Ryan
Sep 6, 20235 min
Let’s get right into the news from this week!
Tesla
You’ve probably heard by now but, Ford and GM announced that its new models, starting in 2025, would use Tesla’s NACS (North American charging standard) and thereby have access to Tesla’s 12,000-strong supercharger network. It’s a testament to Tesla’s dominance in electric vehicles. Ford and GM see Tesla as having such a lead that it’s not even worthwhile to create another, duplicate charging network. Tesla’s is already big enough.
The other charging companies like Blink and ChargePoint came out and agreed to adopt NACS as well. These announcements won’t contribute that much to Tesla’s revenue but it is a sure sign that these companies view Tesla as the standard. One thing I’m worried about is that after 2025, these charging stations won’t be plentiful enough to satisfy Ford, GM, and Tesla owners. On the other hand, all three of these companies, along with pretty much every charging company, is now building these superchargers and hopefully the pace of adding chargers will be faster than the purchases of electric vehicles. When you dig down a little bit, one industry that will likely benefit disproportionately is the utilities. While their margins are capped, the extra revenue from EVs will likely give them a little boost over the upcoming decades.
Rivian also just recently announced adoption of the NACS by next year. It’s clear that this is THE standard and it’s a testament to Tesla’s leadership in the industry.
In other Tesla news, the company said they would announce the next gigafactory location by the end of the year. After Elon’s most recent visit to India to visit with the country’s prime minister, there were rumors swirling. However, the latest is that both parties aren’t budging on terms so we can’t say for sure that the next location will be India.
Lastly, Cars.com puts out an annual American-made index, highlighting the best American cars from the past year. There are five main inputs – assembly location, parts content, engine origin, transmission origin and U.S. manufacturing workforce. So it’s really more of a manufacturing contest rather than purely from a popularity standpoint, though the Model Y scores #1 globally in popularity these days. Even still, in this Cars.com index, Tesla made a clean sweep, with its four models coming in the first four spots. You can read the report here if you’re interested.
MercadoLibre
MercadoLibre has been making some big logistics investments in Mexico and Chile. The company has already invested $1.6 billion in Mexico this year and plans to invest $420 million in Chile. On the last earnings call, management noted that this fiscal year would include incremental capex, primarily on the logistics front. I like to see the continued investment despite almost every other tech company focused on reigning in spending.
Snowflake
Recently, the company hired Tyler Prince to be the head of its partner network. Prince has been doing the same job at Salesforce for the last 10 years. This is meaningful because Salesforce’s partner network is extremely strong and it’s a testament to the type of talent that Snowflake can attract. This is something I would like to pay attention to more as I saw some of the writing on the wall with SentinelOne and didn’t pay close attention. The execs truly know what’s going on in these businesses and high profile ones like this definitely do their homework before making the jump.
Cloudflare
Cloudflare recently announced a partnership with Databricks that would bring the company’s R2 product to Databricks’ Delta sharing standard. This is a good move for Cloudflare but I would like to see a partnership with Snowflake as well. In my mind, it makes sense to integrate with the most platforms as possible but it may be that Databricks wants a more exclusive relationship. The press release doesn’t mention exclusivity anywhere so I would like to see Cloudflare and Snowflake collaborate as well. Databricks is certainly the main private competitor to Snowflake so it’s one that I try to keep a close eye on.
Axon
CHRISTUS, the 10th biggest non-profit hospital system, just signed a new deal to equip their security guards with Axon body cams. Security guards are a slightly newer vertical compared to police officers so it’s a good sign to see more contracts being signed.
Ethereum
BlackRock filed an application for the first ever spot Bitcoin ETF. This is different from the GBTC equity because a spot bitcoin ETF could buy bitcoin at the end of the trading day to bring the fund's assets in line with its price. It seems like semantics but it’s very important for large institutions to have an accurate daily net asset value. I wouldn’t be surprised to see a filing for Ethereum at some point as well.
New Company
The latest company I’ve been studying is Samsara. The company has put in a couple of really great quarters and is officially now free cash flow positive. I love finding companies that are inflecting on profitability as it usually indicates their long-term investments are really paying off. Samsara is an internet-of-things platform hence the ticker: IOT. They sell monitors, cameras, and sensors that go on physical assets like machines and trucks that send all of that data to the cloud to be analyzed and visualized in a dashboard for customers. The idea is that you would easily be able to locate all of your assets and understand what is really going on. For instance, the dashcams save customers a ton of money when providing evidence to insurance companies if there’s an accident. Or a sensor on a tractor may trigger an early warning that a part should be replaced. Or maybe a rental car company just wants to identify a correlation between customer demographics and car accident data to create better pricing data. The possibilities are wide and far-reaching. The company is growing just over 40% which isn’t mind-blowing but management is very quality. The co-founders sold Merakai to Cisco for over $1 billion before founding the company. At a $14 billion enterprise value on $700 million in revenue, the valuation is up there with Snowflake despite growing at a similar rate at a much smaller revenue base and not nearly as profitable. I’ve certainly been wrong to be on the sidelines so far but I’m still learning about the business and some of the use cases – I just wanted to put it on your radar if it’s not already.
Conclusion
In other news, we have finally created an official referral link for members. You can get your own link [HERE]. For every new referral that signs up, both of you will get a free month of the Dynasty Membership. If you refer 5 five people, then you would get 5 free months. Thanks for the support!