Investor's Corner
Wall St’s reaction to Daimler’s reduced earnings guidance highlights critical eye on TSLA
German automaker Daimler AG had a pretty tough Monday. Following an announcement on Sunday that it is cutting its 2019 earnings guidance over the effects of an ongoing diesel emissions scandal at Mercedes-Benz, the company’s shares declined 3.6% in Frankfurt. The carmaker has noted that it is currently facing a “high three-digit million” euro increase in charges related to the diesel scandal, which would likely result in its 2019 earnings being about the same as 2018’s.
Daimler’s diesel troubles were highlighted on Friday, when Germany’s vehicle authority, the Federal Motor Transport Authority (KBA), issued a forced recall against the automaker for allegedly using an illegal shut-off device for the diesel-powered Mercedes-Benz GLK 220. The KBA is looking to extend its investigation into the carmaker further, as the cheating devices were reportedly used in Daimler’s OM642 and OM651 engines, which are equipped in popular vehicles such as the Mercedes-Benz C-Class and E-Class. The initial recall currently covers 60,000 units of the GLK, though the number could be as high as 700,000 vehicles if it covers other vehicles using the OM642 and OM651 engines, according to German publication Bild am Sonntag.
Apart from the KBA investigation in Germany, Daimler has noted in its first-quarter earnings release that it is facing an emissions probe by the US Justice Department. The company is also facing a consumer-class action lawsuit in the United States along with Bosch, one of its suppliers, for allegedly conspiring to deceive US regulators. These could prove to be a stumbling block for the company, particularly as it attempts to breach the premium electric vehicle market with the Mercedes-Benz EQC, which is expected to compete against EV veterans such as the Tesla Model X.
Amidst these recent headwinds, Wall St. analyst Dan Ives from Wedbush Securities noted in a statement to CNBC that Daimler currently needs to perform a “balancing act” as it attempts to weather these challenging times. “This really handcuffs them a bit. It’s going to be a balancing act, they really need to hold investor’s hands on this, and the question is ‘Can they navigate these headwinds?’ It’s an arms race in the electric vehicle world right now,” Ives said.
The Wedbush analyst’s reaction to the developments at Daimler is quite compelling. The automaker’s challenges today are serious, yet Ives’ comments were quite restrained. Considering that the automaker is facing another diesel emissions scandal and a “high three-digit million” euro increase in charges that will result in reduced 2019 profits, the circumstances might very well handcuff Daimler more than “a bit.” Ives’ tempered response to the German automaker’s update ultimately stands in stark contrast with his reactions to Tesla. Following Tesla’s Q1 earnings call, which revealed yet another loss for the company, Ives practically bordered on the subjective, seemingly mocking Musk’s continued optimism in future quarters.
“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. As such, 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 in a note to Wedbush’s clients.
Following a leaked email from Elon Musk urging employees to cut costs, Ives also issued a note describing the electric car maker’s circumstances as a “code red situation,” adding that Tesla faces a “Kilimanjaro-like uphill climb” as it attempts to hit its profitability targets this 2019. Quite interestingly, Ives’ comments likely helped push TSLA stock down over 4% then, which was more than Daimler’s drop on Monday. It should be noted that none of these dramatic tones were present in Ives’ comments about the German automaker’s recent updates. This is quite ironic considering his colorful reactions to Tesla’s developments were rooted only in speculations, while Daimler’s current headwinds are the result of an actual investigation by Germany’s Federal Motor Transport Authority (KBA).
During Tesla’s annual shareholder meeting, several TSLA shareholders brought up the issue of the negative narrative and misinformation surrounding the company. Elon Musk noted that these misconceptions are distressing, though he admitted that he is at a loss as to how to change the negative narrative surrounding Tesla. For the electric car maker, perhaps the best way to address all the skepticism is to simply hit its self-imposed, ambitious targets, such as delivering over 90,000 vehicles to customers this quarter, or reclaiming profitability in the second half of 2019.
Disclosure: I have no ownership in shares of Tesla or Daimler, and have no plans to initiate any positions within 72 hours.
