Ozempic Bites McDonald’s, Trump’s Bitcoin Promise, & A Tesla Bull Makes His Case — ft. Dan Ives

He gets that one.

And Apple has never been an innovator. Didn't invent desktop, object-oriented computing, the MP3 player, the laptop, nothing. The smartphone, they invented none of it. They just wait, they come in, they're the definition of the second mouse.

I'm gonna act like your punk older brother.

Investors were largely unfazed by the news, with shares up 4% following the earnings report. And finally, Donald Trump pledged to make the United States into a Bitcoin superpower if he is elected in November. Speaking at the Bitcoin conference, he promised to deregulate cryptocurrencies and establish a strategic national Bitcoin stockpile. Scott, your thoughts, starting with OpenAI.

What you want, peanut butter? We have 55 different brands and 30 different sizes. And if you look at where the majority of the shareholder value has been added in retail, it's been added in specialty retail. Now, what is the core advantage of specialty retail? It's a lack of choice.

While we're on this subject, I will bring up another point, which is that, according to the information, OpenAI is burning $5 billion a year, which would mean they'll need to raise more money within the next 12 months. So I have a question for you. Their last round, they were valued at $80 billion. Do you think OpenAI will raise another traditional funding round, or will they go public?

Many people are opting to dine at home. Same-store sales in the June quarter were down 1%. The first such decline since 2020.. So, there are two things happening here at McDonald's right now. One, people are coming in to eat less.

And two, when they do come in, they are buying less. They are eating less. And we're seeing similar things at other companies. Chipotle's sales are slowing down. Same with Domino's.

ConAgra sales are down 2.5%. PepsiCo sales are down 4%. Something is afoot here. People in America are eating less, and I'm sure you know exactly where I'm going, and I'm sure our listeners do, too. What could possibly have disrupted the food industrial complex in the past 12 months?

Of course, the answer is Ozempic. But here's the very interesting part. If you look at the earnings call here, Ozempic, Wigovi, ZepBound, all the GLP-1 drugs, these drugs were not mentioned even once on the earnings call.

So, yeah, I want to get your take. Do you think McDonald's genuinely believes this isn't a problem, or, as you just hinted, are they just sticking their heads in the sand and hoping the problem disappears?

Why would they say it's inflation? Because inflation is cyclical, meaning their problems will be solved. McDonald's is a menace. One of the strongest indicators of childhood obesity, actually, one of the strongest, let's go further back than that. One of the strongest indicators of depression, lack of college attendance, self-harm, making less money, is obesity.

And what is one of the strongest signals of whether a child, especially a boy, is going to be obese? How many fucking McDonald's there are within driving distance. If you really look at McDonald's, Coca-Cola, PepsiCo, some of my biggest clients in the past, they are not companies. They're obesity indices. And as morbid obesity over the last four decades has gone from 5% to 9%, and obesity has gone from 30% to 40%, these companies are up 6%, 8%, 10%, and 12-fold.

And the notion, if you were to price this product to its externalities and the harm that it causes, they would have to double or triple the prices and start paying enormous taxes. But here's the thing. The industrial food complex is in bed with the industrial diabetes complex. And it's like, okay, let's get you addicted to shitty sugary food. We'll make a shit ton of money.

And then, once you're obese and depressed, we'll hand you over to the pharmaceutical and the diabetes complex, where we'll make even more money off of you. So I just fucking love that GLP-1 is gonna kick this company in the nuts over and over and over. You are going to see a collapse, a collapse, in my view, in McDonald's stock once they can no longer keep GLP-1 drugs and the impact they're having on their company stuck in the closet. Inflation, my ass. Brother, gluconamide, whatever they're called, drugs are coming.

You do not wanna be a shitty fast food company. I'm actually, I think, Chipotle's gonna be fine because they have a better product and I think it's healthier. But, my God, Taco Bell, KFC, all of these guys are, Diageo, the alcohol guys, oh my God. These stocks, in my opinion, are gonna get absolutely hammered, and it is so disingenuous and so, I don't know, such a lack of fiduciary duty that they don't acknowledge what is going on here.

