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☕️ EPS schmEPS – Tesla builds a new industry every quarter

Oct 23, 2025

Howdy! 👋

Current market action is so predictable it’s almost laughable if you know what to look for.

In fact, it’s like an old country song you play backwards.

The dog comes home, the tractor works, the fields plow themselves, and the truck won’t break down. 🤣

Don’t take your eye off the ball.

According to FactSet, 86% of the S&P 500 companies that have reported so far have turned in positive earnings surprises while 84% of ‘em have reported positive revenue surprises. What’s more, the blended growth rate is 8.5%, which – if it stands – will be the 9th consecutive quarter of growth.

Look, I won’t pull any punches this morning.

If you’re scared, skeptical or just plain uncertain, you’re not alone.

I get it.

Here’s the thing I want you to internalize any way you must.

History shows very clearly that the markets are great at making you uncomfortable in the short term if you’re in ‘em but the very best in the world at making you uncomfortable longer-term if you’re not.

Here’s my playbook.

1 – EPS schmEPS – Musk builds a new industry every quarter

Tesla reported earnings. (Read)

Revenue came in at $28.1 billion, up 12% YoY, beating analyst expectations of $26.37 billion.

Earnings per share were $0.50 adjusted, versus $0.54 expected.

Right on cue and predictably, the spreadsheet gang is fixated on tariffs, policy uncertainty, rising competition, slower deliveries, and European softness. Aka, the stuff everyone sees. 🤦‍

Keith’s Rule of the Back Page applies in spades.

We’ve talked about this before but if you’re just joining us, here’s the skinny.

If there’s one thing I’ve learned in the 45+ years I’ve been involved in global markets, it’s that the biggest, best, and most profitable stories are almost always found where few people are looking… on the back page.

Tesla’s results are a case in point.

The company posted record quarterly revenue and $1 billion in energy profit from its Energy Generation & Storage division, which grew 44% YoY to $3.42 billion.

Internalize that for a moment.

That’s now roughly a quarter of total company revenue, exactly as I suggested it would be a few years ago when more than a few folks laughed in my face for saying as much.

Elon also said Tesla expects to have no safety drivers in large parts of Austin by year-end, a milestone that could massively accelerate FSD validation and data scaling.

Meanwhile, cash and investments rose $4.9 billion to a record $41.6 billion (+24% YoY), giving Tesla enough firepower to self-fund Robotaxi, Optimus, and production expansion — no need to pass the hat around Wall Street.

And ALL of this has happened while Unka Elon and the team have been developing unsupervised self-driving, a humanoid robot, a super app, space program, tunneling and more.

Even Tesla’s “Services & Other” business is now lifetime profitable on a gross-margin basis, setting a record at 10.5%.

Oh, and the company logged just one crash per 6.36 million miles driven in Q3. It won’t be long before your insurance company jacks premiums if YOU want to drive instead of letting the car drive. But that’s a story for another time.

And not last nor least, Musk just said that Optimus will be the best surgeon on the planet, also something I’ve been insisting would be the case for years. In fact, he described Optimus as having “fine motor control suitable for medical and manufacturing environments” and called it … ta da… a trillion-dollar opportunity hiding in plain sight.

No word on what I call “proxy tourism” yet but given Neuralink’s progress, my guess is that’s not far away either. I see a future where you’ll be able to load yourself into a robot then visit, work, walk and otherwise live life remotely.

You know what to do.

Keith’s Investing Tip: Earnings are a sideshow and a badly run circus at this point. Wall Street’s focused on the short-term EPS miss, but that’s noise. The “signal” is almost always hiding in plain sight. And that’s what you want to focus on as an investor.

2 - So why’s Tesla stock dropping?

It’s the oldest game in the book.

Wall Street’s apex predators count on the fact that most of the investing public doesn’t understand what I am about to share with you.

They know the Joe and the Joanne Average will buy into good earnings, so they – the big-money predators – sell.

Remember, every buyer has a seller, something we’ve talked about many, many times.

Still not putting two and two together?

In other words, Wall Street knows that your FOMO is their exit.

What’s more, they also know a two-fer when they see one. That’s why they then sell hard enough that all the fresh buyers get blown out again by “running the stops” – a nasty sport meaning that Wall Street’s traders immediately drive prices low enough to fleece the weak money who think they’re being smart by placing “trailing stops” to protect their sparkling new, FOMO-purchased shares.

Sorry to be so blunt, but now you know.

The average investor is playing stocks, but Wall Street is playing the investing public.

It’s not personal, it’s their job.

🚨DO.NOT.FALL.FOR.IT 🚨

Instead, use tactics that take away Wall Street’s advantage… tactics like those that I regularly share with the One Bar Ahead® Family. Something as simple as DCA works wonders in this department.

No scratch that, especially in this department.

To paraphrase Unka B., Wall Street is simply a mechanism “for transferring money from the impatient to the patient.”

Keith’s Investing Tip: Know who you are, or Wall Street will figure that out for you, usually when you least expect it!

3 – The real “killer app”

GM made headlines yesterday talking about the company’s desire to field a car that “knows you” by 2028. (Read)

Let that sink in.

… by 2028 🤦‍

Contrast that with what Tesla CEO Unka Elon Musk said yesterday.

"Here's the thing, the simple killer app is if you can text in the car. If we can get unsupervised FSD to be so good that you can text and drive, everyone will buy the car. I am 100% confident we can make this happen."

Ummm, yeah.

I may not own enough shares. 🤷🏻‍

Trade Idea: Deep in the money calls could be a great way to augment core shares you already own, particularly if you want a more cash-efficient way to control a bigger slice of the pie. LEAPs, too.

4 – AI is the number one reason customers are signing new deals

Contrary to what many will think, there’s more to this than just Tesla.

Case in point, German software giant SAP reported Q3 revenue of €9.08 billion, up 7% YoY, with cloud revenue jumping 22% thanks to booming AI demand. (Read)

CEO Christian Klein said AI is now the number one reason customers are signing new deals — and by the end of Q4, 85% of SAP’s 2026 revenue will already be locked in.

That’s as good a visibility statement as you’ll find anywhere in enterprise tech.

The official story is that shares still dropped about 2.5% on the news because guidance came in at the low end of expectations but – based on what I’ve just explained in #3 – you know the real reason.

5 – Unka Sam goes quantum

Reports suggest this morning that the U.S. government may soon take equity stakes in several leading quantum-computing companies — including IonQ, Rigetti, and D-Wave Quantum — as part of a new Commerce Department initiative to fund critical technology. (Read)

Right on cue and rightfully so imho.

If China beats the U.S. to the punch, it’s game over.

For our financial system, national security, data, privacy and more. (Read)

Scary?

No doubt.

But also in the same breath, one of the single biggest opportunities in recorded human history.

At the risk of sounding like a broken record, every business on the planet will adapt, adopt or die.

Invest accordingly.

Speaking of which, the right quantum computing companies could make Palantir look like child’s play in a few years’ time… and that’s saying something considering Palantir’s long been a fave and returned ~1,789.09% since it went public via a direct listing.

And if you want some help staying ahead of the next great run higher, I’ll be here.

People regularly tell me that what I share here in the 5 with Fitz and the more detailed research I share with the One Bar Ahead® Family has changed their lives and their financial future forever. I’d hate to see you miss the train if that’s a concern you have. Learn more

Buy the best, ignore the rest.