Podcast Summary: "Robotaxis, Tech Earnings and 24-Hour Trading"

Unhedged, presented by Financial Times & Pushkin Industries, dives deep into the evolving landscape of finance and markets. In the July 22, 2025 episode titled "Robotaxis, Tech Earnings and 24-Hour Trading," host Aidan Reiter, alongside guest John Foley, explores three pivotal topics shaping today's financial world. This summary captures the essence of their insightful discussions, enriched with notable quotes and timestamps for reference.

1. 24-Hour Trading: The Future of Stock Exchanges

Overview: The conversation begins with an exploration of the push towards extending trading hours in major stock exchanges like the London Stock Exchange (LSE) and the New York Stock Exchange (NYSE). Both are contemplating moving beyond traditional hours to embrace a more continuous trading model, influenced by the rise of 24-hour markets like cryptocurrency.

Key Points:

• Current Trading Hours: London operates from 8:00 AM to 4:30 PM, while U.S. exchanges like NASDAQ run from 9:30 AM to 4:00 PM.
• Rationale for Extension: The advent of retail investors trading via smartphones, exemplified by the GameStop saga, underscores the demand for more flexible trading hours.
• Implementation Challenges: Extending hours involves logistical complexities, including software updates, regulatory oversight, and maintaining liquidity without overwhelming markets.

Notable Quotes:

• John Foley [01:28]: "Trading should not be confined to these old-fashioned hours when retail investors are actively engaging around the clock."
• Aidan Reiter [07:23]: "Having only beleaguered and not sleeping people in London is not necessarily the best way to be competitive."

Discussion Highlights:

• Global Momentum: Both LSE and NYSE are exploring extended hours, with proposals aiming for nearly 24-hour operations, albeit with brief overnight breaks.
• Historical Context: In the 1980s and 1990s, there were discussions about 24-hour trading, but human-centric challenges hindered progress.
• Technological vs. Human Factors: While algorithmic trading facilitates longer hours, human factors—like support for CEOs monitoring stock prices at odd hours—pose significant barriers.

Conclusion: The shift towards extended trading hours reflects a broader trend of market globalization and technological advancement. However, balancing operational efficiency with human and regulatory constraints remains a critical challenge.

2. Big Tech Earnings: Navigating the AI Era

Overview: The discussion transitions to the current landscape of big tech earnings, emphasizing the substantial investments in Artificial Intelligence (AI) and their implications for future profitability and market valuation.

Key Points:

• Earnings Focus Shift: Traditional earnings metrics are now overshadowed by AI-related spending and its anticipated long-term returns.
• Investor Concerns: With over $300 billion invested in AI infrastructure, investors are more interested in future guidance and the tangible financial outcomes of these investments.
• Company Strategies:
  • Meta Platforms: Reports rising click-through rates attributed to AI enhancements.
  • Google (Alphabet): Introduced Gemini, an AI model contributing to 30% of its new code, and AI-driven features like AI Overviews, which generate revenue comparable to traditional advertising links.

Notable Quotes:

• John Foley [08:03]: "Investors are looking at where this $300 billion investment in AI is going and what the returns are going to be."
• Aidan Reiter [11:09]: "They're just expecting us to believe that AI investments will turn into something substantial."

Discussion Highlights:

• Performance Metrics: Companies are shifting focus from short-term earnings to long-term AI integration and its commercial applications.
• Market Expectations: There is skepticism about the returns on massive AI investments, with investors demanding clearer guidance and measurable outcomes.
• Growth Realities: Despite high growth rates in cloud computing, mature tech giants face natural deceleration in areas like advertising, challenging their ability to sustain hyper-growth.

Conclusion: Big tech earnings are increasingly defined by AI investments rather than traditional financial metrics. Investors prioritize understanding how AI will drive future revenues, making guidance and strategic clarity more crucial than ever.

3. Robotaxis: Tesla vs. Waymo in the Autonomous Era

Overview: A significant portion of the episode is dedicated to the future of robotaxis, examining Tesla's ambitious plans against Waymo's current market presence and the broader challenges of scaling autonomous taxi services.

