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Relative Winners and Losers

Names of Note

Tesla (TSLA)

Bull Bullets: Robotaxi commercialization inflection, energy storage TAM expansion, and AI platform re-rating

• Tesla’s Austin Robotaxi fleet has reached 135 vehicles in active service, with commercial expansion to multiple cities planned for 2026 and FSD v14.3 rolling out broadly. Morgan Stanley estimates Tesla’s cost-per-mile at $0.81, well below Waymo ($1.43) and traditional rideshare ($1.71), suggesting a compelling unit economics advantage if regulatory approvals scale. Bank of America reinstated coverage with a $460 target, citing the vision-only approach as a scalable cost advantage.

• Tesla Energy is emerging as a meaningful profit contributor, generating $12.77 billion at ~30% margins in FY2025 and targeting further scale via the Shanghai Megafactory and Megapack 3 launches. This high-margin business diversifies Tesla away from the increasingly competitive EV market and could contribute ~25% of total company profits in 2026. The energy storage TAM is expanding rapidly as global demand for grid-scale battery solutions accelerates.

• The Cybercab production ramp beginning this month, Semi volume production plans, and Optimus v2.5 commercial sales expected by late 2026 collectively represent optionality that is not fully priced in many analyst models. FSD subscriptions grew 38% year-over-year to 1.1 million, validating the software monetization flywheel. Strong European demand (France +203%, Denmark +144% Q1 registrations) suggests the refreshed Model Y is resonating.

Bear Bullets: Q1 delivery miss, brand damage from political association, and extreme valuation disconnect

• Q1 2026 deliveries of 358,023 missed consensus by ~7,600 units, with energy storage at 8.8 GWh missing by nearly 40%. Tesla produced ~50,000 more vehicles than delivered, extending an inventory buildup pattern that signals weakening demand. Full-year 2025 deliveries, revenue, and earnings all declined, and BYD has surpassed Tesla as the global EV leader with 2.26 million units delivered.

• CEO Elon Musk’s political activities have generated measurable brand damage and demand headwinds in key markets. Federal EV tax credits have expired, intensifying price competition. With only 14.5% of prediction market participants believing Tesla will launch robotaxis in California by June 2026, the autonomous timeline carries substantial execution risk. The 13 Buy / 11 Hold / 6 Sell analyst split reflects unusually elevated sell-side skepticism for a mega-cap.

• At a ~$1.16 trillion market cap and ~20% YTD decline, Tesla’s auto business alone cannot justify the current valuation — the thesis rests entirely on AI and energy optionality that remains pre-revenue at meaningful scale. If Cybercab production slips, robotaxi expansion stalls, or FSD safety data disappoints, the stock’s premium over traditional automakers could compress dramatically.

Key Investment Thesis

Tesla is an electric vehicle manufacturer and energy company that is pivoting toward autonomous driving, robotics, and AI infrastructure.

Upside Case: If Cybercab production ramps on schedule, robotaxi expands to multiple cities with favorable unit economics, and FSD v14.3 demonstrates measurable safety improvements, Tesla’s transformation from hardware-margin auto company to high-margin AI/services platform would justify — and potentially exceed — the current valuation.

Downside Case: Continued delivery misses, energy storage deployment shortfalls, and failure to achieve unsupervised FSD regulatory approvals in major markets would expose the trillion-dollar valuation as premature — particularly if the political brand headwind persists and BYD continues gaining global EV share.

Differentiation: Tesla is the only company simultaneously pursuing volume EV manufacturing, autonomous driving deployment, grid-scale energy storage, and humanoid robotics — a breadth of AI-physical integration that no competitor matches, though it also creates execution complexity across multiple capital-intensive frontiers.

ServiceNow (NOW)

Bull Bullets: AI workflow automation demand, Now Assist scaling toward $1B ACV, and resilient enterprise positioning

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Relative Winners and Losers

Names of Note

UnitedHealth Group (UNH)

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Examples for Tesla and UnitedHealth below:

Looking at the data heading into Q1’26, the setup leans short (or at minimum, stay away). Here’s why:

Valuation is stretched. The 14.7x forward P/S is the highest in the entire table — above even the Q3’25 print (14.4x) which only got a +2.3% reaction despite a beat. You’re paying peak multiple into the print.

Relative performance has already faded. Down 983 bps vs. SPY since last quarter, which historically has been a mixed signal — but combined with the elevated valuation, it suggests the stock has given back some froth without getting cheap.

Forward growth estimates are uninspiring. NTM Rev growth at 7.6% and NTM EPS growth at 10.9% are near the lowest in the table. You’re paying the highest multiple for the weakest forward growth setup — that’s a bad combination.

The pattern on beats at high multiples isn’t great. Q3’24 (6.2x, +20.8% beat → +21.9%) worked because the multiple was compressed. Q4’22 at 4.3x got +11%. But when the multiple has been elevated (Q4’25 at 13.5x, beat of 11.9% → -3.5%; Q2’25 at 10.4x → -8.2%), beats haven’t been rewarded.