Ooh, I like that, I just made that up.

They basically said to Trump, we'll raise you a billion, two billion bucks. Here's our guy, JD Vance, right? And you're going to make us all rich. Andreessen, Horowitz and Sequoia came out and basically, and endorsed Trump. You think they would do that unless they felt they would make tens of billions of dollars on their huge bet on crypto, if they hadn't said, hey, boss, let's be honest, you're a fucking criminal and we're willing to aid and abet this criminality.

We will raise you a billion dollars, but you are going to take crypto to the moon. It's been happening subtly, indirectly, for a long time. This is basically full kleptocracy. Your thoughts?

I think that's certainly part of the story. The one thing you've left out is the following statistic. As of 2024,, 17% of Americans have owned or currently own some form of cryptocurrency. So that's almost one in five Americans. And to me, that's what matters most here.

And I think, you know, he is, whether you like him or not, he's one of the greatest politicians or fundraisers of all time. I don't think anyone knows this better than Trump. And he realizes, despite having taken the anti-crypto position just a few years ago, he realizes that being pro-crypto is a political shortcut. because, yes, now he gets the donations from the winkled eye, but now he can also go to 17% of the population and tell them that if they vote for him, they're going to get rich. So I agree with you that this actually has nothing to do with crypto as a policy, but he knows that, you know, there's one thing Americans love more than politics, and that's money.

I would bet that the Harris campaign is looking at this and they're thinking, actually, maybe it's time for us to finally get behind crypto.

And this is because of the work of Lynn Alden. I've kind of come around on this. What crypto, or specifically Bitcoin, not the other ones, to a lesser extent, ETH, but they've been able to establish what every currency tries to establish, and that is some scarcity value. And what Lynn pointed out to me that just fascinated me is that if you look at the incremental increase in supply of Bitcoin, it's less than gold. Like more gold is mined as a percentage of all gold out there than new coins.

It's far less than any currency. So if you believe that it's a credible store of value and you believe it's going to be, have greater scarcity, I think it actually, as an investment, is not a bad idea to take one, three, five, 10% of your net worth, depending on how young you are, how risk aggressive you are, how diversified you are already, and just holding onto it for a long time. But there's a separate issue here, and that is its value as an asset class and its pay for play and its role in politics. I'll be very interested to see if Harris embraces crypto. That's an interesting thought.

I don't know.

And meanwhile, you have all these crypto enthusiasts saying, fuck Gary Gensler, fire Gary Gensler, fuck the SEC. And the reason that they're doing that, I believe, is because he hasn't granted, you know, proper regulation or approval to everything else in the crypto market. And the reason he hasn't done that is because everything else in the crypto market is pretty much a fake stock that pretends to be a currency. The entire premise of most of these assets is to avoid regulation, which is why, to me, it makes no sense when these crypto people say things like, hey, man, all we want is regulation. We just want to be regulated.

No, you don't want to be regulated, because if you were regulated, you would be out of business, because the majority of these currencies aren't currencies. They're fake stocks that haven't been registered with the SEC, and that's the only reason that they're trading.

That might take Bitcoin up in the short term. I think in five years,

Bitcoin trades at a greater valuation with a Harris administration than a Trump administration. Because if you just let this be the Wild West, okay, come one, come all scam artists, you're gonna have crazy scams, hacks, cons, and people are gonna start to lose faith in this market. And the reason why we have, we force companies to go through all the administrative complexity and cost of regulation enforced by the SEC is that someone feels confident to go out and buy this synthetic, notional ownership called a share of stock, because they believe there's regulation that, to a certain extent, has done some due diligence and protects them from outright fraud. And if you just wanna have the Wild West there, fine, but be clear, the number of scams, the number of crimes, the number of retail investors that lose everything, the number of companies that claim, where the CEO goes on CNBC, and then what do you know? overnight?

