# 653 – 🚘 Tesla hits more speed bumps – The Average Joe
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    # 653 – 🚘 Tesla hits more speed bumps

    victorlei

    March 15, 2024

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    Good morning. Ever find yourself mindlessly munching on chips, only to realize you’ve polished off half the bag? It’s a tale as old as time — and a new study unpacks why ultra-processed foods can be so enticing:

    • These snacks undergo a manufacturing process that strips them of their water and fiber content, causing their ingredients to quickly affect our brains.

    • The ingredients often contain high levels of fat and carbohydrates — and while many unprocessed foods are rich in just one of these nutrients, ultra-processed foods combine both, which our brains love.

    Overindulging in ultra-processed foods may impact mental well-being and memory. So, as we make this end-of-week push, perhaps opting for an apple as our morning snack could be a nourishing choice.


    IN PARTNERSHIP WITH RAD AI

    When It Comes To Investing in AI, Nvidia Isn’t The Only Game In Town

    AI impacts almost everything — from improving existing products to making companies more efficient, helping them save millions.

    • Buy now, pay later app Klarna said that its AI assistant is already handling two-thirds of its customer service chats, doing the work of 700 full-time agents.

    • JPMorgan ($JPM) built a cash flow model powered by AI that’s helped some corporate clients slash their workload by a whopping 90%.

    Nvidia ($NVDA) is a prime example of a company riding this wave, becoming the third US company to reach a $2T market cap as it builds the tech backbone for AI.

    However, investors are getting wary of its rapid rise and are seeking new growth opportunities. 50 Park Investments founder Adam Sarhan told Bloomberg, “There’s always going to be a new, shiny object that will propel gigantic gains in the stock market.”

    Where’s the next shiny object?

    To answer that question, let’s delve into the trillion-dollar marketing industry, birthplace of giants like Meta ($META) and Google ($GOOG), and the technology that keeps the ad dollars flowing.

    Take Google’s $3.1B acquisition of ad-tech platform DoubleClick in 2007, which laid the groundwork for its massively successful advertising business. And why is Zuckerberg so interested in AI?

    • It helps Facebook and Instagram show users more relevant content and ads — the more time users spend on its app, the more ads Meta can deliver, and the more money it makes.

    • Meta’s pivot to AI last year paid off handsomely, with its stock soaring nearly 170% in the past year.

    Here’s the opportunity

    Before AI, figuring out whether ads or marketing campaigns would be successful was mostly a guessing game. With AI’s ability to analyze and make sense of billions of data points in seconds, the marketing industry is about to go through its next transformation.

    And at the center of that change is RAD AI — dubbed the “essential AI” for marketers. The AI technology helps brands analyze their content across platforms to figure out what works — helping them identify their ideal customer and how to best message them. They’re in the process of raising their next round of investment. [Get exclusive investor updates here]

    • Backed by industry experts: $28M raised from 6,500+ investors, including venture capitalists and execs at Google, Amazon, and Meta. Backed by Adobe Fund for Design.

    • Proven track record of growth: ~3X revenue growth in 2023 — while landing major clients, including Hasbro, Skechers, Sweetgreen, and more.

    Unlike in the early 2000s, when the internet was taking off, today’s investors have easier access to startup opportunities. This enables investors to get in on startups like RAD AI — while participating in a company’s growth at the earliest stages.

    Learn about RAD AI and receive as much as 20% in bonus shares today.


    LARGECAP RECAP

    🎓 One major hotel chain is betting big on college campuses

    College campuses are booming, but Hilton ($HLT) believes universities are “underserved” and lack nearby hotels. The current high-end options are aging, and the limited-service hotels are too far from alumni gatherings and college sports events. To capitalize on this gap in the market, Hilton decided to invest $210M to purchase Graduate Hotels.

    • Graduate already owns 37 hotels near big US college campuses — and Hilton CEO Chris Nassetta hopes to grow it into a “megabrand” with 400-500 hotels.

    • Nassetta adds that Graduate will offer Hilton an opportunity to get in front of college students and their families, which will “supercharge” the growth of Hilton’s loyalty program.

    March Madness is heating up: NCAA events draw huge crowds, making college sports a lucrative business. Taking advantage of this trend, at least two other competitors to Graduate Hotels have opened in recent months — including a Sports Illustrated hotel by Travel + Leisure ($TNL). Their CEO says, “There’s probably not a more passionate lifestyle in America than college sports” (WSJ).

