Tesla Just Silenced Everyone 🤫

Investors face a dilemma. The S&P, teetering on all time highs, just posted its worst quarter since 2022. Oil was up 94% this year, briefly. And Moody's now puts U.S. recession odds at 48.6%.

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Tesla dropped its Q1 earnings after the bell Wednesday, and the stock popped in after-hours. Not hard to see why.

Revenue hit $22.9B. Up 15.8% year-over-year. EPS came in at $0.41, crushing the $0.35 consensus and absolutely torching the $0.12 it posted a year ago.

That's not just a beat. They spanked expectations.

The margins are the real story here.

Gross margin came in at 21.1%. That’s up from 16.3% a year ago and well ahead of the 17.7% consensus. Operating income surged 136% year-over-year to $900M.

For a company that's been aggressively cutting prices, rebuilding its lineup, and weathering a PR storm, that margin recovery is genuinely impressive.

Free cash flow: $1.4B. Some analysts were bracing for a negative print. They were wrong.

On deliveries… it's a mixed bag.

Tesla delivered 358,023 vehicles in Q1, with 341,893 of those being Model 3/Y. The expiry of the government EV tax credit didn't help demand, but production still hit 408,386 units.

The gap between production and deliveries is worth watching.

Cash on the balance sheet: $44.7B. Yeah, they're fine.

What's coming next?

Management flagged that Cybercab, Tesla Semi, and Megapack 3 are all on track for volume production in 2026. Optimus production lines are being installed now.

FSD subscriptions grew 50% year-over-year. It’s a number that quietly matters a lot as Tesla tries to shift its story from "car company" to "AI and robotics platform."

The 21% gross margin improvement suggests the worst may already be in the rearview mirror.

There is a but though. The valuation is still very stretched. So buckle up.

1. Ride the Tesla Recovery
The margin comeback is real. Gross margin hit 21.1%, free cash flow surprised to the upside, and the bears got burned. The fundamentals are quietly improving.

📌 Action: Consider adding or averaging into $TSLA ( ▲ 0.28% ) on any post-earnings pullback. The trend is turning but size your position carefully given the stretched valuation.

2. Bet on the EV Supply Chain
Tesla hitting 408,386 units in production means suppliers are busy. Battery makers, charging infrastructure, and semiconductor suppliers all benefit when Tesla's factories are running hot.

📌 Action: Look at EV supply chain ETFs like $LIT ( ▲ 2.1% ) (lithium & battery tech) or $DRIV ( ▲ 1.14% ) (global EV & tech) as indirect plays on Tesla's production ramp.

3. Position for the AI & Robotics Pivot
FSD subscriptions up 50% YoY. Optimus lines being installed. Cybercab on track for 2026. Tesla is quietly transforming from a car company into an AI and robotics platform.

📌 Action: If you believe the robotics/AI narrative, $TSLA ( ▲ 0.28% ) at current levels gives you exposure to both. Alternatively, diversify the theme with $ROBT ( ▲ 1.53% ) or $ARKQ ( ▲ 1.8% ) for broader robotics upside.

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Treasury Secretary Scott Bessent confirmed Wednesday that "many" Gulf and Asian allies have formally requested currency swap lines from the U.S. — a direct response to Iran's closure of the Strait of Hormuz and missile strikes on oil infrastructure.

That's a bigger admission than the White House made Tuesday, which only acknowledged talks with the UAE.

Think of it as the Fed lending a country dollars so they don't have to panic-sell U.S. assets to stay liquid. Bessent put it plainly: swap lines exist "to maintain order in dollar funding markets and prevent the sale of U.S. assets in a disorderly way."

Translation: Gulf nations are bleeding oil revenue and need dollars fast. The U.S. would rather lend them than watch them dump Treasuries.

Trump backed the idea for the UAE specifically, telling CNBC: "If I could help them, I would." Senator Steve Daines called it the right move.

Not everyone's cheering though.

Democrats are pushing back hard. Senator Chris Van Hollen put a number on the war's price tag — "over a billion dollars a day in taxpayer money" — and flagged higher gas prices hitting Americans at home.

The pitch from Bessent's camp: swap lines protect the dollar system. The counter from the left: we're already paying through the nose for this war.

Both things can be true at once.

The White House is reportedly set to reschedule marijuana from Schedule I to Schedule III under the Controlled Substances Act. And it could happen as early as Wednesday.

That's a big deal. Schedule III means more research access, an easier path for pharma companies to build cannabis-based medicines, and lighter legal penalties for possession.

What it doesn't mean: federal legalisation. Weed would still be illegal to manufacture, distribute, or possess under federal law. Think of it less as opening the door and more as... unlocking it slightly.

Trump flagged this back in December, saying he was "very strongly" looking at an Executive Order to make it happen. Looks like he wasn't bluffing.

Markets are already celebrating.

Multi-state operators (MSOs) are popping on the news:

Want broader exposure? Cannabis ETFs to watch: $YOLO ( ▲ 17.17% ) $MJUS ( ▼ 2.39% ) and $CNBS ( ▲ 19.59% ).