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Venture capitalist Chamath Palihapitiya has cautioned investors shorting SpaceX shares, drawing a direct parallel to the intense short-selling pressure Tesla faced in its early public years.
Responding to reports of elevated short interest in the newly public rocket, satellite, and AI company, Palihapitiya noted that similar dynamics played out with Tesla, where aggressive short sellers ultimately “went broke.”
SpaceX (NASDAQ: SPCX) went public on June 12, 2026, in the largest IPO on record, pricing at $135 per share. Shares quickly surged to an all-time high of $225.64 just days later, briefly implying a valuation exceeding $2 trillion. The stock has since retreated sharply amid valuation concerns, lockup expiration fears, and broader market dynamics.
By early August, it traded near $108–$125, representing a roughly 50 percent decline from the peak and bringing the market capitalization closer to the $1.5–1.7 trillion range. On August 4, shares closed up more than 9 percent at $125.33 ahead of earnings before facing pressure in after-hours and premarket trading.
Short interest has climbed dramatically. According to S3 Partners data widely cited in market reports, short positions reached approximately 219.3 million shares by late July, about 34 percent of the limited public float of roughly 640 million shares, and represented a notional value of around $24.6 billion.
Utilization of shares available to borrow hit 95 percent, with borrow fees rising. This level of shorting exceeded the dollar value of short bets against Tesla at the time and built rapidly ahead of two catalysts: the company’s first post-IPO earnings and an August 6 lockup expiration that could free up to 911.5 million additional shares.
CEO Elon Musk has issued warnings of his own. In mid-July, as short interest approached one-third of the float, he posted that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low,” reiterating his view that the company could ultimately be worth more than Earth if it achieves its goals.
On August 4, just before earnings, Musk responded to the latest short-interest data by saying, “I try to warn them, but they just double down.”
SpaceX delivered its first quarterly results as a public company after the close on August 4. Second-quarter revenue rose 92 percent year-over-year to $7.8 billion, beating consensus estimates near $6.8–6.9 billion.
The net loss narrowed to $541 million, or 9 cents per share, better than the roughly 23–24 cent loss expected. Starlink/connectivity contributed about $4.3 billion (up 66 percent), while the AI business generated $2.6 billion (up roughly 250 percent). Capital expenditures were heavy at $18.4 billion, largely tied to AI infrastructure. Management projected a $100 billion annualized revenue run rate by year-end 2026 and outlined a path toward $1 trillion in annual revenue by 2030.
The combination of Chamath’s historical reminder, Musk’s repeated alerts, and the company’s ambitious growth targets underscores the high-stakes debate surrounding SPCX. Short sellers are positioned for near-term supply pressure from the lockup, while long-term bulls point to Starlink scale, Starship progress, and AI compute expansion as reasons the bears may ultimately face the same fate as many early Tesla skeptics.
Investor's Corner
SpaceX and Nvidia team up on Musk’s orbital AI bet
SpaceX revealed a new Nvidia satellite partnership, then Musk pledged an exclusive Nvidia hardware commitment.
SpaceX and Nvidia are now working together on the hardware that will power Musk’s orbital data center ambitions. SpaceX announced on X on Tuesday that it is partnering with Nvidia to design the compute payload for Starmind AI1, the first satellite in a planned constellation built to run AI workloads directly in orbit. Each Starmind satellite will carry Nvidia’s Rubin GPUs and Vera CPUs, according to the post, which included renderings of the payload design.
The announcement landed hours before SpaceX’s first earnings call as a public company, where Musk went further, saying the company has committed to building its AI infrastructure exclusively on Nvidia hardware. “We think the Vera Rubin architecture is the best architecture. We think it’s the best AI computer, and we greatly value our close cooperation and partnership on many levels with Nvidia,” Musk told investors on the call,. “So we’re exclusive to Nvidia.”
Musk said SpaceX plans to deploy Nvidia’s Vera Rubin NVL72 rackscale system, codenamed Kyber, both on the ground and in space. He set a target of 2 gigawatts of compute capacity online by the end of this year, scaling to roughly 10 gigawatts by the end of 2027.
