Electric Slide: Tesla Misses, Southwest and ServiceNow CEOs, Q4 GDP Beat 01/25/24

Jim Cramer (0:00)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:07)

Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Four straight S&P record highs. The Bulls will shoot for five, as Q4 GDP crushes estimates. Up three, three, Street was looking for two, even as the price index drops to the lowest level in almost four years. Our roadmap begins with Tesla's tumble, though. The first of the mag seven to report, warning of quote, notably lower vehicle volume growth in the year ahead. One analyst calling it a train wreck.

David Faber (0:34)

Plus the S&P 500 is heading for what would be its fifth straight record and GDP growth surging. It was a strong finish to 2023 We're gonna discuss the outlook for rate policy.

And we got a slew of other corporate results to get to as well this morning. Comcast, IBM, Blackstone, Union Pacific, Humana. We're also gonna be joined by the CEOs of ServiceNow and Southwest Air, and that'll be a bit later in the hour.

Carl Quintanilla (1:00)

Actually gonna begin with Tesla down sharply in the pre-market. The EV maker does post a quarterly miss, says it expects notably slower growth in 24 But on the call last night, Elon Musk did express some optimism. Tesla can become the market cap leader.

Elon Musk (1:16)

I do see a path where Tesla could one day be the most valuable company in the world. I don't want to emphasize that as an easy path, a very difficult one, but it is now in the set of possible outcomes.

Carl Quintanilla (1:32)

Jim, not a lot of downgrades today, but plenty of target trimming.

Jim Cramer (1:35)

Yeah, that path that he just referenced, he's not on right now.

This was a combination of an existential and a cyclical crisis. Existential, because we do have the notion, David, that he would like two classes of stock, and he even talks about the rating agencies, ISIS, except for I used to call them ISS. But he also talks about, look, incentives, what you need to have people buy cars, but then he's got Optimist, which is a fantastic video, by the way. But I end up thinking, is there a crisis here or is it just a pause? And I'm not sure, frankly I'm not.

David Faber (2:15)

Just going to take a while to figure it out?

Jim Cramer (2:17)

Well, because to write this guy off.

David Faber (2:19)

Not right there, they're creating the new platform, which is going to lead to the lower priced EVs, but they're not there yet. They made a choice with the Cybertruck that may have really delayed that and is certainly a question mark in terms of strategy.

Jim Cramer (2:33)

Right, because demand is off the hook. I'll use his phrase. David, you know, you get to these, when I say the existential, there's a moment in the Comptroller, he says, well, the Chinese car companies are really great. They will pretty much demolish most other car companies in the world, unless they're trade barriers, that I found daunting. It's daunting to have one of the best investors and inventors in history saying that the Chinese have an edge.

David, throughout this, there are two skeins of thought. One is to give us a chance, okay, it's really going to happen. And then there's this other, like, you know, I think it's Westworld, don't laugh, they're my friends.

I think that we're in video.

David Faber (3:17)

Optimus Robot, which we've enjoyed showing video of late. And he does talk about that. But that's the criticism, of course, Jim, is that, yeah, it was all about the future and Optimus and full self-driving and AI, but it was not much at all in terms of granularity about actual demand and what's going to happen with margins and where price cuts are. I mean, when you come close to losing Dan Ives, you know you're in trouble.

Carl Quintanilla (3:45)

Whose target is still $3.15.

Jim Cramer (3:46)

He had his pink jacket on yesterday, which means the stock is supposed to go up. He will not be wearing that pink jacket anytime soon.

David Faber (3:53)

I mean, yes, to Carl's point, he's still positive, but we were dead wrong, you know, margin structure, fluctuating demand, we got a high-level test long-term view, another train wreck conference call.

Jim Cramer (4:05)

I thought that was unfair to call a train wreck.

David Faber (4:07)

Category four hurricane around price cuts and lack of granularity, guidance and communication from Musk and Tesla, a bitter pill to swallow for the Bulls, and then goes on at the end to say our near-term confidence in the story is shaken.