Tesla snaps win streak, AI adoption may be muted: Asking For A Trend

Shares of Tesla (TSLA) recouped its losses from the beginning of the year after 11-straight days of gains, only to turn negative after reports of the company pushing back the unveiling of its robotaxi to October. In addition, Elon Musk’s xAI recently ended talks with Oracle (ORCL) for a potential $10 billion server deal to build out its infrastructure. As AI competition from Big Tech names like Alphabet (GOOG, GOOGL) and Microsoft (MSFT) heat up, can Musk’s new company keep up or will it eclipse them entirely? Deepwater Asset Management managing partner Doug Clinton joined the show to give insight into Musk’s abilities and the performances of his companies.

The so-called Magnificent Seven – Amazon (AMZN), Apple (AAPL), Alphabet (GOOG, GOOGL), Nvidia (NVDA), Meta (META), Microsoft (MSFT), and Tesla (TSLA) – had their worst day in about a year as many of these names closed the day in the red.

While AI is all the rage in boardroom meetings and earnings reports, actual adoption may not be as widespread as the impression the corporate world is giving off. Goldman Sachs found artificial intelligence adoption to be muted as companies are still exploring how to integrate large language models.

Lots of companies want to get into the weight-loss drug market. Portal Innovations Co-Founder and CEO John Flavin stopped by to discuss how venture capitalists are investing in the space.

For more expert insight and the latest market action, click here

Video Transcript

Hello and welcome to asking for a trend.

I’m Josh Flip in for the next half hour.

We’re going to be breaking down the trends of today that will move stocks tomorrow.

There’s a lot to keep track of.

So we’re focusing on what you need to know to get ahead of the curve.

Here are some of the trends.

We’re going to be diving into June’s cooler inflation, print boosting odds of a September rate cut good news, right?

But we’re not seeing much green markets.

Investors are pocketing their gains after a record string of all time highs, the S and P 500 rotating out of those big tech winners in the process snapping that winning streak.

Plus Tesla snaps its 11 day winning streak after a Bloomberg report that the ev makers long anticipated robo taxi event will be delayed to October.

But our next reminds us delays, often a part of the Tesla story and encouraging.

That’s how Pfizer described an early stage trial of its weight loss pill if successful.

So the drug could be a golden ticket for Pfizer which has thus far failed to successfully break into the rapidly growing G LP one market, we’ll discuss more with a biotech expert.

Story continues

Later in the hour, Tesla stock has been on a tear.

It’s 11 consecutive winning sessions helped the EV maker regain all of its lost ground so far this year until today, Tesla’s Robo Taxi event.

One of the drivers behind that stock’s recent run up has reportedly now been delayed by two months sinking the stock back into negative territory for the year.

Joining me now is Doug Clinton Deepwater Asset Management managing partner, Doug, it is great to have you on the show.

So let’s dive right into this headline, Doug.

So reportedly, uh maybe Elon Musk thinking of delaying this Robo Taxi event.

Doug to October in your opinion, you you know this company so well, big deal, no deal.

How do you see it?

Doug Josh, the first thing I would say is nothing is official in Tesla land until you hear it from Elon himself because what sort of led to this event in the first place was a Reuters report several months ago that the model two was going to be canceled.

Elon said that that is false and then he followed up saying that we’re going to have a Robo taxi event in August.

We haven’t seen Elon tweet anything yet.

I just checked before we jumped on near her.

He hasn’t said anything about the event yet.

So who knows what could happen?

But let’s say that the event is delayed in fact to October in my view, what the stock has been doing more recently is it’s been reflecting the hype and the excitement that investors are having for Tesla and what might come in terms of this Robo Taxi and what that ultimately might mean for the model and Tesla more than any of their stock is such a powerful religion.

And I think that investors as they see these new products coming, not just the Robo Taxi in October, but probably a few new vehicles as well.

I think people are starting to figure out what could this mean to our models and they were sort of front running potentially some changes in terms of how analysts and investors think about that business.

And Doug, we, we talk about Robotaxis though, I mean, it’s such a, it’s such a long term goal in some sense, Doug, I mean, wouldn’t it be AAA very long time before you would see any, you know, real meaningful financial impact from that?

I do think that’s, that’s probably realistic.

And it’s funny, I mean, going into the event actually given Tesla’s track record but also just what they do.

I mean, they solve really hard physical real world problems and they’re maybe one of the best companies in the world at it, but often their timelines are a little bit optimistic, they often miss their timelines.

It’s just a normal thing with Tesla going into this event.

I sort of assumed whatever date they put on their launch of the Robo Taxi, you might want to add 6 to 12 months to.

And then if you think beyond that to the point of your question, Josh, when does it actually start impacting the model?

Tesla has a really large business already in terms of selling cars, they obviously have several 100,000 FSD subscribers as well.