Short interest at 2.0% is low, so there’s no squeeze fuel to bail out longs on a miss.

Options are implying ±4.0%, so the market isn’t pricing in a huge move — but the risk/reward skews negative given the valuation/growth mismatch. A miss or even a meet could easily take it down 4-8%, while a beat at this multiple may get sold into (as Q4’25 showed).

The cleanest expression is probably a short or a put spread into the print, with the thesis that the multiple doesn’t deserve to expand further without a material growth re-acceleration.

This one’s interesting — it leans long, but with caveats. Here’s the read:

Valuation has compressed meaningfully. 18.2x forward P/E is well off the 20-22x range it traded at through most of 2022-2023, and down from the 21.9x at Q3’25. At 83% vs. SPY, that’s the cheapest relative valuation since Q2’24 (75%) — and that quarter got a +5.2% reaction on a 4.9% beat.

The stock has been outperforming into the print. +932 bps vs. SPY is a strong run, which could cut both ways — but historically UNH has been rewarded when it comes in hot with a compressed multiple. Q1’25 (+2,704 bps, 19.0x P/E → +22.4%) and Q2’23 (-2,156 bps but 17.1x → +7.2%) show the pattern.

NTM Rev growth at (1.6%) is the red flag. That’s the worst in the entire table — negative forward revenue growth is ugly for a name that’s reliably grown top-line 7-12%. NTM EPS at 9.5% is fine but not exciting. If that negative rev growth estimate is right, it could cap upside.

The Q4’25 disaster is the elephant in the room. -19.6% on a 0.4% beat at 20.0x — that was a blowup driven by the medical cost ratio / guidance issues, not the beat/miss itself. The question is whether that risk has been repriced at 18.2x and 83% relative.

Consensus revisions aren’t visible yet for Q1’26, but the prior pattern shows analysts have been cutting — the stock is trading like expectations have been reset.

Short interest at 2.0% is elevated for UNH (historically 0.5-1.5%), which adds squeeze potential on an upside surprise.

Options imply ±5.5%, and the stock is trading well above both the 200D and 50D (+3.8%/+13.4%), suggesting momentum support.

The bull case: Expectations and valuation have been reset after the Q4’25 blowup, the stock has been recovering, and a clean print with stabilizing medical cost trends could squeeze shorts and push it 5-8% higher. The compressed relative valuation gives you a margin of safety you rarely get with UNH.

The risk: If medical cost pressures persist or guidance disappoints again, the Q4’25 playbook repeats and the +932 bps run gets unwound.

Net, I’d lean long — the valuation reset and elevated short interest tilt the risk/reward favorably, but I’d size it smaller than normal given the tail risk from the cost ratio narrative.

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Relative Winners and Losers

Names of Note

Tesla (TSLA)

Bull Bullets: Robotaxi commercialization inflection, energy storage TAM expansion, and AI platform re-rating

• Tesla’s Austin Robotaxi fleet has reached 135 vehicles in active service, with commercial expansion to multiple cities planned for 2026 and FSD v14.3 rolling out broadly. Morgan Stanley estimates Tesla’s cost-per-mile at $0.81, well below Waymo ($1.43) and traditional rideshare ($1.71), suggesting a compelling unit economics advantage if regulatory approvals scale. Bank of America reinstated coverage with a $460 target, citing the vision-only approach as a scalable cost advantage.

• Tesla Energy is emerging as a meaningful profit contributor, generating $12.77 billion at ~30% margins in FY2025 and targeting further scale via the Shanghai Megafactory and Megapack 3 launches. This high-margin business diversifies Tesla away from the increasingly competitive EV market and could contribute ~25% of total company profits in 2026. The energy storage TAM is expanding rapidly as global demand for grid-scale battery solutions accelerates.

• The Cybercab production ramp beginning this month, Semi volume production plans, and Optimus v2.5 commercial sales expected by late 2026 collectively represent optionality that is not fully priced in many analyst models. FSD subscriptions grew 38% year-over-year to 1.1 million, validating the software monetization flywheel. Strong European demand (France +203%, Denmark +144% Q1 registrations) suggests the refreshed Model Y is resonating.

Bear Bullets: Q1 delivery miss, brand damage from political association, and extreme valuation disconnect

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Relative Winners and Losers

Names of Note

Steel Dynamics (STLD)

Bull Bullets: Aluminum Ramp, BlueScope Acquisition, and Tariff Tailwinds Drive Multi-Year Growth

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First, Consensus expectations:

Next, historical valuation context (hot but hot as hot as last Q and with better forward revenue expectations):

And finally, our Bull / Bear Bullets (also found for all reporters of note here):

Bull Bullets: High-NA EUV Ramp, AI-Driven Lithography Intensity, and $34–39B Revenue Guide in Sight

• TSMC’s projection that Nvidia product wafer requirements will grow from ~2.5 wafers to ~10 wafers by 2027 illustrates the dramatic increase in lithography intensity driven by AI chip complexity — ASML, as the sole supplier of EUV systems, is uniquely positioned to capture this step-up in demand through increased system shipments and service revenue on its growing installed base.