SpaceX’s newest Starmind will make earth data centers obsolete
Starmind has been in development since Musk confirmed the name in June, following an xAI trademark filing that tipped off the project before SpaceX made it official. The idea is massive in scope and instead of moving data down to ground based servers, satellites equipped with onboard processors and large solar arrays would compute AI workloads in orbit and beam results back to Earth. SpaceX has already filed with the FCC for a constellation of up to one million satellites to support the effort, citing constant solar power and the absence of zoning restrictions as advantages over terrestrial data centers.
The Nvidia exclusivity marks a shift in tone from just two weeks ago, when Musk was busy knocking down a report that SpaceX had ordered $52 billion worth of Nvidia GPUs through Foxconn, calling it fake news at the time. The dollar figure in that rumor may have been wrong, but the underlying direction seems correct. SpaceX’s AI division already leases Colossus compute capacity to Anthropic and Google, and Tuesday’s earnings report showed AI revenue climbing sharply as those deals ramp up.
Nvidia shares rose roughly 3% in Tuesday trading on the news, while SpaceX stock climbed nearly 9% during the day before giving back gains after hours as investors digested the earnings report’s capital spending figures.
SpaceX (NASDAQ: SPCX) reported a beat in revenues and EBITDA in its first earnings call report while also minimizing losses as its business continues to gain momentum.
After its IPO in July, SpaceX saw some tough losses on Wall Street due to a major selloff after a delay in its 13th Starship test flight. The ship launched later that week and completed what was arguably the most successful IFT operation in the Starship program’s history.
Nevertheless, the company is continuing on and reported some encouraging financials while also promoting what appears to be a robust outlook moving forward in its Space, AI, and Connectivity divisions.
SpaceX to report first-ever earnings today: here’s what to expect
Earnings Results
- Revenues: $7.8 billion reported vs. $6.7 billion expected
- Adjusted EBITDA: $3.5 billion vs. $2 billion expected
- Net loss of $541 million, an improvement of $467 million from net loss of $1.0 billion
Additionally, CFO Bret Johnsen had these comments:
“2026 has been a momentous year so far, and the second quarter demonstrated the true power of SpaceX. Revenue growth accelerated across all our business segments and we delivered strong operating leverage, with significant margin expansion led by our new AI compute agreements. Our unparalleled leadership in launch, Starlink subscriber growth, new enterprise and government partnerships, and best-in-class AI infrastructure underscore our ability to drive meaningful scale and deliver attractive returns. As a newly public company, we are delighted to welcome our broad base of shareholders and bondholders. We ended the second quarter with $100 billion of cash, cash equivalents, and marketable securities, and $47.5 billion in backlog. This financial strength gives us substantial capacity to invest in Starship, Starlink Broadband and Mobile satellites, and our AI platform, while maintaining a disciplined long-term capital allocation framework.”
Space Business Highlights
SpaceX shared some of its biggest Space Business Highlights for Q2:
- Space revenues grew 55% sequentially and 29% year-over-year to $962 million, driven by a higher number of large customer launches and a favorable customer shift compared to the prior year
- Total costs and expenses for the Space segment were up by $389 million year-over-year, as we continued to accelerate R&D investments in our Starship program, which we believe will reduce the cost to orbit by 99% or more relative to the historical average, and unlock significant revenue potential across all business segments
- Leading launch provider for the world with 78 launches and 1,041 metric tons of mass to orbit deployed over the six months ended June 30, 2026, primarily allocated to Connectivity for the deployment of our Starlink constellation
- Starship V3 development continued to advance towards full and rapid reusability:
- Completed Starship V3’s first suborbital mission in May, Flight 12, which achieved a successful lift off from our new Starbase pad, a precision landing of Starship’s upper stage, and deployment of modified V2 Starlink satellites
- Subsequent to the second quarter, completed Starship Flight 13 in July, which achieved all flight objectives including deploying 20 production V3 satellites, demonstrating in-space relight of a Raptor engine, and executing the softest ever splashdown of Starship, providing critical views of an intact heatshield
SpaceX will report its earnings today at 4:30 P.M. EDT.
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