sport football: 📊 Tesla's Auto Sales Plunge

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Happy Sunday.

People say saying "thank you" costs nothing. But when it comes to AI, it actually does.

OpenAI's CEO recently said that users adding "please" and "thank you" to prompts is costing the company tens of millions of dollars.

While that sounds steep, it could be a small price in the grand scheme of things.

OpenAI now projects its revenue could reach $174B by 2030.

The company also reportedly expressed interest in buying Chrome if Google is forced to divest it.

If a deal ever happened, it would instantly give OpenAI one of the most valuable internet platforms in the world.

Some key data bites from this week that you should know:

Morningstar put together a list of 12 undervalued tech stocks.
Gold could rally to $5,000/oz due to Chinese demand.
Intel will cut over 20% of its staff.
Warren Buffett now owns 5% of all US Treasury bills, more than the Fed.
Big US Banks have built up $1.3T in capital to withstand market turmoil.
Tesla Short Sellers have made $11.5B from this year's decline.
EU fined Apple and Meta combined fees of nearly $800M.
U.S. slaps tariffs up to 3,521% on solar imports from Southeast Asia.
19 Richest U.S. Households saw a $1T wealth increase in 2024.
Regulators approved Capital One's $35B takeover of Discover.
Gucci Sales fell 25% in Q1.
Jane Street saw a record $20.5B in net trading revenue in 2024.
Swiss Pharma Giant Roche is investing $50B in US over next 5 years.
Boeing is selling some of its digital businesses for nearly $11B.
Elon Musk's Neuralink is planning to raise $500M at an $8.5B valuation.

In today's newsletter:

🪫 Tesla's Auto Sales Plunge
◽️ Zyn Growth Is Exploding
🛟 Google Is Far From Dead
📈 ServiceNow Has Been Unstoppable
🌯 Is Chipotle Losing Its Sizzle

Let's jump right in.

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Tesla had a brutal quarter, but shares still jumped 24% this week.

Why? It all came down to expectations.
After falling nearly 40% earlier this year, many investors had already priced in the bad news.

Here are some of the key figures for Q1 2025:

Adjusted EPS: $0.27 (-40% YoY) vs. $0.39 Est.
Revenue: $19.34B (-9% YoY) vs. $21.11B Est.
Total Automotive Revenue: $14B (-20% YoY)
Energy Generation & Storage Revenue: $2.7B (+67% YoY)
Operating Income: $399M (-66% YoY)
Operating Margin: 2.1% (-343 bps YoY)
Cash & Cash Equivalents: $37B (+38% YoY)

Among several tough numbers, the company saw its lowest quarterly revenue in three years.

The numbers show that while Tesla is pursuing ambitious projects, from robotaxis to humanoid robots, it still faces the same core pressures as traditional automakers.

The company also flagged that evolving trade policies are creating global supply chain uncertainty and could impact costs.

There were a few areas of light for the company though.

Elon Musk said he plans to spend significantly less time focusing on DOGE.
Additionally, the White House announced plans to loosen rules on autonomous vehicles, potentially opening new opportunities.

Philip Morris lit up a new cash cow.

The booming popularity of its Zyn pouches helped propel the company to all-time highs.

For Q1 2025, earnings came in at $1.72, beating the $1.61 estimate.
Revenue rose 6% to $9.3B, ahead of the $9.14B expected.

Zyn shipments crossed 200M cans, a 53% increase YoY.

Volume growth also surged, rising by 37M cans QoQ, well above previous trends.

Thanks to the strength of its smoke-free business, Philip Morris raised its full-year earnings guidance.

Adjusted EPS is now expected to hit $7.43 at the midpoint, up from the previously announced $7.11.

The stock is now up roughly 80% over the last year.

Since the rise of AI, many predicted it would be the end of Google.

But based on the company's latest earnings release, that narrative looks far from reality.

Here are some key figures from Q1 2025:

EPS: $2.81 (+49% YoY) vs. $2.01 Est.
Revenue: $90.23B (+12% YoY) vs. $89.12B Est.
YouTube Ad Revenue: $8.93B vs. $8.97B Est.
Google Cloud Revenue: $12.26B vs. $12.27B Est.
Cash and Equivalents: $95B

Overall, the company continues to deliver solid results in a challenging environment.

One notable highlight was an $8B unrealized gain tied to its investment in SpaceX.