And so the Robo Taxi business would have to get to a pretty decent scale to really start having some impact, meaningful impact on the model.

So I think we could still be in a situation where even if the Robo Taxi launches, let’s say late next year or early in 26 the real impact of the model might still be a few years beyond that.

Even investors will start to discount some of that into the model, but we will have to be patient before seeing real numbers in it.

I’m also Doug Well, I’m curious what I have just switch gears a little bit.

Get your take on Xa I, I’m just curious.

So this is Musk um A I start up.

I’m just as you think about that Doug that A I start, what is, what is Musk up to there?

What do you think his objective is?

Um you know, what’s he trying to achieve?

He does have he got, he’s got a lot of data at his disposal.

Doug, he does and deep water in full disclosure is an investor actually in Xa I, you are that Doug?

That’s interesting.

Why, why did you invest, we share the vision that I think that Lan has kind of proposed for what Xa I is all about, which is sort of to be this maximally truth seeking A I and to be maximally truth seeking, I think you have to really have a deep respect for figuring out, you know, the sciences, figuring out physics.

And if you think about who in the world has done the most to uh figure out things physical problems, like we just talked about, it’s Tesla, it’s spacex and it’s Elon.

And so I think he’s probably in a different and more unique position than some of these other companies like a Google, like an open A I who are great in the digital space, but they’re sort of amateurs in the physical space.

I think that’s where the real opportunity is for Xa I and finally Doug, um I’m just interested to get your take on another big name which like Tesla has had a nice run here, Apple.

Um You know, we’re getting ready for Tim Cook to take the stage.

Doug in September.

That’s when you would expect him unveil that next iphone and Bulls are, they’re optimistic, Doug, they think, listen, this A I enabled iphone.

It is, it is gonna jump start a meaningful upgrade cycle.

Is that how you see it?

Doug Apple is up 10% since that A I event in June.

And I think the reality is this, we’ve seen some reports recently that Apple is potentially thinking about orders for the new device, the iphone 16, about 10% higher than what they did last year with the 15.

And just to put that into context, Apple has been sort of down single digit, mid single digits year every year in terms of total revenue, which is largely reflective of the iphone for the past several quarters.

So if we go from down kind of mid single digits to potentially up 10% year every year, I do think that that’s probably a meaningful inflection for apple.

And I think it’s probably higher than where the street is at in terms of numbers for the model.

I think it’s all about.

Can they deliver on the promise of making a I ultimately simplistic and usable for the average person?

And again, they might be the only company or the best company in the world to pull that off.

Doug.

Always great to have you on the show.

Thanks so much for taking the time to join us.

Thanks, Jos Y Finances.

Jared Blick joins us now with more on the trading takeaways.

Jared.

What a day?

I’m gonna show you the mag seven just got a beat down.

I’m gonna show you how bad it was and then we can have a conversation about what the future holds.

Uh just to rattle off some statistics and this is, uh, some of the largest stocks in the world you see in video, they’re down 5.5% by the way, that was not the worst showing today.

Some of the stats get pretty bad for the mag seven overall.

This was the worst day in a year.

You’d have to go back to July of last year to find at all that red Tesla snaps an 11 day winning streak, uh, worst day since January 25th, second, worst day of the year.

Apple snapping a seven day streak, worst day since March 21st.

Anyway, it goes on and on and you can kind of see where this is going.

So the bull market’s over, we throw in the towel last one out.

They, they turn on, I’m gonna go home right now, but let me show you what’s not true.

It’s not true.

Um There is some green on the screen, not just Bitcoin, look at Berkshire halfway up 1%.

What is Berkshire?

Ok.

They own Apple as their biggest position, but that’s a value firm.

Look at Exxonmobil energy in the green today.

I’m gonna show you something that gets me really optimistic here and that is the Russell 2000.

That was such an interesting move to show you the day.

This is what the Russell 2000 did.

It gapped up and it just went higher on the day.

3.5% on a day when the NASDAQ 100 is negative by 2.24%.

I ran the stats the last time that we had the NASDAQ 100 under 2%.

And the S and P or excuse me, the Russell 2000/3 percent happened one time in history and it was November of 2020.

And let me just show you a five your chart.

So you can see where that was.

This is a NASDAQ 100.

I want to show you the Russell 2000 boom.

It was right on there right before liftoff.

So this gets me to thinking, you know, the Russell 2000 has been stuck in this sideways range for quite some time.

Is this finally the catalyst, this friendly inflation report that it was needed to propel it to new heights.

I’m going to argue that all of this rotation, we’re calling a rotation for a reason.

People were overly invested in mega caps because they were scared.

This is kind of a safety play, believe it or not.

And they have sold and they are investing in the rest of the market.

So I think when they booked a little profit redeployed, I think it’s a healthy move here.