Key Points:

• Tesla's Vision: Elon Musk positions robotaxis as a cornerstone of Tesla's valuation, envisioning cost-effective, camera-based autonomous vehicles without the need for expensive sensors like radar and lidar.
• Waymo's Position: Currently the leader in robotaxi services, Waymo operates in San Francisco with plans for gradual expansion. However, high operational costs and technological complexities impede profitability and scalability.
• Challenges for Robotaxis:
  • Technological Barriers: Designing reliable autonomous systems that can handle diverse driving conditions.
  • Cost Issues: Current robotaxi services are more expensive per mile compared to traditional rideshares.
  • Trust and Regulation: Gaining user trust and navigating varied regulatory landscapes remain significant hurdles.

Notable Quotes:

• John Foley [14:01]: "Robotaxis are a big part of the Tesla valuation story, but they are not a big part of the earnings story."
• Aidan Reiter [16:11]: "If Tesla can get it right, theoretically the sky's the limit for robotaxis."

Discussion Highlights:

• Economic Viability: With Waymo's robotaxis costing around $3 per mile versus Uber's $2, achieving cost parity is essential for widespread adoption.
• Tesla's Advantage: Tesla's ability to produce cheaper vehicles could position it to dominate the robotaxi market if it overcomes current technological and trust-related challenges.
• Market Dynamics: Partnerships, like Uber's deal with Lucid Motors, indicate a competitive landscape where traditional rideshare companies are investing in electric and autonomous technologies to stay relevant.

Conclusion: Robotaxis represent a transformative but challenging frontier in autonomous transportation. While Tesla holds potential with its integrated approach to vehicle manufacturing and AI development, overcoming cost, technological, and trust barriers is crucial for achieving scalability and profitability.

4. Long and Short: Investment Insights

Overview: In the concluding segment, "Long and Short," Aidan and John share their investment perspectives, highlighting opportunities and concerns within the current market environment.

Key Points:

• Short Position: Bank Holidays

  • John Foley expresses concerns over proposals to reduce bank holidays in France and the U.S., fearing it could lead to decreased productivity and employee dissatisfaction.
  • Aidan Reiter counters with skepticism about the effectiveness of such measures, especially in regions known for valuing work-life balance.

• Long Position: Measurement Nigeria

  • Aidan points to Nigeria's economy, now calculated to be 30% larger following GDP recalculations, making it an attractive investment opportunity.
  • This adjustment underscores the complexities of accurately gauging economic performance, especially in emerging markets.

Notable Quotes:

• John Foley [18:37]: "I'm sad to say, is bank holidays."
• Aidan Reiter [19:11]: "I am long Measurement Nigeria... Nigeria's economy is now 30% bigger after they recalculated GDP."

Discussion Highlights:

• Policy Implications: Reducing bank holidays may have socio-economic repercussions, potentially affecting worker morale and overall economic productivity.
• Emerging Markets: Accurate economic measurement is vital for recognizing growth opportunities, as evidenced by Nigeria's revised GDP figures.

Conclusion: The "Long and Short" segment provides a nuanced view of market opportunities and policy challenges. While traditional work policies face criticism, emerging markets like Nigeria offer promising investment avenues bolstered by more accurate economic assessments.

Final Thoughts

This episode of Unhedged offers a comprehensive analysis of significant trends in finance and technology. From the potential overhaul of trading hours to the intricate dynamics of AI investments and the ambitious yet challenging pursuit of robotaxis, Aidan Reiter and John Foley provide valuable insights into the forces shaping today's markets. Their discussions underscore the importance of adaptability and informed decision-making in navigating the ever-evolving financial landscape.

Notable Additional Quotes:

• John Foley [17:35]: "If Tesla gets this right, it will pretty effortlessly take over [the robotaxi market]."
• Aidan Reiter [17:47]: "If you're buying Tesla shares, it's probably because you think Elon Musk is going to create this incredible robotaxi business."

Timestamps for Reference:

• 24-Hour Trading Discussion: [01:10] - [07:41]
• Big Tech Earnings: [07:54] - [12:33]
• Robotaxis Segment: [12:50] - [17:47]
• Long and Short: [18:30] - [19:35]

This summary aims to provide a thorough understanding of the episode's content, capturing the essence of the discussions for listeners and non-listeners alike.