Motley Fool Money – “Tesla’s Daring Move”
Date: January 29, 2026
Host: Tyler Grow
Guests: Matt Frankel, Jon Quast
Episode Overview
This episode zeroes in on a week packed with corporate earnings, notably Tesla’s bold—and controversial—strategic announcements. Analysts Tyler Grow, Matt Frankel, and Jon Quast dig into Tesla’s ambitious capital spending plans, dramatic shifts in business focus, and the mounting competitive and financial challenges in the EV market. The conversation then pivots to other tech giants, notably Meta and Microsoft, exploring their massive AI-driven capital expenditures and shifting Wall Street sentiments. The episode rounds off with “stocks on the radar,” featuring a fresh set of intriguing investment ideas from outside tech’s “Magnificent Seven.”
Key Tesla Discussion Points
Tesla’s Shocking Capital Spending & Strategic Shift
[00:05] – [02:22]
- Q4 2025 Earnings Recap:
- Tesla reported $0.50 earnings per share (EPS), beating estimates but marking a 63% decline year-over-year—a new Q4 low since 2020.
- Major Announcements:
- Annual capital spending to more than double to $20 billion for 2026.
- Elon Musk signaling plans to build Tesla’s own semiconductor fabrication plants.
- A $2 billion investment earmarked for Musk’s private AI startup, xAI.
- Discontinuation of S and X models to pivot Fremont plant production toward humanoid “Optimus” robots.
- Analyst Reaction:
- Tyler Grow: “Either one, Tesla is pushing all of its ships into the autonomy robot and AI table … or … these ambitious announcements might be papering over the fact that its auto business [is] a little bit in decline and its financials are not what they were.”
- Matt and Jon both weigh in on whether this is a genuine pivot or window-dressing for declining auto performance.
Why Go All-In on Robots and AI?
[02:22] – [05:18]
-
Narrative Over Strategy:
- Tyler points out Musk’s masterful “storytelling,” noting the new mission statement has shifted from “accelerate the world’s transition to sustainable energy” to “build a world of amazing abundance.” The Optimus robot and autonomy focus fit this broader vision.
- “X and S models account for <5% of Tesla’s overall vehicle sales … these models aren’t really selling anyway. It made sense to get rid of them.” — Tyler Grow [03:32]
-
Skepticism About Execution:
- Jon Quast: “I’m not sure how close Tesla is to actually producing a mass-produced autonomous humanoid robot … Musk has said it’s going to be available by the end of 2026, but they don’t have the best track record here. … The new Tesla Roadster was unveiled in 2017 … supposed to be in production by 2020 and now the reveal date is set for April 1st of this year.” [04:30]
-
Matt Frankel on Financial Leeway:
- “It has about $44 billion in cash on the books … with $20 billion in capital expenditures, that’s like two years of investing … before these robotaxi and robot bets really need to start paying off.” [05:18]
Is Tesla Moving Too Fast? Can They Deliver?
[05:18] – [07:38]
-
Capital Usage and Risk:
- Jon Quast: “I don’t think we’re going to see mass production of robots or robo-taxis in two years, but I’m not sure we need to.” [06:55]
- Tyler Grow: “It does need it to pay off though, for sure, because it is investing a lot of resources.” [07:18]
-
Summary Insight:
Matt Frankel: “Today’s announcements really start to set the clock on expectations for robotaxis and humanoid robots in a way that we haven’t seen before in Tesla’s earnings.” [07:38]
Meta & Microsoft: Diverging Market Reactions to AI Spending
Meta’s Earnings & Aggressive CapEx
[08:28] – [11:55]
- Meta’s Q4: Shares up 9% after earnings beat and announcing plans to nearly double 2025 CapEx to $115–135 billion in 2026.
- Investment Focus: Much of this spending supports “the least profitable parts of its company” (Jon Quast) [10:53]. However, strong Q1 guidance reassured investors.
Microsoft’s Cooling Momentum & Ties to OpenAI
- Microsoft: Shares down 12% as Azure cloud growth slowed and CapEx ramped up, with nearly half of future sales backlog now linked to OpenAI investments.
