Markets
markets
Matt Phillips

The right comp for Tesla stock is bitcoin

That’s one of the key takeaways from Barclays analyst Dan Levy’s attempt to make sense of Tesla’s vertiginous tumble over the last few days.

The stock — which, to be fair, is up slightly in early trading — has been pummeled in recent days as the air has come out of the postelection Trump trade that sent shares of companies with financial or ideological linkages to President Trump soaring.

Levy argues that the rally, which pushed Tesla up by more than 90% in the weeks after the November election, was never about any kind of fundamentals. In fact, Tesla, which is valued at a multiple of 145x its expected 2025 earnings, doesn’t really trade like a stock. It trades like bitcoin. He wrote:

“Bitcoin is the right comp: Tesla stock reflects many of the same ‘animal spirit’ factors that tend to drive Bitcoin (up ~50% post-election to mid-Dec vs. Tesla up ~90%) and other cryptocurrencies. This includes belief in future value that is underpinned by the potential for large-scale disruption (not just in Autos, but many of Tesla's ‘other bets’ such as robotics and AI), scarcity (the only public Elon Musk company), and to some extent Greater Fool Theory (the popularity of Tesla makes a strong case that the next generation of investors will be buying the stock for years to come).”

In other words, Tesla’s postelection rally was a speculative spurt of retail trading rather than a sound bet on the prospects of Tesla’s businesses. And, as Elon Musk deepens his immersion in right-wing politics and becomes increasingly associated with the Trump adminstration, those prospects actually seem to be looking worse and worse.

“Bitcoin is the right comp: Tesla stock reflects many of the same ‘animal spirit’ factors that tend to drive Bitcoin (up ~50% post-election to mid-Dec vs. Tesla up ~90%) and other cryptocurrencies. This includes belief in future value that is underpinned by the potential for large-scale disruption (not just in Autos, but many of Tesla's ‘other bets’ such as robotics and AI), scarcity (the only public Elon Musk company), and to some extent Greater Fool Theory (the popularity of Tesla makes a strong case that the next generation of investors will be buying the stock for years to come).”

In other words, Tesla’s postelection rally was a speculative spurt of retail trading rather than a sound bet on the prospects of Tesla’s businesses. And, as Elon Musk deepens his immersion in right-wing politics and becomes increasingly associated with the Trump adminstration, those prospects actually seem to be looking worse and worse.

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Tasha Matsumoto
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Large-caps waver ahead of next week’s Fed meeting; small-caps notch record close

Stocks are in a holding pattern as investors await tomorrow’s release of September PCE for further insight into next week’s Fed decision.

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Luke Kawa

Report: US senators plan to introduce bill blocking Nvidia from selling advanced chips to China for 30 months

US senators are on the verge of introducing a bill that would block Nvidia from selling its H200 or Blackwell chips to China for 30 months, the Financial Times reports. The H200 is Nvidia’s best chip from the Hopper generation, while the Blackwell line is its current flagship offering.

Shares of the chip designer are little changed in the wake of this report, still up more than 1% on the session. The reaction makes sense, seeing as previous positive indications on Nvidia’s ability to sell advanced chips to China failed to inspire much positive momentum in its shares.

The stock got a short-lived jolt higher (that didn’t last the day!) on November 21 after Bloomberg reported that the Trump administration had discussed the possibility of selling its H200 chips to China.

Nvidia has effectively been shut out of China’s AI market in 2025. First, export restrictions meant it could no longer sell the H20, a nerfed version of its Hopper chip, to the world’s second-largest economy. After that export ban was lifted, demand from China “never materialized,” per Nvidia CFO Colette Kress. Reports indicate that China banned its leading technology giants from purchasing these semiconductors, instead pushing them toward domestic alternatives.

President Donald Trump had mused about allowing Nvidia to sell Blackwell chips to China prior to his meeting with Chinese President Xi in late October, but failed to do so. The two leaders did not discuss the topic at that time.

Per the FT, this upcoming bill would be a bipartisan effort, being cosponsored by the leading Republican and Democrat members of the Senate Foreign Relations East Asia subcommittee.

markets
Luke Kawa

AI energy plays soar on an explosion of call buying

Like their quantum computing counterparts, AI-linked energy plays are benefiting from an explosion of bullish options activity on Thursday.

  • Oklo is up double digits with call volumes above 106,000 as of 2:46 p.m. ET, more than double its 20-day average for a full session, with a put/call ratio of about 0.6. Call options with a strike price of $110 that expire this Friday (which are now in-the-money thanks to today’s surge) are seeing the most activity.

  • Nuscale, another nuclear energy play, has seen nearly 140,000 call options change hands versus a 20-day average of 51,073.

  • And fuel cell company Bloom Energy has traded nearly 80,000 calls, roughly twice its 20-day average, with a put/call ratio of about 0.3.

During his appearance on Joe Rogan’s podcast released on Wednesday, Nvidia CEO Jensen Huang talked up the potential for nuclear energy, saying, “In the next six to seven years I think you are going to see a whole bunch of small nuclear reactors.”

This adds to the evidence that the speculative bid is back in a big way after smaller stocks tied to the AI boom and quantum computing cratered from mid-October through most of November as credit risk began to seep into the AI trade.

Old electronic items tossed on ground for disposal, Hudson

Technology giants don’t look like they used to, as the asset-light era fades

Oracle and Meta are now some of the most capital-intensive businesses in the S&P 500, spending more than energy giants. I guess data really is the new oil?

David Crowther3h
markets
Matt Phillips

Space stocks rip amid speculation on Altman joining race

Space stocks AST SpaceMobile, Planet Labs, and Rocket Lab all soared Thursday amid a recovery in the high-beta momentum class of shares coveted by some retail traders.

(High-beta momo stocks are basically shares that have been on a winning streak for a while, and tend to go up a lot more than the overall market on positive days. Goldman Sachs includes all three of the aforementioned space stocks in its themed basket of such shares.)

There’s little other fundamental news out there on the companies themselves.

But a Wall Street Journal report that OpenAI impresario Sam Altman has been toying with the idea of entering the space industry, potentially standing up a rival to Tesla CEO Elon Musk’s Starlink satellite service, may also be contributing.

As we’ve mentioned elsewhere, sometimes these stocks seem to trade on a what’s-bad-for-the-Musk-empire-is-good-for-us-and-vice-versa vibe.

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