Dan Ives on Tesla, Apple, and Nvidia

Summary

In this segment, Dan Ives, global head of Technology Research at Wedbush, discusses how President-elect Trump's victory could significantly impact Tesla and the broader tech market. He highlights the potential for rapid advancements in autonomous vehicles, AI, and tariffs, particularly with China. Ives predicts that Tesla's valuation could soar due to these developments, driven by Musk's strategic relationship with Trump. He also touches on the political implications for other tech giants like Nvidia and Apple. The conversation explores the shifting landscape of tech policy, with Musk's involvement potentially unlocking trillions in value.

Takeaways

• 😀 Tesla's value could increase significantly due to a potential boost in autonomous driving technology, with some estimates suggesting a $2 trillion valuation within the next 12-18 months.
• 🚗 The push towards full self-driving (FSD) and autonomous vehicles is viewed as the most undervalued AI opportunity in the market today, with the potential to revolutionize Tesla's business model.
• 💡 Elon Musk's close relationship with President-elect Trump could accelerate the development of AI and autonomous vehicles, potentially unlocking trillions of dollars in value for Tesla.
• 🌏 Despite the geopolitical tensions, Tesla's expansion in China is expected to remain unaffected due to Musk's influence and potential carve-outs in trade deals, particularly regarding tariffs.
• 🤝 Musk is expected to have a strategic advisory role in Trump's administration, specifically around AI, technology, and trade policies, rather than taking a formal cabinet position.
• 💼 Having a direct connection to the White House is seen as advantageous for Musk, as it could help reduce regulatory challenges, particularly those surrounding autonomous driving and AI developments.
• 📈 There is potential for Tesla's stock to see significant growth, driven by the influence of Musk’s strategic position in the White House and the market’s optimism about Tesla’s future in AI.
• 🛸 The conversation also touches on how Musk's other ventures, such as SpaceX, may benefit from his increased proximity to the U.S. government and its policies on technology.
• 🖥️ Nvidia is positioned to benefit from Musk’s influence and the changing political landscape, potentially gaining more negotiating power for chips in China amidst ongoing tariff discussions.
• 🍏 Apple’s strategy in China, while facing risks, is expected to thrive due to its strong partnerships with local tech giants, which could help mitigate geopolitical challenges and benefit from future AI integrations.

Q & A

Why is the relationship between President-elect Trump and Elon Musk seen as a game changer for Tesla?

The relationship is seen as a game changer because it could accelerate Tesla's advancements in autonomous driving and artificial intelligence (AI). Musk's strategic position with Trump could lead to regulatory changes that benefit Tesla, particularly in AI and autonomous driving, potentially adding a trillion dollars in valuation to the company.

What is the significance of the autonomous driving technology for Tesla's future?

Autonomous driving, especially Full Self-Driving (FSD), is considered one of the most undervalued AI plays in the market. It could accelerate Tesla’s growth by 20-30% annually and add significant revenue, potentially transforming Tesla’s business model by increasing software penetration and adding immense value.

How could Tesla’s valuation grow in the next 12-18 months according to the expert?

The expert believes that Tesla’s valuation could potentially reach $2 trillion over the next 12-18 months, a conservative estimate if the company successfully executes its vision, especially with the influence of President-elect Trump and advancements in autonomous driving and AI.

What impact could tariffs and a trade war have on Tesla’s prospects in China?

While there is a risk of tariffs impacting Tesla, the expert suggests that Musk’s relationship with Trump could result in carve-outs for Tesla and Apple, potentially mitigating the negative effects of trade tensions between the U.S. and China. Musk’s political influence could ensure Tesla's growth in China despite a slowing demand for EVs.

Could Elon Musk take a more formal role in the U.S. government?

The expert does not foresee Musk taking a formal cabinet position, but instead suggests he may serve as a strategic advisor to Trump on issues related to AI, tariffs, and technology. This would allow Musk to continue running his companies while influencing key policy areas without the need to sell stock.

What role will Musk’s influence play in the regulatory landscape for Tesla?

Musk’s influence in the White House is expected to help reduce the regulatory barriers Tesla faces, particularly around autonomous vehicles. His strategic position will likely make it easier for Tesla to navigate regulatory challenges, unlocking significant value in AI and autonomous technologies.

What risk is there for Musk if his role in the White House becomes too demanding?

The expert acknowledges that Musk could face challenges balancing his multiple roles as CEO of Tesla, SpaceX, and other ventures with his influence in the White House. However, investors are likely to accept this, as Musk’s strategic involvement in the government is seen as beneficial for Tesla’s future.

How could the political dynamics between the U.S. and China impact Nvidia?

The political relationship between the U.S. and China is critical for companies like Nvidia, which plays a major role in AI development. Musk’s involvement in U.S.-China negotiations could provide Nvidia with more bargaining power when it comes to selling chips in China, ultimately benefiting the company’s growth.

What potential challenges could Apple face in its relationship with China?

Apple could face risks in its relationship with China, particularly if there are escalating tensions between the U.S. and China. The expert believes that Apple will need a strategic partner in China, such as Baidu or Alibaba, to help navigate these challenges and maintain its market presence.

How does Musk's involvement in the political sphere benefit the broader tech industry?

Musk’s involvement with President-elect Trump is expected to benefit the broader tech industry, particularly in terms of AI and tariffs. His strategic position provides a level of certainty and influence that helps tech companies navigate political challenges, potentially accelerating the growth of AI technologies.