    🚘 Wells Fargo describes Tesla as a “growth stock with no growth”

    After a sluggish 2023, Tesla ($TSLA) spooked investors by announcing slower growth for 2024, jeopardizing its rich valuation. And now, Wells Fargo forecasts that sales will continue to fall through 2025. This could cause a runaway problem for $TSLA, already down ~33% this year, making it the worst performer in the S&P 500 — as Wells Fargo warns of a further 30% decline in the stock.

    • Tesla has aggressively slashed prices on two models by as much as 11% in the past year to increase demand, but this has only modestly boosted sales among drivers who are skeptical about electric vehicles (EVs).

    • On top of this, the automaker has no near-term prospects for growth — it’s losing market share in China, and Evercore analysts don’t expect its next-gen budget EV until 2027.

    Tesla’s European roadblocks: Tesla could also be forced to “meaningfully lower” its European deliveries this quarter after an environmental group allegedly set fire to an electrical tower at Tesla’s German gigafactory, amid controversy surrounding Tesla’s plan to clear forests for a factory expansion. Adding to the headaches: Tesla workers in Sweden have been on strike for months and are now blockading EV charging stations.


    JOE’S MARKET PULSE

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    Markets & Economy

    Allocating assets in a post-ZIRP world: With the end of the Zero Interest Rate Policy (ZIRP), higher rates bring better bond yields and cash returns, challenging the conventional wisdom that everyone should invest in equities for big gains. TLDR: Opt for bonds for five-year horizons, stick to cash for short-term needs like down payments, and choose equities for long-term savings. [Read]

    Expect more surge pricing at restaurants: The dynamic pricing used by airlines and ride-sharing services could benefit small businesses looking to capitalize on moments of peak demand. But could it scare off inflation-wary customers? [Read]

    EV startup Fisker ($FSR) may file for bankruptcy: Shares are plummeting as the once-promising startup says they’re close to running out of cash. Production is a mess, demand is falling fast, and shares are now down 97% since its 2020 IPO. [Read]

    Business & Wealth

    China calls possible US TikTok ban “an act of bullying”: China’s foreign ministry says the possibility of the US banning TikTok “could backfire.” As the bill moves to the Senate for a vote, its fate remains uncertain — and a big name from the Trump admin is vying to buy the platform. [Read]

    SpaceX launches Starship spacecraft: Musk’s “holy grail” rocket, touted as humanity’s ticket to Mars, successfully launched. But as of Thursday, SpaceX says communication with the rocket has been lost — which, in fairness, they expected to happen. [Read]

    Travel innovator JSX wins fans and federal scrutiny: The company, founded on several FAA loopholes, lets fliers skip TSA lines and fly out of a private hangar — so it’s like you’re flying private but at business-class prices. Now, airlines are going after JSX over its lax safety protocols. [Read]

    *Thanks to our sponsors for keeping the newsletter free.


    PARTNERED WITH JURNY

    AI Has Made This Startup Indispensable to the Hospitality Industry

    Each year, the hospitality industry spends over $355B just on labor costs. And with the industry expected to double by 2028, those costs are only expected to rise.

    That’s where Jurny comes in. Their advanced AI and a partnership with Airbnb has completely changed the game for the vacation rental biz.

    • They help property managers at Airbnbs and hotels automate everything from reservations and pricing to customer service and reputation management.

    • In 2023, Jurny grew its customer base by over 5x, processed $35M+ in bookings, and booked $2.2M in annual recurring revenue.

    Learn more about Jurny & invest here


    CHART


    DIGIT OF THE DAY

    Hidden Fees Could 2X the Cost of Your Next Rideshare Trip

    Hold on tight because your ride to the airport is about to take a pricey detour. While pre-booking your ride might seem like a good idea, this convenience comes with a catch. Scheduling an Uber or Lyft could almost double your fare to popular destinations due to hidden fees and extra charges.

    • Many airports, venues, and congested highways now incur additional surcharges because of government-mandated rules that ride-hailing companies can’t control.

    • Making matters worse, Uber charges extra for shorter trips and reservations — with booking fees recently capped at $10.

    Ride the surge: While these hidden costs increase customers’ total price, they’ve helped Uber ($UBER) turn its first annual profit — and trim Lyft’s ($LYFT) losses. That’s one reason many companies add surge pricing when demand is high. However, not all attempts have been well-received — Wendy’s ($WEN) faced significant customer pushback when it tried to roll out surge pricing.


    EXTRA JOE

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