• ASML’s Q4 2025 EUV bookings of €7.4B out of total net bookings of €13.2B demonstrate robust order momentum entering 2026, and management’s 2030 revenue target of €44–60B with 56–60% gross margins implies a multi-year earnings compounding story that the current €34–39B 2026 guide represents only an early chapter of.

• The new €12B share buyback program (to be completed by end of 2028) combined with a proposed total dividend of €7.50 per share signals management confidence in free cash flow durability — as interest rate uncertainty subsides and AI capex cycles accelerate, ASML’s cash returns profile could support meaningful multiple expansion.

Bear Bullets: Tariff Uncertainty, Booking Miss, and China Normalization Risk Weigh on Near-Term Outlook

• Q1 2025 net bookings of €3.9B missed analyst estimates, and ASML’s CFO explicitly warned that tariff announcements have increased macro uncertainty — with Q2 2026 revenue guidance guided below consensus (€7.2–7.7B vs. €7.73B expected), bookings in the upcoming Q1 2026 report will be the single most watched data point, and another miss could reignite fears that the 2026 growth ramp is slower than modeled.

• Global tariffs present a structural cost risk: ASML’s components cross the Atlantic multiple times during manufacturing and assembly, making it unusually exposed to bilateral tariff escalation between Europe and the U.S. — while ASML intends to pass costs to customers, doing so could slow order velocity from cost-sensitive foundry customers.

• China revenue is guided to normalize toward ~20% of total sales in 2026 (down from elevated levels in 2024–2025 as customers front-ran export restrictions), and any regulatory tightening of DUV export controls would reduce a meaningful revenue buffer that has been supporting near-term financials.

Key Investment Thesis

ASML is the world’s only manufacturer of extreme ultraviolet (EUV) lithography systems, the critical technology required to produce the most advanced semiconductors used in AI, mobile, and high-performance computing applications.

Upside Case: AI-driven chip complexity continues to increase lithography intensity per wafer, high-NA EUV systems ramp into volume production ahead of schedule, and ASML’s installed base expands toward its 2030 targets — driving a multi-year compounding of both system revenue and high-margin service revenue, with gross margins approaching the 56–60% long-term target range.

Downside Case: Macro uncertainty and tariff-driven cost pass-throughs slow customer investment decisions, China revenues compress faster than anticipated as export controls tighten further, and 2026 bookings disappoint relative to what’s needed to sustain ASML’s growth narrative into 2027–2030.

Differentiation: ASML’s monopoly on EUV technology — protected by decades of R&D investment, proprietary optics from Carl Zeiss, and an ecosystem of 5,000+ supplier relationships — creates an effectively insurmountable competitive moat that no geopolitical or regulatory action is capable of quickly displacing.

More than a few Twitter personalities said this with a mixture of sincerity and sarcasm after the 8PM ET Friday announcement from Nasdaq that SanDisk (SNDK) would replace Atlassian (TEAM) in the Nasdaq-100 (link).

Why? Well let’s take a look at an all too familiar stock (for most), Super Micro Computer (SMCI).

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Relative Winners and Losers

Names of Note

Netflix (NFLX)

Bull Bullets: Ad Revenue Doubling, WBD Exit Clarity, and Margin Expansion Fuel Re-Rating

• Netflix’s advertising business more than doubled to ~$1.5B in 2025 and management has guided for it to roughly double again to ~$3B in 2026, representing a meaningful and still underappreciated revenue layer that carries structurally higher margins than subscription revenue — if this ramp materializes on schedule, consensus estimates may prove conservative.

• The abandoned Warner Bros. Discovery bid — which Paramount Skydance ultimately won — removes a massive overhang: Netflix retains a $2.8B breakup fee, avoids billions in acquisition debt, and can now execute its organic growth roadmap with full capital flexibility, including an $8B remaining buyback authorization that could be deployed aggressively in 2026.

• Live sports monetization (ad-supported viewers don’t skip ads and command premium CPMs) and a redesigned mobile interface planned for late 2026 are forward catalysts that the market has not fully priced in; Netflix management is guiding to $51B revenue and a 31.5% operating margin in 2026, reflecting continued operating leverage as content spend grows slower than revenue.

Bear Bullets: WBD Overhang Lingers, Content Cost Headwinds, and Valuation Leaves No Room for Error

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For now, the growth rate somewhat (arguably) matches the valuation, as it remains closer to the trendline than Cloudflare. But what if Claude is about to completely derail the next 2-3 years of growth? Let’s dive in…

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First the historical valuation context:

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Relative Winners and Losers

Names of Note

Delta Air Lines (DAL)

Bull Bullets: Demand Acceleration, Premium Mix Advantage, and Valuation Reset Opportunity

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One candidate sticks out like a sore thumb:

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