governor and a Democratic senator after Gina Hinojosa unseated Greg Abbott and James Talarico defeated Ken Paxton.
The Austin Gigafactory, Robotaxi pilot programs in multiple Texas cities, and any related AI compute expansion sit under a new state executive who campaigned against certain corporate subsidies and floated a moratorium on new data-center construction.
Federally, Democratic control of key committees opens the door to deeper examination of Tesla’s autonomous-driving safety record, federal energy-storage and manufacturing incentives, and the national-security implications of any combination with SpaceX.
Investors are also weighing whether the company’s historically close alignment with the prior Republican leadership will invite slower permitting, additional hearings, or tighter rules on Full Self-Driving deployment.
For Tesla, the political shift adds near-term friction around state permitting and federal regulatory approvals for autonomy and energy storage. A potential merger with SpaceX may face slower review even if it proceeds.
Core growth drivers such as vehicle deliveries, energy deployments, and robotaxi rollout remain intact, yet the stock now carries a higher political-risk premium that could weigh on valuation until the company demonstrates workable relationships with the new Texas leadership and congressional majorities.
SpaceX ($SPCX)
SpaceX shares also declined in live trading on November 4 following the Democratic midterm sweep. The stock traded at $134.97, down 4.49 percent. The drop occurred even as broader indexes stabilized, highlighting a company-specific reaction to the election outcome.
Musk’s large contributions, concentrated in Texas races that both companies lost, place SpaceX’s Starbase launch facility and headquarters under a new Democratic governor.
At the federal level, Democratic control of Congress enables greater scrutiny of NASA, the Department of Defense, and other contracts that support a meaningful share of revenue, along with reviews of Starlink national-security uses and any Tesla merger. Analysts have noted that empowered committees can hold hearings and request documents on these relationships.
For SpaceX, the results raise the risk of delayed contract awards, higher compliance costs, and tighter constraints on AI and satellite infrastructure expansion, particularly in Texas where a data-center moratorium has been discussed.
A merger with Tesla could encounter political friction that slows integration of launch, connectivity, and autonomy capabilities.
While Starlink growth and launch cadence continue as primary drivers, the company faces a more contested path for federal funding and state-level operations, requiring management to rebuild ties with the new congressional majorities and Texas leadership to limit the overhang.
SpaceX hid behind another name in the Arizona desert, and now it’s going big
Nvidia’s board meets on Jensen Huang, and Elon Musk already has an answer
