The Prof G Pod with Scott Galloway
Prof G Markets: Nvidia Earnings are the Super Bowl of Business + Trump’s $5 Million Gold Card
Mon, 03 Mar 2025
Follow Prof G Markets: Apple Podcasts Spotify Scott and Ed open the show by discussing Tesla’s shrinking market cap, Berkshire Hathaway’s record-breaking tax bill, and BP’s pivot back to fossil fuels. Then they break down Nvidia’s earnings, explaining why investors weren’t impressed even though the company surpassed expectations. Ed shares why he still sees it as a win, despite Nvidia’s stock dipping slightly. They also discuss Trump’s new gold card visa program and explain why demand is more limited than the president thinks. Scott warns that the program could attract shady characters trying to buy their way into America. Subscribe to the Prof G Markets newsletter Join us for a live recording at SXSW Order "The Algebra of Wealth," out now Follow the podcast across socials @profgpod: Instagram Threads X Reddit Follow Scott on Instagram Follow Ed on Instagram and X Learn more about your ad choices. Visit podcastchoices.com/adchoices
Chapter 1: What are Tesla's current challenges?
This isn't CNBC. Agreed. Let's start with our weekly review of Market Vitals. The S&P 500 declined, the dollar rose, Bitcoin fell, and the yield on 10-year treasuries hit its lowest level since December. Shifting to the headlines. Tesla's market cap has fallen below $1 trillion, erasing nearly all of the stock's post-election gains.
Shares are down more than 25% so far this year, as investor concerns mount over growing competition and Elon Musk controversies. Warren Buffett announced that Berkshire Hathaway paid nearly $27 billion in taxes in 2024. That is the largest tax bill ever paid by a US company, accounting for roughly 5% of all corporate income taxes collected in the country that year.
And finally, BP announced it is shifting back to fossil fuels and scaling down investments in green energy. The company plans to spend around $10 billion a year on oil and gas to win back investors after its fourth quarter profit hit a four-year low. Despite that move, BP shares closed down about 1.5%. Scott, we'll start with Tesla, and I'm bracing myself for your victory lap here.
You predicted on February 13th.
I can't help it. I'm a broken clock here. Tesla is imploding. I think the stock is below $200 in the next six months.
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Chapter 2: Why did Tesla's stock fall?
It was trading at $356 a share then. We're not below $200, but we're now at $286. So it's down 20% since your prediction. Take it away.
I hate this motherfucker. I really, I don't know if you've sensed that. Really? Yeah. I have no emotional distance here. I'm changing my prediction. I think this thing goes below 150. Oh, keep it. Keep the original. I can't help it. It's at a P of 180, and its sales are off 75% in Germany. And across Europe, they're off dramatically. I think the car line is really stale.
To be fair, the stock is still up 50% over the last 12 months, right? It had a huge run up. And the market, you could also steel man and be a weak steel man and be more like an iron man or a hay man. It's clear his activities have really hurt him in Europe and in California, but probably the market was looking for an excuse to take this stock down.
I think what will be the real interesting test here in terms of the association or affiliation of an individual's brand and their company is if Starlink starts to have contracts canceled. What do you make of this, Ed?
Yeah, I mean, I think the question that we've been trying to ask is like, what started this slide with Tesla stock? I mean, it's pretty dramatic what happened. It's down around 20% in five straight days, falling below a trillion dollars. It's now down 34% since its peak in December. I think the thing that really triggered this is this data that came out from Europe.
Tesla's vehicle sales are down almost 50% across Europe. Meanwhile, overall EV sales across Europe are up almost 40%. So clearly, people just hate Teslas. And it's not very surprising why. I mean, you just look at the UK, for example, where, you know, Elon is talking about how he wants to put the British Prime Minister Keir Starmer in jail.
It's not very surprising that the British public is now saying, hey, we're down with electric vehicles, but we're not going to buy Teslas anymore. And so it's finally being reflected in Tesla's financials. I think the thing that I've been thinking about a lot when it comes to Elon and when it comes to Tesla, I've been waiting for what I would call his Wellington moment.
And explain what I mean by that. As I've said to you before, I think the similarities between Elon Musk and Napoleon Bonaparte, and you're going to call me a history nerd, but I don't care. Just a nerd.
I think the similarities are very striking in that you have Napoleon, who was this, like, miraculously successful guy who took over all of Europe and tried to take over the world, and at the same time was also pretty universally disliked. But people never really did anything about it because they thought, you know, this guy is so talented. He's so powerful.
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Chapter 3: How is Berkshire Hathaway handling taxes?
The people who get most screwed in our tax system are actually most of the people who work at Prop G Media. And that is you guys make very good livings, but it's all current income and you live in a high tax domain, New York City. So even as young as you are, you make exceptionally good livings for people your age, even though you may not feel that way.
You're probably paying 30 to 40 percent tax rates at this point. That's a lot of money for a young person.
But once you make the jump to light speed and get really rich, you can leverage all these different loopholes, whether it's 1031 exchanges where you can take real estate and roll it into a new investment, a new real estate investment without incurring a capital gain, triggering a capital gain.
Even thinking of yourself as a stock, you produce, I have stocks that produce say 100 grand a year in dividends or growth. That gets to grow, not the dividends, but the growth grows tax deferred, whereas if you're an individual making $100,000, you lose 20% of it every year at least.
