Tesla Stock Surges, Then Crashes

TECH
Tesla Stock Surges, Then Crashes

Tesla’s stock surged over 50% after Trump’s election, gaining nearly half a trillion in value. Investors were optimistic as Elon Musk promised the Cybercab by mid-2025 and took on a key role in Trump’s administration. However, recent controversies in Europe and declining sales in China have erased those gains, sending Tesla’s stock back to early 2021 levels.

Despite its hype, Tesla’s fundamentals are weakening. The company earned $4.2 billion in 2024, but its $955 billion valuation assumes unrealistic future success. Tesla would need a 47% annual earnings growth rate to justify its price—a nearly impossible target. Meanwhile, revenue growth is stalling, and competition in EVs and AI-driven mobility is intensifying.

Musk’s vision of robotaxis and software-driven profits remains speculative. Without tangible results, Tesla’s market cap appears inflated by belief in Musk rather than business fundamentals. The question remains: What is Tesla truly worth without Musk’s hype?

ECONOMY
Fed Holds Off on Rate Cuts

Federal Reserve Chairman Jerome Powell stated Friday that the Fed will wait to see how President Trump’s policies unfold before adjusting interest rates. With uncertainty around tariffs, immigration, fiscal policy, and regulation, Powell emphasized patience in monetary decisions, noting that the Fed is focused on distinguishing real economic signals from short-term noise.

Markets have priced in three rate cuts this year, but Powell’s remarks suggest a more cautious approach. “Policy is not on a preset course,” he said, stressing that the Fed is well-positioned to respond as needed.

Despite concerns over inflation and tariffs, Powell maintained a positive outlook on the economy, citing a solid labor market and wage growth outpacing inflation. However, inflation remains above the Fed’s 2% target, and some officials, like Fed Governor Adriana Kugler, support holding rates steady for now. With economic conditions evolving, the Fed remains in a wait-and-see stance before committing to rate adjustments.

TECH
Siemens Invests $285M in U.S. Manufacturing

Siemens announced a $285 million investment in U.S. manufacturing, including two new facilities in Texas and California. The company’s latest expansion builds on over $10 billion in U.S. investments, reinforcing its commitment to American industry.

Siemens CEO Roland Busch emphasized the company's confidence in U.S. innovation, stating, “We are bringing more jobs, more technology, and a boost to America’s AI capabilities.” With over $90 billion invested in the U.S. over the past two decades, this year’s expansion will push that total past $100 billion.

The new facilities in Fort Worth, Texas, and Pomona, California, will produce electrical equipment for commercial, industrial, and construction sectors while supporting AI data centers. Siemens expects to create over 900 skilled manufacturing jobs through this investment. The announcement follows Taiwan Semiconductor Manufacturing Co.’s plans to invest an additional $100 billion in U.S. chip manufacturing, reflecting a broader trend of major tech companies expanding their American operations.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.