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Tesla bull on Trump-Musk brawl: “Jaw dropping and a shock to the market”

It’s another “Twilight Zone” moment.

6/5/25 4:44PM

Tesla super-bull and Wedbush Securities equity analyst Dan Ives is, as always, quick draw McGraw with his reaction to this afternoon’s bizarre, highly public political breakup between the world’s richest man, Tesla CEO Elon Musk, and the world’s most powerful man, US President Donald Trump.

He writes:

“The quickly deteriorating friendship and now ‘major beef’ between Musk and Trump is jaw dropping and a shock to the market and putting major fear for Tesla investors on what is ahead. This situation between Musk and Trump could start to settle down and the friendship continues but this must start to be calmed down on the Musk and Trump fronts and it's not good for either side.
This feud does not change our bullish view of Tesla and the autonomous view but clearly does put a fly in the ointment of the Trump regulatory framework going forward. It’s another Twilight Zone moment in this Musk/Trump relationship which now is quickly moving downhill.”

Ives expounds on the idea that the “Trump regulatory framework” could be in jeopardy as a result of today’s events, saying investors are now concerned that it could “change the regulatory environment for Tesla on the autonomous front over the coming years under the Trump Administration.” (Translation: investors expected the administration to ease regulation of self-driving cars to Tesla’s benefit.)

This is the closest I’ve seen to someone on Wall Street laying out the rationale of many investors in so-called Trump trades — stocks like Tesla that soared after Trump won the 2024 election. One category of Trump trades, which includes Taser maker Axon Enterprise and deportation contractor and private prison operator GEO Group, were simply expected to generate more government business due to Trump administration policies.

But another set of companies were, in some cases, bets that personal, political, and/or financial connections with the administration could produce favorable outcomes in terms of government policy.

As I’ve said before, that’s a pretty decent definition of corruption. But just for the record, now that Musk has joined the resistance, it should go without saying that government efforts to punish him or his companies for public criticism of the president would also meet that description.

Tasha Matsumoto

Stocks eke out gains on hopes for a path forward for reopening the Strait of Hormuz

Stocks rebounded on news that Iran is drafting a protocol with Oman to “monitor transit” through the crucial Strait of Hormuz.

Matt Phillips4h

AI server cluster maker Penguin Solutions takes flight

Small-cap AI server cluster maker Penguin Solutions surged Thursday after posting better-than-expected Q2 revenue and profit numbers Wednesday after the close, along with an increase in full-year sales and profit guidance.

The company, which was known as Smart Global Holdings until July 2024, has positioned itself as a provider of “end-to-end AI infrastructure solutions.”

Its Advanced Computing division designs and sells computers, cabling, and cooling systems, the server racks and clusters of racks AI data centers need. Its other main division sells flash and DRAM memory products.

It’s a pretty small company, with a fully diluted market cap of just over $1 billion and roughly 2,900 employees, according to FactSet.

The stock is volatile. Penguin dove during last year’s tariff tantrum that followed “Liberation Day” in April. Then it turned tail and doubled through early October amid a surge of call options activity, which tends to reflect retail interest. From the October peak, it then plunged by about 50%, before Thursday’s renaissance.

For what it’s worth, call options activity in Penguin is pretty busy today, too — relatively speaking — with roughly 2,625 traded as of 1:15 p.m. ET. That’s the most since early January, when the company last reported quarterly numbers. The average volume over the previous 25 trading sessions is about 325 calls a day, FactSet data shows.

Penguin Solutions Stock Takes Off On AI Bolstered Outlook

The company, which was known as Smart Global Holdings until July 2024, has positioned itself as a provider of “end-to-end AI infrastructure solutions.”

It’s a pretty small company, with a fully diluted market cap of just over $1 billion and roughly 2,900 employees, according to FactSet.

Luke Kawa7h

Momentum returns to optics stocks as the release valve for AI optimism

Potentially imminent end to the war? Buy optics stocks.

Maybe not? Buy optics stocks anyway.

Effectively all the juice left in the AI trade is coming from optics (and memory) stocks. And the latter group is taking a bit of a breather today while the former continues to surge.

Shares of Ciena Corp., Lumentum, and Coherent are building on recent big gains and among the biggest gainers in the S&P 500 near midday, while Applied Optoelectronics is also surging on Thursday.

These companies all provide solutions that help information move around in data centers, and thus are key beneficiaries of the aggressive capex plans of hyperscalers. Nvidia has invested $2 billion apiece in Coherent and Lumentum in deals that also include purchase commitments.

Matt Phillips7h

Space stocks rip during a topsy-turvy day for the equity market

Satellite-services-from-space stocks surged Thursday after reports that Amazon is in talks to buy Globalstar, which provides voice and connectivity services from its satellite network. It also can’t hurt that the general mood around space is ebullient, following the successful launch of Artemis II on Thursday.

Planet Labs and ViaSat also soared on the news.

The gains for EchoStar — seen as a backdoor play at pre-IPO SpaceX exposure — and Rocket Lab were more muted, perhaps because a deep-pocketed competitor like Jeff Bezos getting serious about space services could complicate the plans of the two largest commercial space launch companies.

Rocket Lab and SpaceX see launch services as key to their aspirations of being major providers of voice and data services from low-Earth orbit satellites.

Tesla CEO Elon Musk’s SpaceX is the dominant provider of such services, and the early rumors on the company’s planned IPO — expected to be the largest ever — suggest the market is very excited about the prospects for the industry.

Elsewhere in the space stock world, Intuitive Machines — a maker of space infrastructure that provides services to NASA for lunar missions — also rose.

Globalstar surges after FT reports that Amazon is in talks to buy the satellite group

Rocket Lab and SpaceX see launch services as key to their aspirations of being major providers of voice and data services from low-Earth orbit satellites.

Elsewhere in the space stock world, Intuitive Machines — a maker of space infrastructure that provides services to NASA for lunar missions — also rose.

Hyunsoo Rim, David Crowther

Can Sandisk do the double?

The S&P 500 just had its worst quarter in years. Here are the biggest winners and losers.

Sandisk and energy stocks soared while software names sank amid a broad sell-off in tech stocks.

Balancing balls of different sizes on pink seesaws creating equilibrium