So the tax code has basically said, all right, the bottom 99, we're going to basically fund the government with the kind of – 50 to 99th percentile. And then once you get above the 99th, your tax rates plummet. And the reason why America puts up with it is that we're so optimistic that people believe at some point they're going to be in the 0.1%.
But corporations, I mean, we just have two choices here. We either need to cut spending and raise taxes or have massive deficits, which are And it's important that we communicate this to people, nothing but taxes on you and Claire and the rest of the young people of this organization, just kind of laying in wait. So I find the whole – I think taxes are a really important conversation.
I would like to see the best solution would be an AMT, an alternative minimum tax on corporations and the rich. And that is if you make over, say, $10 million, we want you to pay – A 50% AMT. Whatever loopholes you can come up with, great, but you're paying at least 50%. You know, well, that's a lot, Scott.
It's not because every psychiatrist and psychologist and Daniel Kahneman specifically has shown that above a certain amount of money, you lose no happiness. Any more money doesn't make you any happier, so having a higher tax rate doesn't make you any less happy. And also, these tax rates are lower than they were in the 50s, 60s, 70s, and even in the 80s at those income levels.
So I think tax rates could actually come down if you forced everyone to pay those tax rates. And that is you could lower the top tax rates on people if everyone paid them. You could lower corporate tax rates if everyone paid that rate.
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Chapter 4: What is BP's new strategy?
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We're back with Profiteer Markets. Nvidia reported fourth quarter earnings that beat expectations with revenue up 78% from a year earlier. The company also forecasted higher than expected first quarter revenue with the CFO confident in a quote, significant ramp in sales of Blackwell, which is its next generation AI chip.
However, Nvidia also warned that profit margins would be tighter than expected as it accelerates the rollout of the Blackwell chip. After fluctuating between gains and losses, the stock actually fell slightly in extended trading. Scott, just your headline initial reactions to NVIDIA's fourth quarter earnings and perhaps the market's reaction to those earnings.
You had it. You summarized it perfectly, Ed, and that is the market is so used to these companies blowing away expectations that when they don't beat expectations, they don't meet expectations. And NVIDIA beat expectations on the top and bottom line, and I think the stock's off today. I mean, it's not off hugely, but you summarized it perfect.
Expectations have become such that you're expected to massively blow away expectations. But I didn't take a ton away from this. Do you have any thoughts?
I think what the market wants from NVIDIA now is...
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Chapter 5: Why is BP shifting back to fossil fuels?
He said, quote, models like OpenAI, Grok 3, and DeepSeek R1 are reasoning models that apply inference time scaling, and reasoning models can consume 100 times more compute. So he kind of sounded bullish on DeepSeek in a way. He then went on to say, that DeepSeq is, quote, an excellent innovation, but even more importantly, it has open sourced a world-class reasoning model.
Nearly every AI developer is applying R1 or techniques like R1 to scale their model's performance. So if I were to translate what he's saying about DeepSeq, it's that DeepSeq can only be good for NVIDIA. He says, you know, it can consume more computing power, and I'm not totally sure about that, and I don't really believe him,
given what we saw in the research paper where DeepSeek said, no, we consume less compute. But he also said that it's democratizing AI, which will ultimately lead to even more demand for computing power. And on that point, I do agree with him.
I think that, you know, if DeepSeat can make this stuff more accessible, then we're going to see more people accessing it and more people using this stuff, which is only going to lead to more demand for compute, which can only benefit NVIDIA. This is... We've talked about this before. I think this is Jevons' paradox. A lot of tech bros talk about this.
This paradox that the cheaper and more efficient a product gets, the more it is consumed in the real economy. And so Jensen's comments at the start of the call were, this is what's going to happen. It's more accessible. It can only benefit us. I'm sort of with him. I think the 100 times more compute power comment was probably a little bit misleading, but
I look at this and I think, okay, NVIDIA's crushing it. Keep going.
It's great IR. It's great investor relations to turn a bug into a feature, right? A, confronting it head-on. Let's talk about DeepSeek, and this is why DeepSeek is... It's good for us. It's a very well-run company. He's an outstanding CEO. I think Josh Brown said that it's up 100x, and I guess Josh has owned it for 10 years?
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Chapter 6: How does AI affect energy demands?
I couldn't believe when he said that. By the way, we were wondering, how much do you think he put in?
I have no idea, but... I know I met Josh through his partner, Barry Ritholtz, who's also a very smart guy, and they're trying to be sort of a hybrid between a hedge fund and their business model and Vanguard, and that is every time their AUM goes up, they charge less money, but they're very smart. They're not stock pickers.
Well, I guess they're stock pickers to a certain extent, but they're very much – They're sober about it. Yeah. They're one of the few funds I've ever thought investing in and even paying fees because they're just very sober kind of level-headed guys and they give it kind of – give it to you straight. And oh, yeah, those guys are like fun to go out and eat beef and drink bourbon with.
They're such like Long Island guys. Yeah. Like, I don't even like basketball.
Which is the most important thing in the wealth management business.
100%.
100%.
Look, it's an incredible company. I'm pissed off I never owned it. I have a difficult time seeing where it goes from here based on how just expensive it has become.
It was interesting. I mean, I was watching CNBC the night before the earnings, and CNBC had probably every single analyst on their roster come on to talk about this topic and specifically to make a big, bold prediction about it. And it was really interesting seeing all of these analysts getting so fired up.
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