Excluding that, EPS would have come in at $2.27 per share, still comfortably above estimates.

While YouTube slightly missed expectations, it continues to grow steadily as it celebrates its 20th anniversary.

Analysts estimate YouTube alone could be worth up to $550B as a standalone business.

In other good news, shareholders were rewarded with a 5% dividend increase and a $70B share buyback authorization.

Despite the strong report, shares remain down 15% YTD.

Google continues to be one of the cheaper names among the Magnificent 7 on an earnings multiple basis, largely due to antitrust risk.

ServiceNow just reminded Wall Street why it is one of SaaS's most dominant players.

Shares of the cloud computing giant jumped 24% this week following a strong quarterly report.

For those unfamiliar, ServiceNow offers a platform that helps automate IT operations and business workflows.
Led by CEO Bill McDermott, the company has quickly grown into one of the top players in enterprise software.

Here were some of the key figures for Q1 2025:

Adjusted EPS: $4.04 vs. $3.83 Est.
Revenue: $3.09B (+19% YoY) vs. $3.08B Est.
Current Remaining Performance Obligations: $10.3B (+22% YoY)

The company also raised its full-year subscription revenue guidance, now expecting $12.65B at the midpoint, slightly ahead of estimates.

McDermott noted that ServiceNow has been in promising discussions with DOGE to help streamline the government's operations.

Burritos are not immune to a consumer slowdown.

Chipotle reported its first comparable restaurant sales decline since 2020, with same-store sales falling 0.4% in Q1 2025.

This was well below analyst expectations of 1.7% growth.

While the company beat adjusted earnings estimates at $0.29 per share versus $0.28 expected, revenue missed forecasts.

Revenue rose 6.4% to $2.88B, falling short of the $2.95B estimate.

CEO Scott Boatwright cited poor weather and weaker consumer spending as key factors behind the results.

The company also trimmed the top end of its full-year same-store sales growth outlook.

Still, management expressed confidence they can return to positive transaction growth by the second half of the year.

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🏛️ Congress Crackdown. Trump said he'd sign a bill banning stock trading by Congress - BB

🇮🇳 Production Pivot. Apple is planning to move away from China and build most of its US iPhones in India by end of next year - FT

🤖 Relentless Demand. Amazon and Nvidia executives said AI data center demand is not slowing down - CNBC

💸 Subscription Scandal. FTC sued Uber for deceptive billing practices with the company's Uber One subscription - CNBC

☁️ Cloud Alliance. Google and Palantir have partnered to bring Google Cloud to FedStart - GOOG

🔥 Trade Turmoil. Ken Griffin said Trump's trade war has thrown off business leaders' plans to focus on growth - BB

Courtesy of our paid partner, EarningsHub.

Notable Companies Reporting Earnings Week of April 27, 2025:

I use EarningsHub to track earnings, estimates, and receive AI summaries of investor calls.

If you'd like an all-in-one earnings tool and see all other companies reporting, I definitely recommend you check it out!

View Full Calendar Here!

Major Trades Published 4/21 - 4/25. Trades may be those of family members. [Source: 2iQ]

Buys

Dave McCormick (R)
- Company: Bitwise Bitcoin ETF ($BITB)
  - Amount Purchased: $115K - $250K

Sells

George Whitesides (D)
- Company: Innoviva ($INVA)
  - Amount Sold: $300K - $600K
- Company: Microsoft ($MSFT)
  - Amount Sold: $250K - $500K

Major Trades Published 4/21 - 4/25

Buys

Triumph Financial ($TFIN)
- Insider: Carlos Sepulveda (Director)
  - # of Shares Purchased: 6,765
  - $ Amount: $322,285
  - SEC Forms: [1]
Ally Financial ($ALLY)
- Insider: Russell Hutchinson (CFO)
  - # of Shares Purchased: 8,200
  - $ Amount: $252,682
  - SEC Forms: [1]

Sells

Airbnb ($ABNB)
- Insider: Joseph Gebbia (Director)
  - # of Shares Sold: 214,285
  - $ Amount: $24,476,145
  - SEC Forms: [1]
Autozone ($AZO)
- Insider: Domingo Hurtado (Sr. Vice President)
  - # of Shares Sold: 4,800
  - $ Amount: $17,568,000
  - SEC Forms: [1]

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