Companies

Next week’s soft launch of Robotaxi in Austin matters because the economics of autonomy are compelling. This note outlines sensitivity to both the numbers and the timing of service ramp-up. The bottom line: there's a lot riding on how Robotaxi performs in Austin from a safety standpoint, as autonomy is Tesla's future.

Apple’s AI strategy is becoming more clear. They’re taking a measured approach — they held off on announcing any big AI advancements, stoking concerns that Apple doesn’t get it. They get it, and they have elevated next year's release of a new, supercharged Siri as the critical test of their AI chops.

Tesla will reportedly unveil its robotaxi service on June 12 in Austin on the heels of the Musk vs. Trump drama. The initial launch is said to be small and is of little importance in our eyes. What's of critical importance is whether the President will make it more difficult for Tesla to scale the service, along with its safety track record. My take: Trump will stay on the sidelines given autonomy is central to physical AI, and for the US to be a leader in AI, it also needs to be a leader in physical AI.

We expect this year’s WWDC two biggest announcements will likely be a new look to OS and opening more AI models up to developers. This will leave some investors wanting more in AI, asking how much time the company has before it begins to lose customers. The answer is that they still have a couple of years to get it right, but to do so, they will likely need to increase their AI related investments.

Talk of China curbs having a negative 15% impact on revenue dominated Nvidia's earnings conversation, obscuring the most important takeaway: the company's business is booming, and we are still early in the AI infrastructure buildout. Adjusting for the impact of China, the company would have raised July revenue estimates by 13% versus the Street, compared to an average guide-up of 2% over the previous three quarters. Growth excluding China should be closer to 76% in July, compared to expectations before the April curbs, which called for 60% growth. As for the timing of a resolution in China, reading between the lines, Jensen is suggesting this will get sorted out later this year, and the China opportunity should reemerge.

We expect investors to come away from Nvidia's April results and June guidance with three key takeaways: 1) The revenue impact from U.S. chip restrictions on China will reduce revenue by approximately $15 billion over the next three quarters. 2) This sets up easier y/y comparisons in China for CY26. 3) The ongoing AI buildout remains in its early stages and should partially offset the effects of the export curbs. As a result, revenue growth in CY26 is likely to exceed the current Street expectation of 24%.

Every now and again, innovators share a behind-the-scenes look at their work. Sometimes these breadcrumbs lead us down a dead end; sometimes, however, they lead us down a path of transformation and revolution, a permanent path that forever changes the…

Jony Ive and Sam Altman are making a bold attempt to create an AI-native, screenless computing product lineup that could change how we interact with technology. Ive appears motivated in part to reverse screen addiction and envisions a family of ambient computing devices that fade into the background while putting advanced intelligence everywhere. If successful, the products collectively could equal a few hundred million units a year, compared to the iPhone at just over 200m. Apple’s core business will likely not be threatened, given Ive's vision appears to sit alongside of and beyond the Mac and the iPhone. And any success he might have will likely motivate Apple to enter the space. Google faces more disruption if AI-centric gadgets divert users from the screens they use for Google searches today.

Since Apple Intelligence launched last fall, the company’s AI efforts have mostly amounted to a string of setbacks. The biggest one? The full suite of Apple Intelligence features still hasn’t rolled out and likely won’t for another nine months. That…

Tomorrow’s Google I/O annual developer day is a big deal. It’s the company’s chance to prove it’s not afraid of the innovator’s dilemma and that it’s willing to take bold, outside-the-box steps to stay relevant in generative AI without blowing up the business model that built it.

There’s a shift underway in how people use search and it’s not going in Google’s favor. Last quarter, 56% of total revenue was from Search, and I estimate the segment accounts for 90% of profits. The company is still dominant, but their Golden Goose is falling ill. From Eddy Cue's comments at the Google trial, Apple is seeing declining Safari searches (Google) to rising AI competition, the headwinds are real. The stock may look cheap, but without a clear plan for navigating the post-blue-links world, it's likely going to get cheaper.

While the headlines around Eddy Cue’s testimony sparked concerns about Apple’s reliance on Google Search (shares of AAPL closed down 1%), the financial reality is less alarming. The Apple-Google Search deal contributes roughly 15% to Apple’s operating income. If that revenue were lost or reduced, Apple has several alternatives, including deeper integration with AI partners like OpenAI, Perplexity, and Anthropic, or even launching its own search product within Safari. My biggest concern is that this introduces a new risk factor into the investment case - one that may take time to fully resolve.