- Oracle Parallel: Similar market reaction as Oracle, whose backlog is heavily dependent on OpenAI.
- Valuation Note: Microsoft now trades at 30x earnings after a 25% stock drop.
Analyst Takes on the Magnificent Seven’s AI Bets
[11:55] – [14:20]
- CapEx, Uncertainty, and the ROI Question:
Tyler Grow: “Can we just pause … and just appreciate the fact that we’re using numbers over a hundred billion dollars here annually? That’s insane that that’s even coming out of my mouth.” [11:57]- Investors are questioning the direct ROI on these investments, especially for Microsoft vs Meta.
- Meta’s Vision:
- Zuckerberg pushing “personalized AI” that creates content tailored to users—potentially delivered in a Metaverse context, maybe through AR glasses.
[14:20]
- Matt Frankel: “Trying to pick the winner each quarter … seems a little bit silly. … This time last year [people said] Alphabet is the AI loser … and then for the rest of the year … everyone started thinking of Alphabet as the AI darling.” [14:20]
- Emphasizes how market opinion is volatile and long-term outcomes are hard to predict.
Stocks on the Radar
[15:27] – [20:13]
Jon Quast: Southwest Airlines (LUV)
[15:27]
- Up 15% after ending free bags and open seating, now matching competitors’ profitability focus.
- “Over the years, Southwest’s biggest strength has been its best-in-breed balance sheet.”
- Now trades for <12x P/E as of episode—low debt vs peers; embracing upcharges could be a game changer.
Matt Frankel: AAON (AAON)
[16:42]
- Makes HVAC and cooling systems, recently acquired a data center cooling company—sales and backlog surging.
- “It’s starting to look like they’re ramping up … bringing data center chilling cooling to the forefront here.”
- A turnaround story—stock still beaten down despite industry growth.
Tyler Grow: Badger Meter (BMI)
[18:39]
- Origin story: “120 years ago, two guys in Wisconsin figured out how to make a water meter that could withstand freezing temperatures.”
- Provides smart water meters, analytics—benefiting from global water management needs.
- Just fell after earnings due to slower—but still positive—growth outlook; margins at all-time highs, pristine balance sheet, 30+-year dividend history.
- “This is the newest stock to my portfolio.”
Notable Quotes & Memorable Moments
- “Nobody tells a better story than Elon Musk.” — Tyler Grow [02:22]
- “Another issue is that I’m not sure how close Tesla is to actually producing a mass produced autonomous humanoid robot like they say.” — Jon Quast [04:24]
- “That’s insane that that’s even coming out of my mouth.” — Tyler Grow, on $100B+ CapEx, [11:57]
- “Trying to pick the winner each quarter … seems a little bit silly.” — Matt Frankel [14:20]
Key Timestamps
- 00:05: Tesla’s earnings and bombshell announcements
- 02:22: Narrative and strategy behind Tesla’s AI/robots pivot
- 04:30: Analyst skepticism on Musk’s timelines
- 05:18: Can Tesla fund these bets with current resources?
- 08:28: Meta vs Microsoft – A tale of two CapEx announcements
- 10:53: How much faith should investors put in OpenAI-driven backlogs?
- 14:20: The folly of picking quarterly “winners” in AI
- 15:27: Southwest Airlines on the radar
- 16:42: AAON and the AI data center picks-and-shovels play
- 18:39: Badger Meter and the emerging smart water space
Tone & Takeaway
The discussion balances healthy skepticism—especially around Tesla’s wild ambitions and the big tech race to outspend rivals on AI—with recognition that these giant shifts do set the tone for capital market expectations. The episode closes with a classic Motley Fool twist: reminders to look beyond “Magnificent Seven” mania and seek overlooked winners in unflashy sectors like airlines, industrial cooling, or water metering.
For investors:
- Watch the real results—AI, robots, and capital burn need payoffs, not just headlines.
- Don’t get swept up in quarterly “winner” noise. Fortunes and narratives can reverse quickly.
- Radical innovation (and risk) is not only in tech—it’s also in how boring companies adapt and thrive.