Are they registered in the Bahamas and every depositor lost everything? That will be a serious hit to the market. You will lose retail investors. Institutional investors won't wanna get near it. And over the medium and the longterm, this market will not thrive and the price will never reach its potential.

So I would argue, if you, unless you want a quick trade here, I think it goes up. I think over three, five, 10 years, it trades at a higher price with a certain amount of sane regulation. And it's the same way, I was on this call last night. I think a lot of my Jewish friends are more drawn to Trump because they see his support of Israel as being more resolute. I'm like, look, we gotta think about, when this war comes to an end, how we get to an enduring peace.

And having this blustery, macho talk isn't going to bring a sustainable peace to the Middle East. You're gonna need thoughtful diplomacy. You're gonna need back-channel conversations with Iran. I mean, you're just gonna need really talented, thoughtful diplomats like Secretary Blinken and Secretary of Defense Austin. And the notion that just a bunch of tough, macho talk of finish the job is gonna create a sustainable peace or that firing Gensler is gonna be long-term good for this asset class, it's really reductive, primitive thinking, mostly being endorsed by people who just wanna have a big bag here and wanna dump it.

Vance and Donald Trump.

And when I look at the multiple on earnings of Ford and GM at five and eight respectively, Ferrari at 50, and then Tesla at, I think it's 99 times Ford PE. That's my bear case, but I wanna give you the opportunity to make the bull case.

Therefore, comparing it to a GM, a Ford, a traditional car company, I've always viewed it as an apples to oranges. Now, in terms of the vision playing out, that's where now, the next few years, full self-driving, autonomous, robotics, in other words, the non-auto piece really needs to play out for this story to reach what I believe is a trillion, call it trillion and a half valuation. And I think it's gone through probably one of the more difficult periods for Tesla in the last, call it four or five years. If you look at the last six, nine months, I mean, China's been very competitive, pricing pressure, we've seen it in terms of earnings. This is kind of now a baton handing from, let's say, the auto piece to the disruptive tech.

But now it comes down to Musk and Tesla proving it.

And two, the autonomous driving. argument is the one I hear from Kathy Wood, who says that she estimates 90% of its revenue or its profits will come from autonomous driving. I feel like shareholders of Tesla have been on a corner waiting for an autonomous Tesla taxi for seven years now. And that the company has very little credibility around timelines. And let's assume that at some point tomorrow becomes today and they do have autonomous Teslas.

What is it about Tesla that'll be able to capture the value from autonomous when you have a lot of other companies who are making similar, better progress around autonomous? So-?

My view is look out next four or five years, what can free cashflow ultimately be? What could the profitability margins be on software, on autonomous? And does that ultimately change? Not just the narrative, I think the valuation narrative. But you hit the great point, because the issue on autonomous has been going back to 2019.

RoboTaxi. Okay, it's coming tomorrow. It's coming next week. That's why I think, when I look at RoboTaxi day, now, 10th, 10th, October 10th, it's a historical day. one way or another.

Either this starts the vision for bulls like myself or Kathy, it feeds. in other words, now it actually shows execution. This is how they're gonna monetize. Or, to your point, if it's disappointing, then it gives the bears legitimacy. That's why I view it was originally August 8th, now October 10th, as really a seminal moment in the Tesla story going forward.

He's been saying this since 2014,, not about RoboTaxis, but about full self-driving.

And what's remarkable to me is the fact that I've been waiting for that seminal moment to come, like you say, for years now. I think people have said this about August. It was supposed to come in August. And then, for whatever reason, Elon said, actually, no, we're gonna push it to October. And every time it feels like the market is okay with it.

They're a little pissed off. Maybe they're a little disappointed. But I'm just surprised that that moment hasn't come. So I'd love to know what you think will happen if, come October, Elon says, actually, sorry, we're gonna need to wait another three months.

So it's like, what's on both sides? I think for most investors, institutional hedge funds, mutual funds, it's really trying to now show the next 12, 18 months. I wanna say the time's up, but now it's at a point like either walk the walk, don't just talk, talk. Next 12 to 18 months, you need to show not just 12.5, but in terms of the latest FSD, you gotta show the path to autonomous. What does RoboTaxi look like with the fleet?

