Tesla deliveries data could be a catalyst for equity markets, says Deepwater's Gene Munster
Summary
- Believes the current equity selloff will stop with a catalyst, likely from the "MAG-7" companies that haven't yet delivered strong positive surprises.
- Identifies Tesla's upcoming deliveries report (the following Thursday) as the "closest catalyst" among this group.
- Attributes only ~25% of the selloff to geopolitical tensions (e.g., war, oil prices); the primary driver is concern over the sustainability of AI growth and high expectations.
- Cites NVIDIA raising its CY27 revenue growth guide from 30% to 40% and the stock subsequently falling 8% as a pure example of this "can't get much better" anxiety.
- Is a "big believer" that the substance of AI will far exceed the hype, but acknowledges the challenge of managing the dynamic where beating numbers raises the bar even higher.
- Argues that not all mega-cap tech companies are equal; recently increased his position in Apple, seeing a "massive opportunity" in personalized AI following the Opus Four model release.
- Sees a similar personalized AI opportunity for Google.
- Is more challenged on Microsoft, believing it will be impacted on a "seat growth basis" despite consensus bullish price targets.
Trade Ideas
Speaker explicitly identifies Tesla's upcoming deliveries report (the following Thursday) as the "closest catalyst" among the MAG-7 companies that haven't yet shined to potentially halt the market selloff. The market needs a positive catalyst to stop declining. Tesla's delivery numbers, due imminently, represent a near-term potential positive surprise from a key large-cap name. The stock and the broader market sentiment could find a near-term floor if Tesla reports strong deliveries, making it a critical event to monitor. Delivery numbers could disappoint, failing to act as a catalyst or exacerbating the selloff.
Speaker states his firm recently increased its position in Apple and sees a "massive opportunity" for the company in personalized AI, specifically after the Opus Four model release. Personalized AI is a significant new growth frontier. Apple is positioned to "get this right," which could drive fundamental performance and justify a larger investment. The perceived opportunity is substantial enough to warrant adding to the position, indicating a bullish outlook. Apple may fail to execute effectively on the personalized AI opportunity.
Speaker states he is "a believer that [Microsoft is] going to be more challenged" and will be "impacted on a seat growth basis." Amidst a discussion on which mega-cap tech companies can continue to grow wealth, Microsoft is singled out as facing specific growth headwinds. Relative to peers like Apple and Google, the outlook is less favorable, suggesting caution or underweighting. Microsoft's Azure and AI businesses could outperform these muted expectations.
After stating Apple has a massive personalized AI opportunity, the speaker immediately says "Google also has a similar opportunity." The speaker's bullish thesis on personalized AI as a growth driver is explicitly extended from Apple to Google. If the personalized AI trend materializes as expected, Google is viewed as a primary beneficiary alongside Apple. Google may lose the competitive edge in AI development or monetization.
