Mad Hedge Technology Alerts!
It is a bad look for Tesla (TSLA) when every time you look at a TV and you see Tesla products either getting slyly keyed or engulfed in flames.
That is the type of figure Elon Musk to American society.
Through one lens – he could be considered one of the greatest technologists of all time.
Through another lens – he could be considered a man preventing the flow of Democratic party funding to its NGOs and other party apparatus entities.
Either way – this guy is going to be controversial and his stock has suffered immensely in the short-term.
That being said, one of the richest venture capitalists in the world Peter Thiel who is a remarkable man himself said to never bet against Elon. He might even dislike Musk as well.
Those words are hard to forget as Musk held an impromptu company all-hands meeting on Thursday night, giving an update on the progress of a number of products while also attempting to assuage fears that the CEO is ignoring his post.
Tesla stock has been in free fall since the start of the year, with sales slipping in key regions like Europe and China and even in the US. The changeover to the new Model Y SUV has been seen as a drag on sales.
Overall, Musk maintained that the news was "good" for Tesla and urged employees and others to hold onto their Tesla stock because, in his eyes, the future is bright.
The bet on robo-taxis and autonomous driving is one of the key catalysts for Tesla's future growth, and Musk again laid out his audacious vision.
Key to the company's autonomous vision is the Cybercab robo-taxi, slated for production in 2026. Musk said the factory was already beginning preparations for production using its "unboxed" assembly technique, which would resemble a "high-speed consumer electronics line," rather than an automotive production line.
Speaking of future product production, Musk said Tesla built the "first Optimus at the Optimus production line in Fremont," adding that the humanoid robot would be available for sale in 2026, initially to Tesla employees, after internal company use.
Turning back to the here and now, Musk predicted the Tesla Model Y — the company's most important current product — would once again be the top-selling car in the world following its new update.
To me, it is clear that Musk went the political route because he sensed his robo-taxi and Optimus robot projects were about to be drowned out by bureaucracy.
He probably understands more than anyone that America has become overregulated and it is hard to get stuff done, even if it is a lot more efficient than a place like Europe.
Being in agreement with the current administration has to boost his humanoid robot and robo-taxi project by at least 75% and I wouldn’t be surprised he is attempting to get as much regulatory approval in the next 4 years.
These two projects are what will quadruple the stock in the next 5 or 10 years. He knows that investors know that, and he is doing everything in his power to force the impossible to become possible.
Perhaps Peter Thiel will say that is something Elon Musk would and can achieve.
Mad Hedge Technology Letter
March 19, 2025
Fiat Lux
Featured Trade:
(ONE TO KEEP AN EYE OUT FOR)
(ORCL), (TIKTOK)
The U.S. administration has kicked around the idea of Oracle (ORCL) chairman Larry Ellison as a possible buyer to one of the hottest social media assets TikTok.
Oracle isn’t intending to outright acquire a majority stake, but their involvement shows that Oracle is at the seat with the big boys in tech and that seat carries a great deal of clout today.
Remember that Oracle’s stock was dead as a doornail a few years ago.
But the AI revolution seemingly revived a slumbering stock jolting it to higher highs.
Before that AI boom, Oracle was known as the company with outdated database cloud software and even today, most people don’t know what they even do.
Oh, how do just a few years change everything?
Realistically, Oracle likely doesn’t have the cash to buy into the asset.
The company is spending much of its cash on building new AI data centers and has over $90 billion in debt, partly due to a prior acquisition. Plus, the infrastructure-focused company has little experience running a consumer-oriented app.
The likelier scenario, and the one that’s under consideration with Trump administration officials, would involve Oracle reprising its role in providing a security backstop for US users’ data backstop would guarantee that TikTok’s US operations under new ownership would not contain a back door that China’s government could exploit.
Under a prior arrangement, the cloud giant would have taken a minority ownership stake in TikTok’s global business and provided technology and data storage services for the app to protect US user data.
But the arrangement hit a snag when officials in Washington and Beijing disagreed over whether ByteDance would maintain any involvement in the new TikTok entity.
The second challenge is more technical. Chinese authorities are unlikely to approve a deal that involves selling the new buyer TikTok’s valuable content algorithm, which determines the posts that users see in their feeds.
We are still trying to analyze where the dust will settle because it is not clear to the outside lens.
As it stands, Oracle pouring capital into AI data centers is a strategic move that has benefited the stock price and there is a high chance that shareholders start to bid up the stock after the macro contagion passes.
If somehow Oracle can even finagle a massive contract to managing TikTok’s data, I do believe the stock will be up 12-15% on that news. That development isn’t in the price yet and investors haven’t been sniffing it out yet.
In short, there is a great deal of upside potential in Oracle’s share price and outsiders shouldn’t minimize or water down the possibility for a short-term short squeeze of monumental proportions.
At the very minimum, it is hard to bet against Oracle even if the stock is down YTD by 8% and investors should expect some sort of appreciation when the broader landscape settles down.
