Tesla isn't out of the woods yet when it comes to returning to growth, says Deepwater's Gene Munster

Our news another Tesla executive calling it quits after seven years with the company. A guy named Rich Otto, now former head of product launches, said he’s leaving the company and he wrote quote the recent layoffs that are rocking the company and it’s morale of Thrown this harmony out of balance and it’s hard to see the long game. It was time for a change now. Otto joined several other high-ranking execs to leave Tesla since layoffs begin last month, but he is the first to publicly offer a less than sunny glimpse into the vibe on site. Should investors maybe you view these curtain calls A cause for concern or just somebody writing something on their way out? The door. With us tonight for more is Deepwater Asset Management managing partner and Tesla investor Gene Munster. I don’t know what to make of this. Gene, you know it’s Tesla, so it gets more attention. Executives leave companies every day. They come, they go. Some of them are angry. Some of them are not angry. Some of them are write stuff. Some don’t write stuff. Are we making too much of this because it’s Tesla or because these are really high level people all kind of at the same time? It is an issue. Well, I think that we need to take in the context that he is saying something and when you do say something negative against Tesla, you do run the risk of their legal department outreach, which is something that you don’t want. So this is a clear sign that there is a morale is low, which makes a ton of sense. I mean, how can it not be low? They lost 14,000 of their coworkers. It’s it’s understandable. But in a sense his comments unfortunately are overstating the obvious. This is what happens and a month, two months, three months from now, the people that are still there will pick up the slack and continue to March forward. And so I was surprised to see the comments just because it probably doesn’t pay to make comments like that on the way out. But I think that they really don’t tell us much. I would add briefly that there is a dynamic related to the June quarter which investors should be aware of is that the streets looking for revenue growth of 4%. I suspect that it will be a slight decline and so we’re not out of the woods yet when it comes to kind of returning to growth for for Tesla. So that how big of a number would that be? G, so it was down 9%, revenue was down 9% in the March quarter. As mentioned where the Street is at the plus 4I suspect it’s a -, 3. And that does line up with Elon’s comments that he said that on the conference call that sales in June would be a lot better, a lot better. Three per down 3% is a lot better than down 9%. I think some analysts have taken a little bit of a liberty thinking that this is going to be back and growth. The comps are still hard, but I do expect the company to return to nice 25% plus growth in 2025. That’s what you’re really owning this for. That’s why I own it. OK, there you go. Maybe some good news there for Teslerians. I got to switch topics. Gene according to Reuters, Open AI, right? The big artificial intelligence company planning to announce a Google search competitor on Monday. Google stock right now is down a touch after hours. How big of a deal do you think this is? And what for people at home that are maybe watching? Don’t get it. Imagine instead of quote Googling something, you just bring up ChatGPT and go what’s the best Tex Mex restaurant near me? Boom. And it gives you the scrubbed reviews. I mean, this seems like a big deal for Google in the near term. It’s an absolute big deal because I think investors are on pins and needles. We’re investors in Google at deepwater and this is the topic that we’re, we have been navigating about the shift from regular search to generative search. So it’s going to have a negative impact. But I would just remind investors, I think long term this is basically noise around Google search is going to change. And Google’s already changing with generative search. And they have something that Open AI doesn’t have, which is distribution. 3 plus billion people use their products on a daily basis. They have infrastructure and they’ve got just a behavior. And that behavior piece means that consumers are going to want to see something that’s 10X better to really change how they use these products. And so it opening eyes going to announce a search project. Yeah, product Google stocks going to be down, but I don’t think it changes the long term.