So I actually am bullish on small caps going forward just because of this one day price action subject to immediate reversal if I see something different happen.

But that’s the way that’s the way it works.

Modern tech.

Now, this is a big picture statement is greater than the.com era tech.

Uh We just had Ed Yardeni on the show.

Uh This is one of his charts, this goes back to the mid nineties and this shows uh in purple, this is if you take the tech sector market capitalization plus communication services.

So you wanna get some of the uh telecom or you wanna get alphabet and meta even there, even though they didn’t exist back then.

Um That’s the way that he’s constructing this.

So you have the tech and the tech ish down there.

They surpassed 40% of the S and P five hundreds market cap right now.

It’s at 42%.

And so everybody says, all right, we saw what happened back in the.com.

Is that going to happen?

How does this end?

All right, 25 years ago.

That pretty bad.

Exactly.

And what I do like about this is I look at Ford earnings so the Ford earnings share, uh as a percent of the S and P 500 for tech back then was only about 20%.

Look where it is now.

It’s much higher.

That’s because earnings are supporting this greater, this higher move in the share prices of the tech stocks.

I showed this, this chart a couple of days ago.

This is just S and P 500 earnings expectations.

They are now at a record and what you want to see is they have done nothing but increase since we saw this bull market began going back to this chart.

That’s what happened in here.

So I think that the earnings the gas in the tank is enough to support a higher move.

Third final Jared Blick take.

This is cash on the sidelines.

Hold on uh cash on the sidelines.

This is I get a record more from Ed Yardeni.

This is uh this is $2 trillion for retail alone.

Institutional plus retail is six trillion.

Now, when the fed starts lowering its rates, guess what happens to money market fund rates, they go down too in, locked up in real time.

All that money.

Well, some of that money could move off the sidelines like it’s done many times before.

Rate cuts are always good, Jared.

You know, rate cuts are, that’s not true.

The thing is if you get, if you get um, a rate cut in response to this market moving calamity where recession is finally getting priced.

And that’s another, that’s another story, but that’s not what we’re dealing with right now.

We’ll say that for another takeaway, Jared.

Thank you.

Killed it as always.

Thank you.

Coming up.

There’s big money in G LP wants and Pfizer wants a piece of the weight loss drug pie.

More.

Asking for a trend on the other side killed, it killed it.

Pfizer says it will proceed with the once daily version of its weight loss pill.

The company among the many drug makers racing to grab a portion of the weight loss market potential.

This year alone, the US weight loss market is expected to grow another 4.3%.

That’s according to market data.

As interest in this space continues to rise.

More eyes are set on how to get in on the action here to discuss ways to navigate the shifting bio sector.

We have John Flavin portal innovations, founder and CEO along of course with Julie Fine Young finances, Julie Hyman John, it is good to see you.

So this this GOP one fight.

It it only continues to send me heat up John.

And of course, we’ve been focused on big big Pharma.

I’m I’m curious though John as a venture investor.

Are you seeing this trend, this theme that investors are, are so interested in?

Is it also playing out John in the start up space?

Absolutely.

You know, if you look at what’s happened in the G LP one space which by the way has taken several decades to play out, you know, dating way back to when G LP one was first cloned uh by Svetlana Muso, you know, way back when it’s finally coming to fruition.

And when we think about the stats in the market, 40% of Americans today are obese, the expected global market for obesity drugs by 2030 is is expected to grow to $100 billion.

And so the stats are showing that there’s a a major market need.

The science is moving in a direction that’s opening up opportunities to actually make a market impact for these patients that by the way have comorbidities like uh diabetes and other heart issues.

So we’re seeing uh a pipeline of about 240 companies that are either developing or are moving toward the market with obesity or cardiometabolic drugs.

We’ve got a partnership with Novo in place.

Um, and we’ve identified companies that we’d like to covet in that are all in that cardiometabolic arena.

So one company we like a lot that we’ve invested in directly is cus they’re developing a next generation pill that’s coming at a different pathway than G LP one but huge opportunity and a lot of capital going into that space, a lot of capital going into that space, John, is it coming at the expense of other areas?

Right.

Certainly in the public markets, we’ve been talking a lot about G LP ones.

There’s been huge investment in those publicly traded stocks.

Um I is that happening in the private markets as well and are other areas other treatment areas getting starved a little bit because of that.

No, I think, you know, you’ve got to look at the dry powder that’s been accumulating here in the past couple of years.

Uh both at the big pharma level and at the VC level.

So record levels of LP money going into biotech directed venture funds, uh over 25 billion just last year into fresh powder.

Uh just last week, uh flagship announced fund 83.6 billion going into 25 start ups.

Um That will be a uh an array of companies that go well beyond obesity, things that we see really getting a lot of focus and attention with dynamic science happening.

Um outside of the cardio metabolic space are neural, we’re seeing a lot of good companies um in, in that space.

