What We Learned This Week

Tesla’s "We Robot" was a Bit Odd: Tesla's much-anticipated “We Robot” event last week was, in a word, odd. It was meant to showcase the long-teased fully autonomous robotaxi, and while we did get a glimpse of the futuristic vehicle—resembling a mini Cybertruck—there wasn't much in the way of substance. Elon Musk arrived on stage in the concept car, but instead of offering concrete updates on Tesla’s autonomous driving software or expected timelines, he focused on the broader vision. Musk painted a future where roads would be dominated by robotaxis, reducing travel costs and eliminating the need for parking lots. However, actual details were sparse: the car is expected to cost under $30K, start production by 2027, and feature wireless charging. Realistically, given Musk's track record, we should probably add a few more years and a higher price tag.

In addition to the robotaxi, Tesla also revealed an autonomous “Robovan” concept, which seems even further from reality. The event took another unexpected turn when Musk reintroduced Tesla’s humanoid robot, Optimus. These robots were mingling with guests, but speculation soon arose that their movements were being controlled behind the scenes, which overshadowed the impressive demonstration. All in all, it was a peculiar event. For financial analysts, there were no meaningful near-term details. But for those who believe in Tesla’s long-term vision of autonomy, the event may have reinforced faith in the company's potential—even if the reality is still years away.

Big Tech Going Nuclear: Amazon announced plans to invest over $500 million in nuclear power, driven by Amazon Web Services' (AWS) rapidly growing energy needs as it scales up for AI and generative AI developments. A significant portion of this investment includes a partnership with Dominion Energy to explore building a small modular reactor (SMR) near Dominion’s power station in Virginia. SMRs are compact, advanced nuclear reactors that can be deployed closer to the grid and activated more quickly, making them a crucial part of the strategy to meet rising energy demands. Amazon, now the largest tech company to embrace nuclear power, is following in the footsteps of Google and Microsoft, who are also exploring nuclear energy agreements.

Despite nuclear energy’s historical reputation following a few high-profile disasters, it remains one of the safest and cleanest energy sources available today, with zero emissions and cutting-edge technology that minimizes risks. As energy demand is expected to rise by 85% over the next 15 years, nuclear power offers a critical solution. This move not only helps Amazon meet its energy needs and sustainability goals but also contributes to the broader energy grid, benefiting consumers and reducing reliance on traditional power sources. It’s a big step forward in making nuclear power more widely accepted and utilized in the quest for clean energy.

Big banks are Signaling Cautious Optimism: The nation’s largest banks—JP Morgan, Bank of America, Wells Fargo, and Goldman Sachs—recently reported their Q3 results, offering some positive signs about the health of the consumer and broader economy. These banks are often seen as having one of the best insights into both business and consumer spending, and a recurring theme in their commentary was that the consumer remains healthy and is still spending, though with a more cautious approach. While spending volumes haven’t softened as much as some of the more negative economic sentiment might suggest, there has been a shift toward necessities over discretionary purchases, especially as inflation affects essential goods. The lower-income segments are feeling the most pressure, but the resilient job market has enabled people to maintain their spending power overall.

We also saw a slight uptick in investment banking activity, particularly with companies raising fresh capital through debt and equity markets—an encouraging sign after a prolonged period of uncertainty. While things seem stable, there was a consistent undertone of caution as we approach the election and remain vigilant on inflation.