Gene Munster

$TSLA margins got hit with discounts and/or mix shift that saw ASP fell 3% q/q. Auto cogs went up less than 0.5%. My take: I need more form the call.

New $GOOG AI Mode ads are “gaining traction”. Examples are text ads during trip planning, and putting clearly marked ads inside of AI Mode responses. This is important because it’s a lever that the company can continue to leverage on to keep Search growth rates in the mid teens (great at 17% in June). They did the same thing in 2010-2015 as the company slowing turned up mobile search ad coverage.

Sundar says Waymo has delivered 1m home delivers through Walmart and DoorDash. Fun use case for autonomy. $GOOG

$GOOG. Sundar says AI Mode and Overviews continue to yield more search clicks. Thats why Search grew at almost 17% in June, vs. 19% in March, and compared to around 10% a year ago.

$TSLA down 3% because of the miss on auto margins ex credits. It came in at 16.3% vs. Street at 18.5% and 19.2% in March. I expected it to be 19%. Basically says there was discounting or a spike in cost of goods. Both are directionally negative. We will get more on the call.

TSLA most important number is FSD subs grew 56% vs. 51% March. That growth should accelerate in September because of the huge delivery beat in June. In the investor deck they report “with over 55% of new deliveries including FSD subscriptions”. I assume they are talking about paid subs, not the free one month trail that comes with new Tesla's. If that’s the case that attach rates are 55% in the US, that is higher my estimate of sub 10% attach rates late in 2024. This underscores how much FSD has improved. I believe about 20% of global Tesla’s with Hardware 3 now subscribe to FSD. That number likely goes to 85% long term.

$GOOG Cloud up 82% y/y vs Street at up 63% and the stock is flat because fractional misses Search and Margins Search: Street was looking for 17.1% growth, came in at 16.8%. Operating Margins: Came in at 34.0% vs. Street at 34.5%. My take: Given what we now know, the stock should be up tomorrow. The Cloud number is the most important number and it was a massive beat. Now we have to wait for the call.

The near term AI trade hinges in part on 2027 capex growth outlook from the hyperscalers. The other part is cloud growth. As for capex, I don’t expect them to say much about 2027 this earnings cycle. That said, I expect analysts numbers to come up based on high level comments about current capex trends, starting with Google tonight. Currently the Street is expecting $GOOG , $AMZN , $META , $MSFT to grow capex in 2027 by 28%, up from 23% two weeks ago. I believe that number will increase to 37% after June earnings revisions.

The second most important topic for $GOOG earnings is Search growth. Streets expecting it to up 17% YY compared to up 19% in March. One reason for the step down is the growth comp in June 25 was 12%, slightly higher than the 10% in March. Bottom line is Google is doing a great job of converting AI Overview and AI Mode traffic into Search revenue. More Google use, more shots on goal, more search revenue.

Tonight for $GOOG, the key number is Cloud growth. Streets expecting Google Cloud growth of 63% yy, unchanged from 63% in March. I think it will be above 65% with language that they’re supply constrained. For comps: AWS is expected to be 32% vs. 28% in March. Azure is expected to be 40% vs 39%. Bottom line is Google cloud is gaining share in a growth market.

$TSLA earnings tonight. Here's the cheat sheet: 1. Auto Margins ex Credits: I expect auto gross margin ex-credits to be slightly above the Street's 18.5% because volumes were so strong. It was 19.2% in March. In theory, it should be flat quarter over quarter. 2. Deliveries: Key question is what drove the surge in June deliveries, up 25% y/y compared to up 6% in March? I believe high gas prices is a sustainable tailwind. 3. Capex. Here’s the negative wildcard. Last quarter, when the company guided capex to increase this year from $20B to $25B, it triggered a sell-off in after-hours trading, underscoring that the topic matters. I expect the …

Tesla June Quarter Preview: More moving parts this time around including capex, sustainability of delivery growth, ramp of cybercab production and our old friend, auto margins ex credits. Overall, I expect good news, just down know how investors will take greater capex for CY27. $TSLA June Quarter Preview: https://t.co/JMYu3aZRzI

Good news for $AAPL, $HPQ, $SNDK, $WDC. Deepwater's in-house AI guru @dougclinton was pounding on Grok's Build (command line version of Claude Code and OpenAI Codex) last weekend, and while the results were impressive, its a memory hog as evidence by his laptop shutting down. The writing is on the wall. In CY27 and beyond we will start to see an enterprise and consumer hardware upgrade cycle driven in part by the need for more unified memory.