Because if you go back to like this last quarter, the frustration is the bears will say it was all credits. It was a disappointing quarter. They essentially missed on other metrics. Margins were under pressure. Yet the bulls are focused on autonomous and full self-driving and RoboTaxi debt.

So I think that's sort of the issue in terms of where this is all heading. is that now it kind of comes to a point where they need to actually put up the numbers, show the vision. And look, this is a stock a year from now. It's either 300 or much lower. In other words, I don't view this as one where it's just steady and it just sort of treads water.

It's either like huge, this is the next chapter of the story, otherwise disappointment.

my scenario, a more likely scenario, and I have trouble, I wanna be clear, I have trouble separating my emotions. I do not like the man. I think he's a terrible role model for young men. And I have trouble distinguishing my disdain for him. But I'm gonna try and be unemotional.

And I think I'm being unemotional and I say, okay, the company wants to talk about anything but cars, because there's no way to justify this valuation if they have to at some point come out of the closet as an actual car company. By the way, I think it's an amazing car company. I owned a Model X Falcon. I loved it.

And then he insulted me on Twitter and I took a big fucking dump on the passenger seat and sold it. Is that too much? What do you think, Dan Ives?

So here's the scenario and why I would avoid the stock right now. Tomorrow keeps becoming tomorrow around autonomous driving. It continues to be something that's much more difficult than anyone had anticipated. And he has to come out and say, it's not coming out this year or next year, although he has a capacity to consistently look people in the face and say it'll be out next year with no underlying truth to that. You have a company where they say, all right, the power stuff is amazing.

Let's value that at 30 or 40 times earnings. It's a better auto company. Let's put it at somewhere between GM and Ferrari at 25.. And the sales of the automobiles continue to flatline. I think they were even down last quarter.

I see a scenario where if you didn't know this company was at 220 bucks and you woke up and it was at 40, you would say, well, of course it's at 40 and it would still be a highly valued automobile company. So I see a scenario where it's down 80%. I also can see a scenario where it goes up twofold, because it is sort of a meme stock. But if you're a fiduciary for other people's money, isn't the downside scenario here much greater than the upside?

I think we're going through a gut check moment. What I mean is, is that you can have growth on cars continue to go on. You need to increase in terms of growth. You gotta get to seven, eight, nine million vehicles over the next years. You can't continue to cut prices.

We need that to flatline margin. to get back, let's say auto X credit to a 20%.

Then there's the other piece of the story. Well, I believe autonomous, I'm a big believer in autonomous and I'm a big believer in Waymo, and just where this technology is heading. That's the bull case scenario. But that's also why, like, look, we spend so much time on our hands traveling around the world to make sure our thesis, of course, you could be wrong here and there to make sure, like, we're not gonna be dramatically off. And if we are, then we'd have to reevaluate.

I do think it's the reason we're bullish on GM as well. I think GM's gonna be a huge benefit there. Ford, obviously, a lot more difficulty that Farley's going through there. That, at the premise, is our bull thesis. In other words, like we're not just bullish on Tesla because of X, Y, and Z in the future.

At the core, it's a belief that EVs as a percent, globally, are gonna go 15,, 20, 25%. And now, four or five acts from where it is today.

This is not like zero-sum game type view. I mean, that's why we've been bullish in this sector. We're not one of these. where it's like, ah, just Tesla, like that. It speaks to maybe a broader view, just like our view in.

like AI. You don't just own Nvidia, you own Microsoft, you own Palantir, you own Google, you own Amazon, Apple being one of our favorites. Yeah, that's how we've kind of, I know how we've always navigated, Pat.

We're back with Prof G Markets.

We've gone through those iterations. But, Scott and Ed, my view is where this is all heading. There's a company that was 20% cloud and they're going to 70% cloud. AI, I ultimately think, can incrementally add 80 to $100 a share of the story. So Microsoft's probably one of our core AI names in terms of where to supply it.

