The world of finance may be abuzz about SpaceX filing for an IPO, but Elon Musk’s other golden child is hitting a speed bump.

Today, Tesla reported it delivered 350,023 EVs in the first quarter of 2025—a steep miss compared to projections of about 381,000 units. This marks the second consecutive quarter that the company has missed sales projections, and its second-worst quarter of this metric since 2022.

On top of that, Q1 energy storage deployments (a key revenue pillar for Tesla’s energy storage business) came in at 8.8 gigawatt hours, down from the 14.2 gigawatt hours deployed in the prior quarter, and roughly 39% lower than analyst estimates.

The EV maker did deliver 8% more cars than it did in the same quarter last year, although that was a notably rough quarter, since it was at the height of Musk’s political antics.

Tesla sank 5.42% on the news. The stock has fallen 19.82% this year amid disappointing deliveries, intense competition from China, and persistent fears that Musk is distracted from his role as CEO.

Swapping EVs for AI

While shareholders were dismayed by Tesla’s misses today, analysts weren’t particularly surprised—after all, Musk appears more focused on robotaxis, humanoid robots, and turning Tesla into an AI giant than dominating the EV market.

“While the delivery numbers were quite underwhelming, this was not a shock given the current EV backdrop across geographies while the company shifts gears to focus more on its AI strategy,” Wedbush analyst and Tesla bull Dan Ives wrote in a note today.

Although die-hard Musk fans are on board for this transition from electric vehicles to cybercabs, Optimus robots, and AI, Tesla’s EV business is still its primary cash cow—at least for now. Luckily for shareholders, the EV market at large has actually gotten a boost from the Iran war, of all places. With the flow of oil disrupted and gas prices climbing, EVs that can save drivers cash at the pump suddenly look preferable.

That might present an opportunity for Tesla to recover some lost ground in the EV market. But it’s Musk’s big ambitions that ultimately hold the key to Tesla’s future.

“We continue to believe the most important chapter in Tesla’s growth story is now beginning with the AI era here,” Ives said.—LB

🟢 What’s up

• Globalstar jumped 13.42% on reports Amazon is exploring an acquisition of the satellite communications firm.
• AI infrastructure company Penguin Solutions rose 13.37% after beating Q1 expectations and raising its full-year outlook.
• Wingstop gained 5.27% as Piper Sandler turned “extremely bullish,” citing improved risk-reward after recent underperformance.
• NextDecade popped 6.95% and Cheniere Energy climbed 1.96% as renewed Iran tensions lifted LNG demand and raised supply concerns.

What’s down

• Bed Bath & Beyond fell 0.86% after agreeing to buy The Container Store for $150 million.
• Blue Owl Capital dropped 1.61% on a surge in investor withdrawal requests from its funds.
• General Motors slipped 3.32% and Toyota dropped 1.27% after both carmakers reported weaker US Q1 sales amid affordability pressures.
• Irrigation manufacturer Lindsay Corp declined 12.06% following a notable earnings miss in its second fiscal quarter.

While you were watching the Artemis II blast off or reading about the recent Summer House drama, one headline may have snuck past you: Google just killed crypto.

Cryptocurrencies are built on the blockchain, ensuring that transactions are swift, traceable, and most importantly, secure. But that security is no longer guaranteed, as advances in quantum computing threaten to overpower crypto’s defenses. The day that quantum computers can solve cryptographic encryptions is known in the tech world as “Q-Day,” and according to Google, it’s fast approaching. The tech giant has been working on its quantum ‘Willow’ chip for some time now, and researchers believe that by 2029, it will be ready to crack the code on crypto wide open.

That is very bad news for bitcoin and its ilk, which rely on the security of crypto algorithms as one of the key pillars for crypto’s growing mainstream adoption. It’s also bad news for a hot new fad sweeping the financial world: tokenization, or the digitalization of traditional assets like stocks using the blockchain. The NYSE and Nasdaq are testing stock tokenization programs that will allow investors to trade 24/7, but if quantum computers could expose those trades to malicious actors, tokenization may be dead on arrival.

For now, both tokenization and Q-Day are still a ways off—though there’s suddenly a very foreseeable future where crypto isn’t as secure as it once was. Google researchers say that blockchain-based assets like bitcoin need to start migrating to “post-quantum cryptography” ASAP. As for traders, they should brace themselves for some serious upheaval in the always unpredictable world of crypto.—MR

The AI trade is starting to short-circuit. After years of red-hot momentum, the rally is hitting a few glitches:

• Nvidia shares fell 6.5% last quarter, marking two straight quarterly losses and its longest losing streak since 2022.
• Memory companies Micron and SanDisk slid last week after Google unveiled TurboQuant, a tool that could cut AI memory needs by up to six times—spooking investors betting on endless demand.
• Super Micro Computer is grappling with legal overhang after its cofounder was caught smuggling chips to China last month (he pleaded not guilty yesterday). The company says it’s complying with export laws, but the stock has already dropped nearly 25% since the news broke.
• Chipmakers Broadcom, AMD, and TSMC are getting dragged by geopolitics, as the Iran conflict threatens higher energy costs across Asia—raising production expenses and supply chain risks—while roughly a third of global helium supply, critical for chipmaking, has been disrupted.

The good news

Put it all together, and it’s safe to say that tech is struggling—a sharp reversal after years of market dominance. The shift reflects growing skepticism around massive AI spending colliding with geopolitical risks and supply chain constraints. But the pullback has flushed out positioning and reset valuations, potentially setting the stage for outperformance.

The Magnificent 7 as a group now trades below 25x forward earnings, well off its 33x peak in October and under its 10-year average of 29x. Meanwhile, Mag 7 fundamentals remain intact, with profits projected to grow 19% in 2026, outpacing the broader market’s 14%, according to Bloomberg.

For Nvidia in particular, the near-term weakness may follow a familiar pattern. Historically, after streaks of two or more monthly declines, the stock has averaged a roughly 12% gain in the following month, suggesting momentum could quickly flip.

Zooming in on memory stocks, some analysts see the recent selloff as misplaced. Mizuho points to a version of the Jevons paradox: efficiency gains from tools like Google’s TurboQuant could actually accelerate AI adoption, ultimately boosting demand for memory over time.

As for geopolitical risks, UBS analysts say the helium disruption is manageable for now. Existing inventories should cushion the impact, and if the conflict resolves within two to three months, the effect on chip production is likely limited.

The outlook for tech stocks remains murky, but one thing is clear: the selloff has made valuations look a lot less stretched. With prices reset and earnings still holding up, the recent weakness may be less a warning sign and more an opportunity.—SY

• Maine is about to become the first state to ban data centers.
• Want a reliable, surefire job in the AI era? Consider nursing.
• The US trade deficit widened 4.9% in February.
• The latest in the GLP-1 wars: Novo Nordisk said the Wegovy pill outperforms Eli Lilly’s oral equivalent.
• Starbucks will give baristas and supervisors up to $1,200 a year in bonuses as part of its turnaround plan.
• Tech companies laid off 24% more employees last month than in March 2025 as AI adoption sweeps through the industry.

There are no earnings tomorrow, because the market is closed for Good Friday (and we have the day off). But the economic reports continue unabated, with the monthly US jobs report sure to catch a lot of attention as investors fret about the Fed’s next move.

Have a great weekend, we’ll see you all on Monday!