Something worth noting about how the market is trading earnings this week.
Tesla beat last night and the stock is down 4%. IBM beat, down over 9%. ServiceNow beat and raised, down 17%. Three clean beats, three selloffs.
80% of the S&P 500 is beating estimates this season. When everyone beats, a beat isn't really a signal anymore. It's the baseline. Analysts keep moving the bar lower until everyone can walk over it. So the market is pricing the forward story now, not what you just earned.
Tesla is the cleanest example. Margins improved; FSD is scaling to 1.3 million paid customers; Optimus is ramping; and the AI5 chip is coming from a new Gigafactory Texas fab. That's the dream part.
Then Musk said capex is going substantially above $25 billion and free cash flow will be negative for the rest of the year. And buried in the call was the real bombshell. Tesla admitted HW3.0 vehicles do not have the capability for full self-driving. Every customer who bought a Tesla on the promise of that olde
