Gary Black

US stocks opened higher pre-mkt as oil fell and markets anticipated a positive Trump-Xi summit. Brent dropped 2% to $101.77/bbl, 10yr treasury yields eased, and chip stocks and Bitcoin rose. Last week, the Fed hiked short term rates by 25bp on oil-driven inflation from the Iran conflict; Markets expect a second 25bp hike by year-end. 2026 S&P 500 EPS estimates have continued to climb (+32% y/y to $365) and now imply a 21.0x forward P/E and a 4.8% earnings yield, which is below the 10-year Treasury yield vs a normal equity premium of 50-100bp. For greater detail, please see my daily pre-mkt summary for subscribers.

The cheapest of the Mag 8 on 2026 P/E vs forward long-term eps growth (PEG) is $AVGO at 0.9x (28.0x P/E vs +30% long-term eps growth). The most expensive of the Mag 8 on PEG is $TSLA at 4.8x (222x P/E vs +46% forward eps growth). YTD the best Mag 8 performer has been $NVDA (+20%), which is also one of the cheapest (1.1x PEG); the worst Mag 8 performer has been $TSLA (-18%).

The cheapest of the Mag 8 on 2026 P/E vs forward long-term eps growth (PEG) is $AVGO at 0.9x (28.0x P/E vs +30% long-term eps growth). The most expensive of the Mag 8 on PEG is $TSLA at 4.8x (222x P/E vs +46% forward eps growth). YTD the best Mag 8 performer has been $NVDA (+20%), which is also one of the cheapest (1.1x PEG); the worst Mag 8 performer has been $TSLA (-18%).

Updated: US stocks declined as Brent crude crossed $100/bbl on escalating US-Iran attacks with no peace talks in sight, lifting gold, silver and bitcoin. 10-year treasury yields ticked higher in front of next week’s Fed meeting. $AAPL shares slipped ahead of its foldable-phone event today; $TSLA fell after recovering yesterday following last week’s uncertain Cybercab event. A strong August jobs report Friday has raised odds of a September Fed rate hike to 62%, although I remain skeptical of a Fed hike less than two months before midterms. S&P 2026 earnings ests continue to rise on AI and energy, but at a 21.1x forward P/E the S&P 500 now yields less (4.7%) than 10yr Treasuries (normal equity premium 50-100bp). We remain cautious on $TSLA given declining 2027-2030 earnings estimates, the continued commoditization of unsupervised autonomy, and a stretched valuation (220x forward P/E vs +35% long-term EPS growth, 6.3x PEG).

US stocks searched for direction as Brent crude briefly crossed $100/bbl on escalating US-Iran attacks with no peace talks in sight, lifting gold, silver and bitcoin. 10-year treasury yields ticked higher in front of next week’s Fed meeting. Chip names gained; $AAPL edged up ahead of its foldable-phone launch today and $TSLA slipped after recovering yesterday following last week’s uncertain Cybercab event. A strong August jobs report Friday has raised odds of a September Fed rate hike to 62%, although the I remain skeptical of a move two months before midterms. S&P 2026 earnings ests continue to rise on AI and energy, but at a 21.1x forward P/E the S&P 500 now yields less (4.7%) than 10yr Treasuries (normal equity premium 50-100bp). We remain cautious on $TSLA given declining 2027-2030 earnings estimates, the continued commoditization of unsupervised autonomy, and a stretched valuation (220x forward P/E vs +35% long-term EPS growth, 6.3x PEG).

I can see how amazing the Cybercab technology is from all the videos on line. My question is how to get consumers to choose $TSLA over Waymo, BIDU, WeRide, $PONY, $AMZN, and $NVDA-built robotaxi platforms once there are several robotaxi services all competing with TSLA? Not today of course, but within 1-2 years?

@bvx6x …. Or allow $TSLA stock to fall in front of a merger with $SPCX.

I’ve answered your question several times. There are already five manufacturers ($GOOG $BIDU $WRD $PONY $AMZN) who are already completing over 1M paid unsupervised autonomous rides per week. Add to that list $NVDA who is working with the OEMs to develop fully autonomous vehicles for each. In a commodity business, the winners will be those who can scale and produce at lowest cost (e.g. $TSLA) or those who can differentiate their products in a crowded space through superior marketing (e.g. $AAPL). When TSLA bulls asked me this question in 2021-2023 about who would compete with TSLA in EVs I couldn’t name the 5-6 winners but I was correct that there would be many who would successfully enter the space and keep TSLA from its winner-take-all goal of delivering 20M EVs by 2030. Your focus on which 5-6 will win in supervised autonomy shows your lack of knowledge about the global automotive industry and how innovation evolves and gets replicated.

I’ve answered your question several times. There are already five manufacturers ($GOOG $BIDU $WRD $PONY $AMZN) who are already completing over 1M paid unsupervised autonomous rides per week. Add to that list $NVDA who is working with the OEMs to develop fully autonomous vehicles for each. In a commodity business, the winners will be those who can scale and produce at lowest cost (e.g. $TSLA) or those who can differentiate their products in a crowded space through superior marketing (e.g. $AAPL). When TSLA bulls asked me this question in 2021-2023 about who would compete with TSLA in EVs I couldn’t name the 5-6 winners but I was correct that there would be many who would successfully enter the space and keep TSLA from its winner-take-all goal of delivering 20M EVs by 2030. Your focus on which 5-6 will win in supervised autonomy shows your lack of knowledge about the global automotive industry and how innovation evolves and gets replicated.

“I think Tesla will force Waymo and Uber to cut prices to stay in business but Tesla will take the lion share of the market simply because they can scale up way faster and can run it way cheaper than the rest.” TSLA has no marketing. How will they gain share in autonomous ride hailing against 5-6 formidable competitors who are also good marketers ( $GOOG $BIDU $WRD $PONY $AMZN), and now $NVDA?