Thank you, @markgurman, for filling in the blanks around the piece we wrote last week and explaining how Jony Ive is intertwined with the Apple-OpenAI lawsuit. Bottom line: this is a win for Apple because, at a minimum, this will slow OpenAI’s efforts. At a maximum, it will end their device efforts. https://t.co/O0TVNsD2vL

Despite better than expected September guidance from two key AI infrastructure companies, the AI trade softened this week, down around 6%. This begs the questions: what will it take to get the AI trade on track? https://t.co/60uCWidF35

How often do you use Siri?

$AAPL closed up 4% vs the Nasdaq up 0.5%. The new Siri AI in iOS 27 public beta released yesterday gives investors concrete evidence that Apple finally has the AI chops it’s long been missing. This is the same setup that fueled Google’s sharp rerating in April 2025. After using the beta for a day, I can attest it’s like having a new phone .

The college GPA is dead. My eyes have been opened to how AI is reshaping college learning. Based on a conversation today with 5 Deepwater interns (all rising juniors), here are 7 takeaways. Bottom line: Employers hiring college grads should flat out ignore the GPA. Actually, they should hire the low GPA student because they likely invested more into strengthening their critical thinking. 1. College isn’t really about learning anymore. AI frees up time for life experiences, friends, working out, the pool, partying, and extracurriculars. It’s about the fun and the experience. 2. The prevailing mindset is simple: You need a degree to get the…

AI fundamentals are as strong as ever. The question is when will the market give it credit? https://t.co/Z67wUi8L6l

Apple vs. OpenAI is really Apple vs. Ive https://t.co/IoPLuj09UX

9 trading days until tech earnings kick off with Tesla and Google. While Tesla is its own animal, the broader AI trade once again comes down to capex and cloud. Overall, I expect measurable upside, which should be favorable for the AI trade: https://t.co/CS6FlKHPCy

In CY27 I expect the Hyperscalers to grow capex by +40% vs the Street at 23%. AMZN's debt raise is the latest evidence. https://t.co/LgUvEVelZ0

Fun debate today with @KellyCNBC about Tesla deliveries: https://t.co/XTrinQW2p4

The TSLA stock reaction to deliveries (down 6%) buries the lede. The EV winter is ending and deliveries still matter. https://t.co/iEndprirML

$TSLA shares down 6% on the huge delivery beat for three reasons. The biggest was buy on the rumor. The second is a question of how much did high gas prices help the number and third, the ending of the DOGE headwind (Elon left in May 25). Bottom line: The EV winter that started in March of 2024 is ending. Even backing out those one time benefits, it still was a monster delivery number, likely up 20% plus vs. up 6% in March.

$TSLA down 2% on the monster delivery numbers. I think this is mostly buy on the rumor, sell on the news. Stock is still up 12% over the past week compared to the Nasdaq up 4%. The whisper must have been much higher than I realized. I can't find anything sinister in the numbers. They missed energy deployments by 3%, but investors are even less focused on energy compared to delivers. More to come.

$TSLA deliveries are the first sign we're exiting the EV winter that started in March of 2024. June Deliveries were up 25% y/y (vs. the Street up 6% and the high-end estimate of 21%). This was the strongest delivery number since Sep'23, which was up 27% y/y. Additionally, June Deliveries would have been up 27% if not for the S/X sunset. My guess is higher gas prices worldwide likely impacted deliveries by 5%. In other words, the strength in deliveries tells us something bigger is going on. That is Tesla's fundamentally the most appealing EV on the market (in the U.S.) and more broadly, consumers are returning to EVs. Deliveries still matte…

Tesla deliveries are out tomorrow, and they still matter. I expect an acceleration in growth from March to June and, more importantly, believe September will finish roughly flat y/y, compared to the Street’s expectation of down 9%. https://t.co/RdAne86tJf

While Google's entry into the Dow captured headlines, the real story is Samsung’s and SK Hynix’s capex buildout. The combined $590B in factory investments is about 48% higher than most had expected, underscoring yet again how early we are in the AI buildout. https://t.co/XSxJ9zYl9O

Capping a big week in tech with MU earnings. I had the honor to break it down with Dan & Guy.