What to expect from Tesla's Q3 earnings

Ross Gerber, Gerber Kawasaki Wealth & Investment Management CEO joins the Yahoo Finance Live panel to discuss what to expect from Tesla's Q3 earnings.

Video transcript

ZACK GUZMAN: For more on what the listing of that ETF actually means for the crypto space, I want to bring on our next guest, Ross Gerber, Gerber Kawasaki Wealth and Investment Management CEO joins us. And Ross, obviously, you have already given your clients an on-ramp to crypto through your partnership with Gemini. But, you know, we've heard a lot of criticisms about this ETF not giving direct access to spot Bitcoin for investors out there, higher fees for carryover when we're talking about front month contracts and next month contracts. What do you make of today's action in this getting listed?

ROSS GERBER: Well, I think it's an unfortunate step in the history of Bitcoin that the first product on the exchange is an extremely high fee ETF, which will ultimately generate millions and millions in fees for the issuer without providing what I think true value to a crypto consumer, which is owning the Bitcoin or Ethereum yourself.

And I really just don't understand the logic of owning Bitcoin through a high fee middleman, like an ETF issuer, versus just going on to Square or PayPal and just buying it yourself and paying a commission and owning the Bitcoin. But when you own the Bitcoin, you can use it, and it has utility. In an ETF, it has no utility.

ZACK GUZMAN: That's true. I mean, you can use it through the Lightning Network. You can use it for payments that we've talked about have come down in cost. There's also the opportunity to earn yield outside of, you know, just--

ROSS GERBER: That's right.

ZACK GUZMAN: --what's being held here in this ETF. I suppose there is the counter mark or a counterargument here that it is bringing enthusiasm to the crypto space. Maybe investors who just never really wanted to do the homework to learn how to use Bitcoin could still see a pop. We were talking with Fundstrat that said this listing, if it brings in significant inflows, could push Bitcoin's price north of 160,000. So I mean, maybe it's net good, but how are you seeing it as a Bitcoin investor?

ROSS GERBER: Well, obviously, I want--

ZACK GUZMAN: Particularly, what it means for this space, I guess.

ROSS GERBER: Yeah, you know, I want inflows into Bitcoin. And we're invested in Bitcoin. And we're doing Bitcoin for our clients through Gemini. So if you want to buy Bitcoin, and you don't know what to do, you can certainly call my firm or email us. We're happy to show you how to buy Bitcoin. We're taking in millions in Bitcoin deposits from other firms like Coinbase, but also just cash investments into Bitcoin and Ethereum at our firm.

So it's a really coveted area of the market for people. And there's plenty of ways for people to take advantage of it. Also in my fund, in ETF GK, we have exposure through Coinbase, Square, and PayPal, which I think is another great way to get Bitcoin-like exposure in your portfolio versus the ETF. But I think a lot of people just want to have exposure to Bitcoin. And this is a simple way to do it by buying an ETF, even if you're paying outrageous fees for it.

AKIKO FUJITA: Ross, let's talk about a stock you've been-- I know you've been bullish on, and that is Tesla. We've got earnings out this week. The stock up for six straight days. We're still off of the all-time high, but it is inching back closer to that level. To what extent do you think quarterly results could be a catalyst? I mean, what specifically are you going to be looking for?

ROSS GERBER: Well, I caution people. I don't really look at any one quarter in the overall picture of Tesla because it's a long-term investment. And there's a lot of risk, because the stock is very high. That being said, Tesla is killing it on every category they're in, in a very difficult time for auto manufacturers. Tesla isn't having any of these issues. So we've seen record deliveries, and we're going to see record profits. So, to what extent they beat their earnings is really the question. You know, I'm not really concerned whether they beat or not. It's how much.

But I think the overall trend for Tesla is so enormously positive. And for many people, they're finally coming into the full vision of what Elon is building in energy and storage, along with the full self-driving and AI, and then, lastly, with EV production. So it's really almost, like, three separate massive opportunities in one. And so, the valuation for Tesla, I still think is relatively modest, in my opinion, compared to its long-term potential.

AKIKO FUJITA: You said they haven't had issues yet when it comes to chips and part shortages. 241,000 deliveries in the third quarter, certainly a very strong number. To what extent can that momentum continue, though? I mean, Elon Musk seemed to suggest that things are not going to be as smooth moving forward. Tesla is not necessarily immune to the shortages we're seeing with other carmakers.

ROSS GERBER: Right, like, Tesla's incredibly adaptable, so they are having similar issues, but they just adapt so rapidly to the issues around them. But as they ramp Texas, this is going to be a new challenge for Tesla. 2022 is going to be an amazingly successful year for Tesla by the end of the year. But it's going to be an amazingly difficult year because ramping production is the hardest thing you can do for a car company. And certainly, Rivian and Lucid are going through the same issues.

So, as Tesla ramps up the Cybertruck, which is going to be a difficult vehicle to make, they're going to have lots of issues with, whether it be supply chain or just the general production of the car, which is normal for Tesla, which I'm very confident they'll solve. And by the end of the year, we'll have a whole new factory up and running. So, very, very bullish time for Tesla. No other big cap stock is growing as fast as Tesla. And the opportunity is limitless.