Musk Refocuses on Tesla

🚘Elon Musk steps away from Washington and promises to refocus on Tesla after political blowback and sliding earnings.

May 30, 2025

Silver banana goes to…




In this issue of the peel:

  • 📉 HP stock plunges 8.3% as Q2 profits miss the mark—tariffs bite harder than expected despite higher revenues.

  • 🚘Elon Musk steps away from Washington and promises to refocus on Tesla after political blowback and sliding earnings.

  • 📺 Paramount offered $15 million to settle Trump’s CBS lawsuit—but he says that’s not even close to enough.

Banana Bits

The Daily Poll

Will Elon’s return to Tesla fix things?

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Previous Poll:

Consumer confidence bounced big in May. You feel:

About time: 23.6% // Just a blip: 30.3% // Still saving: 22.4% // Wake me when eggs drop 23.7%

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Macro Monkey Says

Trump’s Tariffs Face Legal Hurdle

In a significant legal development, the U.S. Court of International Trade ruled that President Trump's use of the International Emergency Economic Powers Act (IEEPA) to impose broad tariffs exceeded his constitutional authority. 

The court emphasized that only Congress holds the power to regulate international commerce, rendering the administration's sweeping tariff orders invalid.

Despite this setback, a federal appeals court has temporarily stayed the ruling, allowing the tariffs to remain in effect while the appeal is pending. In response, the administration is exploring alternative legal avenues to sustain its tariff strategy. 

One option under consideration is invoking Section 122 of the 1974 Trade Act, which permits temporary tariffs of up to 15% for 150 days to address trade imbalances. This would serve as a stopgap measure while the administration prepares to implement individualized tariffs under Section 301, targeting unfair foreign trade practices.

Legal experts suggest that while these provisions offer a more defensible basis than the IEEPA, shifting to alternative authorities could undermine the administration's appeal by signaling a lack of confidence in the original legal justification. Nonetheless, the administration aims to preserve its leverage in ongoing trade negotiations, asserting that the court's decision jeopardizes discussions with multiple countries.

The Takeaway?

A federal court ruled President Trump's use of emergency powers to impose tariffs unconstitutional, stating that only Congress can regulate international trade. While an appeals court has temporarily stayed this decision, the administration is considering alternative legal strategies, including Sections 122 and 301 of the 1974 Trade Act, to maintain its tariff policies. 

These developments introduce significant uncertainty into global trade dynamics and could impact ongoing international negotiations.

Career Corner

Question

How do you recommend staying in contact with people who are willing to help when recruiting for full-time roles around next year? Is wishing them a Happy July 4th a good way to maintain that connection?

Answer

Yeah, not bad if it's been a few months since you last touched base and you dont have any specific internship news to update them on.

Head Mentor, WSO Academy

What's Ripe

Veeva Systems (VEEV) 19.0% 

  • Veeva Systems' stock rose by 19.0% on Thursday. The surge followed the company’s announcement of its fiscal Q1 2025 results, which exceeded expectations. 

  • Veeva reported total sales of $760 million, up 16.7% year-over-year, surpassing the anticipated $730 million. Adjusted earnings per share were $1.97, a 31.3% increase, exceeding the projected $1.75. 

  • These strong results suggest the company is on track to meet its 2025 revenue target of $3 billion, set in 2019.

Boeing Co (BA) 3.3% 

  • Shares of Boeing rose 3.3% on Thursday, leading gains on the Dow. The rally came after CEO Kelly Ortberg announced that aircraft deliveries to China will resume next month—an encouraging sign following years of regulatory and geopolitical delays. 

  • Investors welcomed the development as a potential catalyst for restoring Boeing’s long-term growth trajectory, particularly in the strategically important Chinese aviation market.

What's Rotten

IONQ (IONQ) 9.2%

  • IonQ Inc. shares fell 9.2% on Thursday. Despite a 95.4% year-over-year revenue increase in 2024, the company reported a significant net loss of $331.65 million, more than double the previous year's loss. 

  • Investor concerns about the company's path to profitability have intensified, expressing reservations about IonQ's valuation, suggesting that the stock may be overvalued given its current financial performance.

HP (HPQ) 8.3%

  • HP Inc.'s stock fell by 8.3% on Thursday. The decline followed the company's announcement of its second-quarter earnings, which revealed a 17% drop in net profit to $700 million, missing forecasts. 

  • The earnings miss was attributed to increased costs from tariffs, despite a 3.3% increase in revenue to $13.22 billion. CEO Enrique Lores noted that while HP has expanded its manufacturing footprint to mitigate trade-related costs, these efforts were insufficient to fully absorb the impact within the quarter. 

Thought Banana

Elon Exits, Tesla Drives On

After a whirlwind 130-day tenure leading the Department of Government Efficiency (DOGE), Elon Musk has officially stepped down from his role in the Trump administration. His departure comes amid mounting criticism over the department's aggressive cost-cutting measures, which included dismantling key agencies like USAID and the Consumer Financial Protection Bureau. 

While the administration touts $175 billion in savings, many experts question the accuracy of these figures, especially considering the concurrent $2.3 trillion tax bill that offsets potential gains.

Musk's political involvement has had tangible repercussions for Tesla. The company's Q1 earnings revealed a 71% drop in net income, with deliveries falling 13% year-over-year to 336,681 units—the lowest since Q2 2022. Analysts attribute this decline to both production disruptions and a consumer backlash against Musk's political affiliations.

In response, Musk has pledged to refocus his efforts on Tesla, promising that his time spent on DOGE "will drop significantly" and that "far more" of his time will be dedicated to the EV manufacturer. This commitment has been met with cautious optimism from investors, with Tesla's stock rallying 23% since Musk signaled his renewed focus on the company during the Q1 earnings call on April 22. 

However, challenges remain, including increased competition from Chinese EV makers like BYD, which sold 416,400 cars in Q1, surpassing Tesla as the world's leading EV seller.

Looking ahead, Musk is betting big on autonomous driving and robotaxis to drive Tesla's growth. He plans to launch a robotaxi service in Austin, Texas, in June, with the goal of having "millions" of Teslas operating autonomously by the second half of 2026. 

While this vision is ambitious, it faces stiff competition from established players like Alphabet-backed Waymo, which currently serves over a quarter of a million paid passenger trips each week.

The Takeaway?

Elon Musk's departure from the Trump administration marks a significant shift in his focus back to Tesla. While his political stint aimed at government efficiency, it coincided with a downturn in Tesla's performance, including a 71% drop in net income and declining deliveries. 

Musk's renewed commitment to Tesla, particularly in advancing autonomous driving, offers a potential path forward, but the company faces formidable challenges from global competitors and the need to rebuild consumer trust.

The Big Question: Can Musk's renewed focus on Tesla reverse the damage from his government gig?

Banana Brain Teaser

Previous

One inch represents 20 miles on Map K and one inch represents 30 miles on Map L. An area of 3 square inches represents how many more square miles on Map L than on Map K?

Answer: 1500

Today

If each of the 12 teams participating in a certain tournament plays exactly one game with each of the other teams, how many games will be played?

Send your guesses to [email protected]

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