Hey this is tom, and i'm just here to explain to you what happened with tesla you also. The number is the q4 results were phenomenal and yet the stock dropped 12. I'm here to explain why and more importantly, i'm here to also explain what's next for tesla in the next four minutes that we're gon na spend together. Hopefully so, don't click, nothing, don't smash.

Nothing don't buy nothing so check this out. The q4 financials were phenomenal, not gon na go through the numbers. Here. You all should know the numbers if you watch my channel, but the stock drop.

Why? Well, that's because most wall street analysts, including a lot of day traders, did not understand the number that is operating margin, even though that phenol revenues phenomenal gross margins phenomenal cash flow people did not understand why the operating margins was only 14.7 percent and they were bothered By that now the reason is because they don't understand how cost structure works for tesla, and that was essentially driven by an sg, a increase of about 340 million dollars, which is a one-time increase just to pay payroll taxes on the options grant for ela. That was exercised from 10 years ago. That's not going to happen again. That's a one-time expense! You got to exclude that if you want to examine the profitability and efficiency of tesla now that number actually puts tesla.

If you remove that 340 million, that's a one-time expense puts them at almost 17 operating margin, that's what they miss and it's unfortunate, but it is what it is now. The other thing i want to explain here beyond the fact what actually pulled the stock down that you have to understand. There's a lot of psychological impact here, you're talking about a company, that's already generating a quite a lot of hype and expectations so for them to meet people's expectations. Every single quarter is extremely hard.

You know people expect tesla to wow people with some new shenanigans. Every quarter and it creates kind of this um, almost kind of a underwhelming effect. I guess every time they post a really good quarter, but with nothing like wow. That's amazing, because not everybody can geek out over finances like i can.

I know you know it is what it is, i'm a geek, but here's the thing, that's kind of why i think it created a massive opportunity. I posted a video yesterday saying this is the last chance to get tesla so cheap, because i think that slowly but surely the analyst on wall street will understand that the operating margin mistake is theirs and it's gon na go back up. I don't know if it's gon na happen tomorrow or next week, but i mean literally it's the last chance. I mean to get it before it explodes, because the future is very bright for tesla and looking at the numbers.

Just the numbers alone are fascinating, but that's not the point of this video look at the cash flow. Look at how much capex they spent you'll see the numbers are phenomenal. They managed to generate you, know two and a half billion in a cash flow. Even though spending two billion on capex building two new factories, they already talked about having 50 more capacity without the new factories.

We the only thing that constrains them from utilizing. That is just chip shortages, so even without berlin and austin they can get to 1.5 million vehicles next year. I i think, if that's the case and if, if they can solve chip shortages and and battery supply chains, they can do 1.8 million next this year. It is, but that's again not the point of this video.

The point of this video is actually quite interesting, so elon musk was on this call and he basically said something that people kind of didn't understand. A tesla bot according to elon is the most important product that tess is currently developing teslabot like what the hell are you talking about. Well, we spoke about it with dave lee on his podcast. Tesla is preparing for the next battleground, which is agi general ai, and basically, there want to be the winner takes all in agi and i think that's tomorrow's battle, which, if you just look at this as a car company, you miss, and i think that's the point.

Elon was trying to make and that's why he was so adamant about fsd. Now fsd is going to be the growth engine for tesla's agi, because when you think about it, fsd creates so much data for tesla and the first iteration of that agi is fsd. Full set of driving so they're pushing hard for that, because that's the next market they're going to pretty much monopolize um, i'm extremely bullish on this, because i can see who's second in this and i talked about it with dave lee. I mean who's second.

Now. More importantly, if you want to look at the short term, why is elon so obsessed with fsd? Why is the call was so much about fsd well think about it. This way, fsd is the sas based revenue stream for tesla, so its margins are probably at 80. Something percent so we're talking about tesla, basically, phasing out the hardware going towards sas so there what it was implying is that tesla is going through the same kind of metamorphosis that printer manufacturers went back in the day, basically figuring out.

Well, these cars are giving us 30 margin. We can sell the software which we have zero cost to scale at eighty percent margin and make a ton of money. So basically he's saying: well, we can commoditize the vehicles and just have people pay for the software every month or every year and create insane margins. So tesla is the first auto company if you can define it as such.

That will probably go into the 80s close to on a big chunk of its 80. I mean gross margin on the big chunk of its revenues, as fsd actually gets released and gets adopted for for wide use. I can't see any other company in the market charging uh whatever like 12 14 000 for fsd, because they have no brand loyalty. When people buy internal combustion engine cars, there's no brand loyalty, there they'll buy whatever you know, they'll change with tesla this brand loyalty people will pay that money because, like the iphone people want the next tesla, it is what it is so fsd not only going to Drive tesla's kind of victory in in the race for a general ai and that's going to be the first iteration.

It's also going to massively increase their margins and create this cash pool for tesla that people haven't seen before now. As far as kind of where i see the future uh, i don't want to talk about 20 30. Some people say well: 10 million 10 million vehicles by 2030. I don't know - probably i think, they'll surprise you with that pace, but my end of year, target price for tesla is fifteen hundred dollars.

My 2024 end of year target price is three thousand dollars and i think that the same people who are telling you the tesla's pe, is so expensive out traces right now and they do have a point i mean the p is over 100, it's very high, but As a rebuttal, i'll just tell you that if they keep growing at this space, they're going to get to apple pe levels within a couple of years, it's not that complicated, but the same people who are telling you well, the pe is over 100. Are the same people who told you to sell tesla when it was at 400 plus, you know pre-split, and you see what happened you know you can choose. Whoever you want to listen to. This is not financial advice, but all i'm saying is you know if you want to get advice from somebody saying the tesla is overvalued, check their track record and sit, and you know check what they said before and it just and i find it amusing how all These tesla haters are crawling from the woodwork right now little cockroaches.

Now that the stock is down 12 percent, oh and they're like giddy about you, know the valuation they're like you know: they're just pathetic weak sheep. That's all i got to tell you. I think it's a great opportunity to get tesla for me and you do you i'll. Do me see you in the next video i'm gon na cut this video short just before the eight minute mark, so we don't get monetized for you know the mid mid ads, see you tomorrow.