But I think the AI story could add 30 to $40 per share to Alphabet. We are still in the early stages of really a transformation. that's happened at Alphabet. Now you could argue like some of that's priced into Tesla, some it's priced into Nvidia, Microsoft. I actually think the one that's the least priced in from AI.

of all these names is Alphabet.

Headline thoughts on those two stocks. Is there anything in particular that you're paying attention to as those earnings calls come up?

And Apple, this is almost a, it's almost like a rounding error in terms of this quarter. The focus is really iPhone 16, September. I think it starts in AI driven super cycle. Developers are gonna be building hundreds of apps on the Apple ecosystem. And you have 270 million that haven't upgraded their iPhone for years.

So I think it's gonna have, it's actually gonna be like an AI driven super cycle. I think sentiment actually is very negative, institutionally speaking. And it's that continued skepticism, right? I think there's just skepticism. Many have just waited on the silence of big tech, focused on valuation.

But my view is like that playbook, you've missed every major big tech name the last 15 years.

They're gonna be a big beneficiary. And then they've started to already see that. But actually I think Oracle could be a home run in terms of what they're doing on AI as the CapEx build out continues. And big fan of Safra Cats and everything that they've built over there. The second would be Palantir.

Palantir, it's the same theme. Like Palantir, very controversial. Some don't like them. But that's when it's transitioned from government to enterprise. And that's probably one of the best pure play AI names out there in terms of use cases from a software perspective.

Me and Scott work at a company. We want to use AI in our company.

We don't know what the use cases are. We go to Palantir, they look at our data, go into our systems, they come out and they say, these are your use cases. This is how you could use data. This is how you could actually profit from it.

Scott, Dan was very optimistic about many of the companies we just talked about. I'm wondering, how do you know when to be optimistic about the future of an investment, even if it's not currently doing well? And how do you know when it's time to quit?

Oh, you want out of your relationship? Well, okay, just recognize, the relationships are hard and there's no perfect person. And do you play any role in why this relationship isn't working? In terms of a company, I have quit a bunch of times. I started a video delivery company, I quit.

I started an e-commerce incubator backed by Goldman Sachs, JP Morgan, Howard Schultz, Maveron, and I quit because I saw that this was, the market had totally shifted. There was probably no way through this, so I quit. I thought I was gonna be an investment banker. They're a great industry, incredibly lucky to have a foot in the door, Morgan Stanley. I was not good at it and I hated it, and I quit investment banking.

So there is a time to quit. You need a kitchen cabinet. In terms of investments, personally, I think you wanna diversify and not worry about it, not have to make these sorts of decisions. But there's a couple signals. One, quitting in terms of taking profits on the table.

If one stock becomes worth more than 50, 60, 70% of your net worth, because you have the good problem of owning Nvidia, I don't think it's a bad idea, after it goes long-term capital gains, to diversify a bit, take some off the table, and invest in other things. I think you should always be thinking about portfolio balancing. Tax harvesting, and that is the tax code. People who get wealthy understand taxes. So towards the end of the year, I'll look at the stocks where I have some losses because I've had some gains this year.

It's been a good gain for me. And I will quit those stocks in order to recognize the losses and offset my gains. But again, I'll circle back. It's really hard to read the label from inside of the bottle. You should constantly be talking to people about when and if to sell.

So, for example, one of the biggest mistakes I made from an investment standpoint, when Donald Trump was elected in 2016,, I sold every stock. I thought, this guy is an idiot and he's crazy and the markets are gonna plummet. Markets went up. And so I immediately incurred a massive tax liability. And then I had to buy in at a higher price back in six or 12 months later, because I let my emotions get a hold of me and I didn't speak to people.

And I think the majority of people I would have spoken to go, well, you probably shouldn't sell everything, right? Get advice from outsiders.

We'll be back with a fresh take on markets on Monday.

♪ You held me in kind reunion. ♪. ♪ As the world turns and the clouds rise, ♪ ♪ In love ♪.