And I think the, on the heels of the Eli Lilly news, uh with regards to their Alzheimer’s drug that got FDA approval showing 30% reduction um in in cognitive failures.

Uh for that uh class will be a gateway to many other companies that will focus in the Neurospace.

So companies like van working on Parkinson’s Venture back company here in Chicago, Namura um gate in in Indianapolis with the halo effect of what’s happening uh coming out of Eli Lilly.

And then lastly a lot going on in autoimmune disease, especially uh in areas like Lupus and, and, and also tech bio, you’re seeing a lot of A I focused and enabled science that I think will accelerate some of the work in these neuro drug programs.

And John, you know, another trend we talk about here on the show you won’t be surprised to hear is the mega trend of A I I am curious, John, how that technology is impacting and transforming your world.

You know, life science is investing.

Yeah.

Well, first, you know, from the aperture of the venture capitalists, um we have developed our own tool called star gaze, which is an A I enabled platform that can predict innovation and start to rank innovative uh inventors coming out of universities.

Remember the lifeblood of a of a new drug starts uh on the bench at a university um several years prior to it becoming a drug.

And so, um we’re using this tool to mine the universe to identify who’s working on what hot area of technology.

How do we get there first to make those investments and using the machine learning algorithm, we can use predictive biomarkers to who might be a promising up and coming scientist working on the latest cutting cutting edge science anywhere in the world, but certainly here in the United States.

Now, if you look at the locations in science, we’ve got a company here in Chicago, Tempus I I that went public a few weeks back precision medicine.

So using A I for accelerating, figuring out what drugs are gonna work with which patients in any kind of disease ranging from cancer to, to uh cardio metabolic diseases.

Um You’ve got other companies like Recursion Pharma out in Salt Lake City that’s applying uh tech bio and A I to identifying drugs in both neural and oncology.

Um That space is heating up very quickly and I think you’re gonna see, you know, strong benefits to what’s happening in that regard.

Lastly, really way out there in the future is quantum.

So uh believe it or not quantum is really starting to get applied to life sciences as well.

So the ability to simulate the drug discovery process and take shortcuts and accelerate going from a Petri dish all the way to a patient.

Um I’m really excited about what will happen in the next decade in that area as well.

A lot going on in a fast moving industry, John, thank you so much for joining the show today and walking us through it.

My pleasure, Josh and Julie, good to see you.

Stay tuned more.

Asking for a trend on the other side.

Everyone is trying to grab a piece of the A I boom but adoption among companies remains muted.

Yahoo Finance’s Julie Hyman joins me now with a closer look.

Yes.

And the chart of the day is a little busy.

It’s there’s a lot going on.

Do not be afraid.

I’m gonna walk you through it.

But before I do, I wanna tell you where this came from, it came from a new note out from Goldman Sachs, sort of a deep dive, including a couple of interviews into A I adoption and what investors can expect.

And the overall theme of the note was the perhaps expectations have gotten a little bit ahead of themselves.

One of the pieces of evidence that they cite is this data coming from Goldman Sachs and into the Census Bureau which talks about A I adoption.

How many firms of all sizes from small to the very largest are using A I in their operations.

And so one of the things I want to point out here, first of all is that this number right here is 30% of firms, none of them, none of these industries have gotten to 30% affirms using A I as of yet.

The one group that is using the most information is right around 20%.

6 months from now, that’s what this amber line goes out to six months.

The purple is from last October June 2024 effectively where we are right now is the blue.

And then when we get to in the next six months, is this sort of orange line, all industries which is sort of in the middle here isn’t even at 10%.

So the, the point is for all of the talk about A I, for all of the companies investigating whether they are going to implement A I.

There just aren’t that many that are using it today or even according to this particular estimate might be using it six months from now.

Josh carefully laid out there, Julie.

Now, what is the counter argument to that?

Well, one of the people who brought us one counter argument was our friend, Corey Johnson from the futur group who we talked to earlier today and he said, maybe we’re not framing it exactly correctly.

This is what he said, but I think that the, the Goldman Sachs vote again, it is very thought provoking.

But I think the one of the fallacies that, that the negative criticism in the note has is that the things that we do now with our computing will be the things that we do later with A I driven computing.

And I think that that’s just wrong.

I think it’s hard for us to imagine the things that we’ll be doing with A I.

So in other words, again, maybe the framing is incorrect, that there will be uh use cases for A I that we’re not contemplating right now.

But I still don’t necessarily think that the timing then is contradictory to what we have here.

It’s gonna take a while to figure out what he’s talking about.

All right, Julie, thank you so much.

Appreciate it.

And that is a wrap on today’s asking for a trend.

Be sure to come back tomorrow at 4:30 p.m. Eastern for all of the latest market.

Moving stories affecting your wallet.

Have a great night.