The Lord (Like Tesla's Stock) Moves In Mysterious Ways

A look at how bad Q1 was and how strange it is for Tesla to be up 23% six days later. Things get progressively worse from Q2 and FSD Unsupervised should disappoint.

This is a long report that started out as an update on notable disclosures in Tesla’s Q1 2025 10-Q and my outlook for 2025, yet wound up with an opening section on the stock’s 23% rally since its 30% EPS miss in Q1 on April 22nd and a short section at the end on FSD (which has 3 video clips from recent drives).

This report has 9 charts, 9 tables of data, and 3 video exhibits. Figures 15-16 show my earnings model, while Figures 17-18 at the end have valuation tables comparing Tesla to its auto industry rivals and its AI rivals in the Magnificent 7.

In Section 3, where a big part of the outlook hinges on Musk’s toxicity to Tesla’s brand, Figure 11 is a great chart, comparing Tesla’s share price to Nate Silver’s poll results of Musk’s favorability in America.

If you make it to the last section on FSD, it’s downhill from there, as the video clips in Exhibits 1-3 speak for themselves and show why Tesla will not likely be launching a “Cybercab” fleet any time soon.

Contents:

Section 1: Tesla Sets New Record For Most Absurd Price Action

Section 2: Notable Disclosures From Tesla’s Q1 2025 10-Q

Section 3: Outlook For Q2 and Onwards

Section 4: FSD is Far From Being Roadworthy

Section 1

Tesla Sets New Record For Most Absurd Price Action

After printing its worst quarterly results since Q2 2020 on April 22nd, Tesla’s stock has rallied by 21%. Trump’s 90-day pause to the tariff war on April 9th led to a stock surge, with Tesla rising even more than the Nasdaq 100. However, as Q1 earnings results approached on April 22, Tesla had fallen back to levels in line with the market’s rise. Tesla missed expected EPS by 30% and EBIT margins by 50%, but instead of a sell-off in the stock, this led to a 21% rise in Tesla, outperforming the Nasdaq 100 by 10% (see Figure 1). In light of the record-high valuations (see Figure 2), this is the most absurd rally in Tesla’s stock since its 91% rise in the 5 weeks after Trump won, with huge options volumes turbo-charging its rise (see Figure 3).

Figure 1: Tesla Outperformed Nasdaq 100 After a 30% EPS Miss

Source: Bloomberg.

Figure 2: Tesla’s Forward Valuation is at All-Time Highs

Source: Bloomberg.

Figure 3: Apr-25 Call Option Volumes Highest Since Election Day

Source: Bloomberg.

All this led me to remember Rule Number 1 in trading Tesla: If the market moves up, Tesla will move much higher than the market and vice versa (see Figure 4). Add to this the fact that Musk is more desperate now to keep the stock price high after so much bad news (Q1 missed by 30% on April 22 and The Wall Street Journal reported that Tesla’s Board began a search for a replacement to Musk as CEO on April 30th) and it’s a bit easier to understand why Tesla made such an absurd move since the bad Q1 results.

Figure 4: Tesla Better in Up Markets; Worse in Down Markets

Source: Bloomberg.

Figure 5 shows all the quarterly results since Q4 2022 and how the stock reacted the day after results either beat or missed (they’ve missed estimates in 9 out of the past 10 quarters). This updated table is from an April 20th report, Trading Tesla on Quarterly Results (link here), which went into detail about how Musk pumps Tesla’s stock on each earnings call, often with blatant lies to prop up the stock.

Figure 5: Tesla’s Quarterly Results & Stock Price Reactions

Source: Bloomberg & Tesla. Quarters highlighted in red are those where Tesla’s stock rose the next day despite big earnings misses.

Here are the key points about Figure 5’s data and some new findings post Q1 2025 results: