The staggering run into this report lets go straight to phil lebeau with all the details. A beat on the top and bottom line and the beat on the bottom line is significant. Lets run through some of the numbers. Much better than expected earnings per share and its a fourth straight profitable quarter for tesla. 2. 18 is how much it earned in the Second Quarter the street was expecting three cents profit revenue just over 6 billion as i mentioned, a fourth straight profitable quarter for tesla. We know the significance of that it is the last hurdle the company needed to clear in order to be included in the s p 500. Lets drill down some numbers within the report that are going to get attention operating cash flow, 418 million. Automotive revenue was actually down it declined by 3. 4 in the quarter, not a surprise given the fact that you had the freemont factory shut down for five or six weeks. But the automotive regulatory credits revenue, thats where they made it up. That was up 317 million the model y production, overall it is increasing remember, theyre building that out at the freemont plant. China made model 3 production, it is also increasing. That is an area of growth for the company. In terms of the next factory, theyre teasing us well learn more perhaps during the Conference Call coming up in about 25 minutes they say that they have selected a site for that sect factory here in the United States. Theyve begun preparations for that site. But theyre not going to tell us what the location is is it austin, tulsa . Perhaps well get more clues in about a half an hour tesla is reaffirming its 2020 delivery target of delivering at least a half million vehicles this year. There was some question, because they did not specifically reaffirm it during the last Earnings Call. They have done that today. So, guys, overall if you are a tesla bull, theres a lot to like in this report. Phil, thank you phil lebeau. Steve, ill go to you, your take on these numbers we have seen so many times, even if a Company Delivers and beats, its a sell on the news sort of event. Here we are with the shares almost up by 5 . The most important thing is what phil said the fourth consecutive quarter of profitability thats what everyone was focused in on. The door is open and remains open for the s p add i think thats what people are looking at when you look at the stock, its overbought, but it runs overbought quite often and it works off an overbought, which means a relative strength index, reading of higher than 70. Its at 72 currently that is nothing for tesla to be working off right now. So i would say deliveries, i wouldnt worry about them. I wouldnt worry about anything until you get to that level where theyre either include in the s p index, i think i think that you have to be a buyer of this stock. Youre going to see them try to raise some cash here, raise some capital here this price is unbelievable its already run over every short thats out there shortages went from 30 down to nothing. So i would think that the s p is going to be your ability to say let me short the news at that point. But until then, the stock is higher. Part of this is technical, right, in terms of this move, tim . Knowing that there could be inclusion around the corner, theres probably some buying 4. 5 trillion in assets are indexed to the s p 500 either directly or indirectly theres advance buying of the stock and then you have the Short Interest fiveyear lows, a Short Interest in the stock, which is about 10 right now. So that is down quite a bit over the past few months. Yeah, and i dont think its zero, but i think steves point is that its gone from being one of the things you talked about with the stock, maybe its something you talk about now because the Short Interest was part of the reason youve had the move the two things that i think are the most important numbers or the things you focus on, first of all, an additional 500 million in cash and now 8. 6 billion in cash on the Balance Sheet. At one point this was a big issue. And its not an issue. Will they go out and raise i think it would make sense. I think they should be raising as much as they can. The other thing i would focus on are lower asp prices theyre not getting as much for their cars they had Lower Services revenue. Two quarters in a row and back to the red credits where theyre really profitable. If you look at the numbers, look, a company can do whatever they want and report within the context of u. S. Gap and, yes, its important that they got four straight quarters of profitability for this how overemphasized s p story so the Company Seems to take the good news i mean the market, the market certainly from the bulls case, deliveries over 500,000 reaffirmed and yet its really never supposed to be about the shortterm for this company because theres no way it could be if you look at the valuation. So weve had upgrades over the last month, theyve included for every reason as related to their technology, their miles driven, their software and the Gross Margins in it. But most importantly, what a move after the market, after this move in the stock its hard to argue with that. Regulatory credits must be clear, theyre up 286 year on year to 428 million of 5. 2 billion in revenue. So even though it did jump, thats not the reason why the stock is, you know, not up more. Lets get more on teslas quarter. Less bring in gene munster welcome back i want to get your back on this quarter. Everyone was focused on the s p 500. I dont think thats the real story. The reason they got there is actually sustainable the tax credits are coming from other Automotive Companies that simply dont have an ability to make evs fast enough, so i think thats the real takeaway here, is this is not just about getting the s p 500. This is about a company that is laying the framework for predictability around profitability. Hard to imagine were talking about the tesla story, but i think thats what is driving the stock higher in after hours. Karen, you got a question i do. Gene, what about the free cash flow, which obviously was a big surprise to the upside but im wondering how much of that is working capital adjustments that could end up turning around once production is back up and they are paying full payroll how do you think about that number i think its going to be sustainable. I think theyre getting some efficiency out of shanghai thats ultimately driving that so just taking a step back, the free cash flow, a second big part of the story, very impressive i think it is sustainable. In terms of the lower average selling price of the vehicles, gene, is that mainly because the model 3 or is it also because of the price cuts that weve seen in some of the models either in china or here in the United States model 3 and model y, too. I think model y was up to 15,000 units, so it was 5,000 last quarter. Do you think that weve seen the last of the price cuts no. What theyre doing is really driving efficiencies and driving lower price to ultimately drive market share and i think thats going to be the piece thats going to surprise investors over the next several quarters. And gene, just quickly on the Conference Call, if you could, what question would you have for elon musk . Its really all about whats beyond cars. I think the Energy Aspect is an underappreciated part of the story so i think well hear a lot more about that on the call. Well check in with you a little bit later on. Dan nathan, how do you think about tesla at this point . We do see followthrough after the report in this run yeah, well, i think you guys have just said it, it just confirms the fact that a 300 billion Market Cap Company thats not in the s p 500, but when people talk about how many trillions are indexed to the s p 500, this is not going to be a massive buy. Maybe its 10, 20, 30 billion. Theres people that are going to come out clearly with the calculation. So at this point some of those Fund Institutions have probably been buying the stock ahead of time, which has helped this story a little bit listen, this has been a very volatile company on the earnings front. They obviously were gearing towards the s p add, but also there were some other milestones where some executives got really paid so im not telling you this company is not doing a good job executing. It sounds like they did a good job executing in what should to be a lights out quarter as far as demand, but it didnt happen that way steve said youve got to buy it. Hes talking like a trader hes selling i wouldnt sell it. At the end of the day, its a very expensive story everyone was poohpoohing the auto thing the forward story is going to be about software at the end of the day there will be sizable competition in the next year or two in the high end where these guys play, and i would even add the model 3 as the high end at that price point without those credits, when theyre going down, its probably a 40,000 car thats not exactly a lowend car. Again, stock is up 5. 75 . The Conference Call will be under way in 20 minutes and well circle back to tesla lets turn to other afterhours moving, microsoft dropping despite a beat on the top and bottom line. Josh so the bottom line, solid results against elevated expectations microsoft was up about 30 year to date. Commercial cloud Revenue Growth of 32 he says speaks to strength in the crowd. Azure growth of 50 , could have been expecting better, kirk says, which could explain some of the weakness. His question on the call, how are linkedin and office franchises set up for q1 if you look at the print itself, theyre saying cloud usage and demand increasing as more of us are working and learning from home but transactional licensing purchasing continued to slow, in other words, as small and medium size businesses come under pressure, microsoft seeing some slowing in Onetime Software purchases. Linkedin revenue increased 10 but they say it was negatively impacted by a weak job market. Same goes for search advertising, revenue, traffic acquisition costs decreased 18 . They said the search was negatively impacted by reductions in advertising spend. On the other hand, windows oem revenue, so licenses to device makers up 7 in the quarter. This call starts at 5 30 eastern, at which point you would expect cfo amy hood to give guidance. Josh lipton, thank you. This is a stock that had nice earnings, but it did have a couple of misses on key line items that investors were watching, and that would be azure. Also, the business process segment shy of consensus revenues, operating margin was also below consensus so karen, where do we go with this stock down here 2 after hours . Well, give than its had an enormous run and that they didnt sort of knock the lights out in every single category, i think its actually hanging in there pretty well. I thought it was a really good quarter. It had to be a really good quarter. So down this much is really i dont think a big deal ill be interested to see how analysts look at it tomorrow, whether theyve changed their outlook at all the stock got expensive 30 some odd times. Im long, im sort of thinking, all right, im going to hang onto it. If its going to trade down a little bit, i probably wont buy more it would have to trade down significant le for me to think i want to have a bigger position at this price. Im still optimistic on cloud and i come back to it again and again, i dont have a better place to put the money. Dan i think you nailed it with the azure. Q4 last year they had 64 year over year growth so 50 Constant Currency sounds like a pretty reasonable deceleration and i think it decelerated from if q3 last quarter that was in the high 50 . So expectations just got really high i saw a lot of notes from a lot of people on the street today talking about how the whisper number for azure got up to mid 50s percent gains and thats telling you that people are getting a little nervous relative to consensus. Im with karen if youre a bull and you want to look past what is going to be a really rocky second half of this year as it relates to enterprise spending, then youre saying to yourself i want to see some of these stories come down. Its trading 30 times next years earnings. That is an alltime high for microsoft, at least going back 20 years so the opportunity to buy some of these stops on the pullback would be very nice for a lot of people who really buy into this story that a lot of this kind of acceleration of some of these trends that were precovid are going to exist afterwards. But microsoft, not going to go from 200 to 300 in a Straight Line youre going to have to have an opportunity to buy it at some place. I think 190ish would be an ideal place to reload. This stock traded as if it were covidproof we see profitability coming in short and you think what is the exposure of microsoft to small and Medium Size Enterprises as we go into a potentially tough period for the economy if you think the economy is all right, i guess you think microsoft is all right but if you think the economy is going to hit a speed bump, you might think microsoft could feel some impact from that. I look at it actually the opposite way if you think the economy is okay, i think people are going to start to rotate into value. So for me, ive had a pretty good run in this one i actually sold all of my microsoft at the end of last week i sold all of my apple as well, because tech versus value. So, for me, youre right, it is the azure, it is gaming, it is intelligent cloud, regular cloud. But this was priced for perfection i hate that saying, but it was i took my chips and i put them elsewhere for now. Do you own any big cap tech at this point, steve no, im out of all big cap tech i put my bets basically in a lot of these high beta switches, virgin galactic, sonos and a lot of value plays right now im out of tech completely. Lets get to the other big market driver, the race for a coronavirus vaccine. A 2 billion deal from the Trump Administration sending two stocks soaring today meg joins us with the details. The deal is with pfizer and biontech, the german biotech partner to secure 100 million doses of the covid19 vaccine if its successful. It has to get through the phase three trials and get fda approval in order for the contract to be struck. But 1. 95 billion would secure the doses. Theres also an option to acquire an extra 500 million doses and they say that this vaccine will be given for free to all americans now, the Companies Say that they plan to start phase three trials this month if all goes well, they could be applying for Regulatory Approval in october and then be supplying 100 million doses globally by the end of the year. Interestingly, this kind of gives us our first real price point in terms of what these vaccines may actually be priced at and trying to make some calculations about their profitability for these companies. They put a note out today saying the 1. 95 deal for 100 million doses, thats going to be 19. 95 a dose people will get two doses. He estimates the cost of goods sold for this will be in the low single digit dollar range, which he estimates will yield a profit margin of about 60 to 80ers i reached out to pfizer, they did not dmecomment on these specific projections but they did note there are investing more than 1 billion in the development of this and they told me they are not getting any money from the government unless it gets through the process and has proven a high level of efficacy. Pfizer is up 5 , tim. There you have it. The question weve all been asking, is pfizer or any of these Big Pharma Companies or buy oh techs going to make anything on any of these vaccines it looks like maybe pfizer could. It looks like they could, but they dont have a vaccine. And so if you think about r d and think about where they are and listen to the cdc or whoever you want to listen to on this, where they may or may not be on a vaccine, yes, i think this is potentially a driver but what weve seen so far is these announcements have changed being spikes and catalysts for the stock to ultimately being more market related dynamics i own pfizer outright. I think you own pfizer based upon it trading relatively trade, about 15 to its fiveyear average, a fantastic Balance Sheet and theyre in the hunt i think the headline today is important to send the message that some of the best and the biggest Drug Companies in the world are hard at work and close to at least having a deal in place with the government. But again, we dont know that its going to be 20 and we dont know that the gross margin on the underlying is going to be what it is its not a reason to go out and buy pfizer today. So basically you like the stock and the vaccine as an option yes, absolutely and i think the Market Dynamics of all of this are that much more important i wouldnt be playing weve talked about whether you want to own biontech mega cap pharma, but whether you would want to own both of those. Retail wreckage, why one retailer says it is time to ring the register and were not done with earnings this hour. Stick around for all the afterhours action much more fast money in two. Flexshares may look like other etfs. But inside. Theres advanced research, modeling and refinement. Constructing funds that dont simply follow an index. But explore new terrain. Helping you fill portfolio gaps. Connect to client goals. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Save without evenus contaleaving your house. Ion. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Getting hit card, both stocks have been downgraded to sale ratings. The analysts say they can no longer rely on malls and Department Stores to ensure growth theyre saying nike, levis, sketchers are focusing less on thirdparty retailers and more on direct to consumers karen, i thought for macys ubs went down to a 30 price target. What i thought was interesting is they talk about the real estate, which had been a source of strength for macys Balance Sheet but they say it will probably get levered up and macys will have loaded debt on its hands. Right they have done that. Theyve been doing that for a few years now, trying to monetize the real estate and they were sort of slow to make progress a couple of years ago and i dont know right now what the value of that real estate is relative to where it was a few years ago. The piece talks about an acceleration of the decline of Department Stores that had started precovid and this just sort of sped it up and so ive been concerned about macys for a really long time. I often talk about look at the debt and the debt investors have a much better sense of the health of the company than equity often so if we look, i think we have 2 7 8 maturing in 2023 thats not that long from now. And the yield is high, telling you theres a concern about whether or not this will be paid in full at maturity, not that far from now so i dont know if 3 is the right number i cant really argue about it. But i think hes absolutely right to be skeptical and concerned about actually, skeptical and concerned about macys and kohls. The kohls price target goes down to 14 a share so these are dramatic cuts. Part of the call also is that these Department Stores are using resources on their Balance Sheets to deal with covid, and they really needed those resources to restructure their own businesses weve all talked about the fact that covid just exacerbated whatever the situation was before going into this environment. So we all knew that macys was weak, we all knew that kohls was weak, but i dont know what the risk reward is to make this call now seems a little bit late. And with an over 50 Short Interest, one headline thats positive, and macys will rip higher, based nothing on fundamentals this could just be anything to do without macys falling off the face of the earth into an abyss and this stock can move aggressively higher. So i dont know how great this call is. Dan, i think once upon a time you made a call that amazon could buy kohls could this be close to the moment with kohls being sort of distressed yeah, i dont know if thats the sort of brand they want. You think about the barbell approach theyre going to take they obviously bought whole foods as it relates to groceries, so maybe something on the apparel front. Maybe macys would be a better one. It gives them storage and logistics facilities i would expect amazon to make another purchase i dont think there would be big regulatory hurdles when you think about it, especially if theyre going to save a lot of employees and save a company like macys. I would also add one other name in retail that might have a tough time until there is a vaccine, and that might be tj maxx. This is a Great Company and i think its one of your favorite stores, mel. Yeah. This is a company that is going to have a hard time going directtoconsumer when you think about what their merchandise is it is one of those ones that i think should pop and catch up and get back to those prior highs if there is more visibility on vaccines. Coming up, jmf shares soar in its trading debut. What is heck is it first, does this rally have more room to run. Bank of americas top strategist joins us next to break it down now is the time to support the places you love. Spend 10 dollars or more at a participating Small Business and get 5 dollars back, up to 10 times with american express. Enroll now at shopsmall. Com. And im an area manager here at amazon. When you walk into an amazon fulfillment center, its like walking into the Chocolate Factory and you won a golden ticket. Its an amazing feeling. My threeyearold, when we get a box delivered, he gets excited. He screams, mommys work when the pandemic started, we started shipping out all the safety stuff that would keep the associates safe to all the other amazons. All of these are face masks, weve sent well over 10 million gloves. And this may look like a bottle of vodka. When we first got these, we were like whoa [laughing] with this pandemic, safety is even more important because theyre going home to babies, theyre going home to grandparents. So, our responsibility is to make sure that they go home safe every single day. So, our responsibility apps except work. Rywhere. Why is that . Is it because people love filling out forms . Maybe they like checking with their supervisor to see how much Vacation Time they have. Or sending corporate their expense reports. Ill let you in on a little secret. They dont. By empowering employees to manage their own tasks, paycom frees you to focus on the business of business. To learn more, visit paycom. Com over the next period of time and we have today a short position in a highyield index. We are bearish on highly levered companies to some extent i view that as a hedge on whether theyre going to make money or not but the highlylevered businesses will struggle because its going to take time for the economy to open. That was bill ackman on squawk box today the stock managed to head higher today. He said that longterm he is bullish america, he is long in the markets, hes long on a lot of the reopening trades that he bought close to the march lows, names like hilton, lowes the Home Improvement retail, as well as chipotle. He remains in some of these trades and i thought the hedge using a short on high yield was sort of interesting as well. Yeah, its been interesting high yield, because the governments professed defense of fallen angels and some high yield and buying the etfs that occupy the space has been interesting. Bills in broad brush strokes have been tactical in this and it seems like hes been on the right side of the trade, buying near the bottom wherever he remains in some of those positions. I think the key is ultimately we are in a credit crisis, whether the government is there to defend ever Balance Sheet or not, so being cautious and having that as a hedge i think is fair. Talking about a couple of those trades, lowes and chipotle for Different Reasons have been big winners because they either were in the right space, whether its Home Improvement and nesting and lowes spent three years to turn their business around and raise their gross margin and invest in their digital world. Whereas chipotle was investing in digital and we just learned today in their earnings thats 60 of their sales last quarter. What do you pay for those companies now is really the question theyre trading rich relative to themselves but i dont see the market getting away from that. Karen well, i, too, am short some high yield i think i am long bank so clearly any credit issues, any credit crisis, this would be a hedge for that i think were going to see more pain i agree with tim weve seen sort of a government put for a while and i dont think it lasts forever and i think theres going to be bankruptcies, even some of, you know, the airline debt isnt trading great at all so i think were going to see more pressure on high yield. Our next guest things the rally might hit a pause. Lets bring in savita subramanian. Great to have you with us. Whats going to cause the paus is it that were stretched on valuation or fiscal stimulus not coming in as strong as the market wants yeah, i mean, i think its a combination. But heres i think the big risk, is the idea that fiscal stimulus has been aggressive, fed stimulus has been aggressive, reopening is starting to happen, but it is fraught with risks of a second wave. And now, in order to really get through this, we need to see either continued momentum in that recovery story, or if there is a stall we just need more stimulus to keep this story going. So i worry that, you know, if you think about it, weve seen as much stimulus over the last few months as weve seen throughout the entire last ten years, and we still havent cleared the prior market high. So i think that those are the things we need no think about, is whats kept this bull market going . It hasnt really been cyclicles recovering on optimism around reopening, its really been more about stimulus and liquidity looking for a home and finding it in bank stocks. So the number one thing that worries me about the s p 500 today, and this has really been a boon, is that almost half of it is technology if you look at the tech sector, communication services, plus online and internet retail, thats almost 50 of the market is tech. So we really need more stimulus to keep this going i think at the end of the day thats probably a longerterm positive, because tech is the future but one of the things i worry about is that if we do see a rotation towards some of the more beaten down cyclical areas of the market, what happens to tech is that used as a source of funds for getting other areas of the market so its a little bit of an environment where good news could actually be bad news for the s p 500, which is much more exposed to some of those secular growth and technology themes. In terms of technology sorry to interrupt, are these valuations stretched because i see on your screen it comes up as number two, and so im wondering how that meshes with this notion that perhaps were at a point where some valuations are high. Yeah, so valuation on tech right now, if you look at if you just looked at a simple kind of growth versus value breakdown of the market, growth is actually trading, and growth is basically tech and internet retail and some of the work from home beneficiaries these stocks are trading at higher multiples than we saw during the tech bubble so were at levels of optimism on Growth Stocks that we havent seen ever. And i think the question now is how do you value these stocks in a zero Interest Rate free money environment, and the talk that i hear around we need a new valuation measure for tech Companies Really reminds me of another period in time late 99, early 2000 where we were trying to value these companies are price to eyeballs and then we all know what happened after that so i think there are risks to technology stocks. The things that keep it going are they still have good Balance Sheets, they still have better growth than most other parts of the market but i think to one of the other commentators points, if we see anything even kind of remotely positive around a reopening and a cessation of the second wave risk, that could really bolster a lot of these dollar stocks in the market that are trading near bankruptcy levels, like the traditional retailers, et cetera so thats what worries bea little bit about the s p 500 in particular. Tim, do you have a question savita, thanks for joining us you talked a little bit about where the equity risk premium, no matter what, it makes it a very interesting time. So were probably in excess of a dividend yield in the s p, even after cuts in more than three times the tenure how much do you think that is supporting equity allocation right now . I think that is the number one reason that theres a big on the market, its got income, everybody wants income, income on the s p is a whopping multiple, close to a record high multiple of what youre getting in other fixed income assets so as long as that continues, you know, maybe you continue to see inflows into stocks from bonds and other areas. But again, think about it, weve had a period where individual investors, hedge funds, Institutional Investors have moved capital into the market, were close to alltime highs. Yeah, the yield aspect is still a strong story, so i guess my advice to investors is look for companies that offer safe, sustainable yield that still provides a much higher level than what youre getting from traditional fixed income but beyond that, i dont know if the market itself has a lot of room to move a lot higher from here the other thing i worry about is were at a point where the next three months historically have seen very significant pickups in volatility were three months away from a president ial election. If you look at the vix in the three months heading into the president ial election, usually you see a 30 increase in the vix, which is negatively correlated with the market were moving into this period where youve typically seen a demonstrable pickup in volatility not a lot of cheerful things to say right now about the market sorry. Yeah, thanks savita its always good to see you. Savita subramanian steve, im glad that savita mentioned the sort of seasonality and i really dont like that as a notion in general because i feel like people know what the seasonality is. But muscle memory is that in the fall bad things happen in the markets and we have seen that time and time again. So we have that sort of, you know, underlying reaction to october, lets say, and then you have the president ial elections in november. Yeah, i think everyone is setting up for an extremely volatile youve got to remember the economy is going to be starting up you haveschools that may or ma not start. The biggest thing that the market has to worry about is large cap tech and tech. Its 50 of the market if that rolls over, the market rolls. Coming up, its just jamf, youre not pronouncing each individual letter. It sounds like youre grunting its a lot of fun to say what is it, though why are traders buying up this name later, looking for good intel, stick around because we will dive into the options into what is ahead for this chip stock erl before your own. And in an emergency, you need a network that puts you first. That connects you to technology to each other and to other agencies. Built with and for first responders. Firstnet. The only officially authorized Wireless Network for first responders. Because putting you first is our job. Shares of jamf soaring 50 . The Company MakesEnterprise Software for apple devices its one of those rare tech unicorns thats actually profitable karen, what are your thoughts about this well, i just learned about this company today and i actually watched their video to see what they did. I see why people like it, one that makes money thats something unusual right there. But also the subscription model is great i was sort of wondering why wouldnt apple just buy them or maybe did they consider it i dont know but congratulations to them. Im not buying it here. It lives in this sort of like positive crosssection of things related to apple and software in this market, dan well, its more importantly re recurring and then obviously the profitability. Any private company right now in tech, and you have those kind of attributes, you should be looking at going public. You can do it on the nasdaq. You should go public there seems to be tremendous demand for any sort of stock you just tell any sort of story and your stock will go up. Have at it. Coming up, earnings season in full swing well take a look at more afterhours movers, well look at chipotle and las vegas sands. We just got a headline from the Earnings Call that the company has announced the location of its new factory. That would be austin, texas. Well get more details straight ahead. Stay tuned for my mother my father my grandmother my brothers and sisters my friends for going back to school the bbq the lake the beach my place for my neighbors my community my people my country my home for him for her for them for you. Welcome back to fast money. Weve got an earnings alert on two more movers, chipotle and las vegas sands. Coo Rob Goldstein saying on the Earnings Call we are in a world of hurt here these are two reopening trades, of course both lower chipotle, tim, you had mentioned really doing well on the digital side of things and this has had a tremendous run yeah. Digital sales were up 216 year over year for the quarter. Theyre now more than 60 of sales. The average ticket size is higher the gross margin is moving higher so is the valuation. So as one of those stocks, unfortunately theres a new of these on the sthow where i talk about not having been in the stock for the move and being bearish on the multiple. At some point i just wonder unless theres a greater share of the monthly pocketbook thats going to fast casual, i think this should be something that you should be fading this move its priced to perfection. In your swap of big tech for value reopening, are casinos in that basket . Yeah, they have to be in that basket and i go with the one thats been the outperformer in a very down market has been las vegas, the one you just mentioned and you know the way i stand on this you get the us and you also get sing singapore in that. For right or wrong reasons, you get another levered pull they are definitely names that will rally aggressively once we get even halfway to the goal where we have to go. So i think they have to be in the bucket. Be sure to catch kate rogers exclusive interview with brian niccol tesla announced austin as the location for its new factory. Gene, what is new . Well, austin is new, melissa. This was largely expected, but it laid the groundwork for the company to ramp production recall that they reiterated the 500,000 vehicle target for 2020. They need to grow to 15 million vehicles over the next ten years, at least thats elon musks target. So austin is new and they also expect to have three more factories in the next five years which would bring them to six total factories. When i think about this 300 billion market cap and think how can this be a much bigger company, one is for them to scale into that and there is some news around that in austin. The second, i think, really critical piece here thats going to be largely ignored here is elon musks first comment was about austin, his second was about their solar business this is 5 of their overall revenue. But the fact he is mentioning that, i believe hes starting to educate the market about tesla being much more than a car company. I pride myself on being levelheaded and evenkeeled and i dont want you to think that i have totally drank the koolaid here, but i think this company can take its existing technology around batteries, motors and what theyre doing in selfdriving and apply it more to the emergency market and create much more than a 300 million market cap undoubtedly it will be a wild ride with the stock, but this is i think the start of what will be a multiyear phase where tesla educates the market about being more than a car company. Quickly, gene, your grade on the quarter is a minus you didnt drink the cool aid, you would have given it an a. A minus is pretty good, though gene, thanks gene munster of loop ventures. Dan, i think thats interesting. The second comment on the call is solar elon musk was widely criticized for buying solar city from his relative now maybe the market sees the wisdom that could be behind that well, the market is starting to get really comfortable, what may be a blue wave looks like in the fall and what it means for infrastructure spending, specifically for Green Technologies so that might be something thats helping the valuation here ill just say that theres a lot of people that have been very offsides on this i think theres only eight buy ratings on tesla as far as wall street analysts are concerned, versus maybe 30 hold or sells. Weve never seen anything like this i dont think youll see a bunch of analysts come in tomorrow and upgrade the stock. Coming up, intel getting ready to report earnings well tell you what options traders expect plus were gearing up for a big night on mad money. Jim cramer sitting down with House Speaker nancy pelosi catch that interview tonight at 6 00 peaer. M. 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Melissa we saw calls outpacing puts by about 21 and right now the market is implying a move of about 5 higher or lower by the end of the week. Thats slightly lower than the 5. 5 the stock has averaged over the last eight quarters. The most active opening activity we saw in the options that expire this friday werethe 61 strike calls those were trading for about 1 1. 5 so options traders could be taking advantage of the lower than average to risk 2. 5 of the stock price that it could break out of the languishing weve seen over the course of the last six weeks or so. Be sure to tune into the full show friday 5 30 p. M. Eastern time tensions rising between china and the u. S. , well get you the latest from ijanbeing d what it could mean for your money. Stick around stick around much more ahead. Aded the td amee mobile app so you can quickly check the markets . Yeah, actually im taking one last look at my dashboard before we board. Excellent. And you have thinkorswim mobile so i can finish analyzing the risk on this position. You two are all set. Have a great flight. Thanks. Well see ya. Ah, theyre getting so smart. Choose the app that fits your investing style. Now is the time to support the places you love. Spend 10 dollars or more at a participating Small Business and get 5 dollars back, up to 10 times with american express. Enroll now at shopsmall. Com. Our Retirement Plan with voya gives us confidence. Yeah, they help us with achievable steps along the way. So we can spend a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Oooh, well. Im good at my condo. Oh. I love her condo. Nana throws the best parties. Well planned, well invested, well protected. Voya. Be confident to and through retirement. Announcer final trade is sponsored by interactive brokers. Minimize your cost and maximize your return. Welcome back to fast money. A huge lineup of interviews tomorrow well be talking to parker, and clayton and palihapitiya and segal all starting at 6 00 a. M. Eastern time we are a few hours away from the market open and the latest tensions between the u. S. And china. Lets talk about the very latest good morning, eunice good morning. Hong kong investors were rattled by the u. S. China tensions, but here in the mainland investors will get their first chance to react to the tensions this morning. Shanghai was closed when china confirmed that the u. S. Had ordered it to close its consulate in houston by friday investors are likely going to be waiting to see whether or not china is going to retaliate, perhaps close one of the u. S. Consulates and whether or not the u. S. Would also decide to reverse the decision for what china has called a political provocation the state Department Said the closer protects american ip. Secretary of state mike pompeo is going to be delivering a speech on thursday on china and investors are closely watching that despite the u. S. China tensions, investors are generally feeling more upbeat about the prospects for the chinese markets. The shanghai index was revamped for the first time in 30 years, adding 25 tech names from the nasdaq style star board, dropping a bunch of riskier ones there are a lot of people who say that more needs to be done, but the general direction is one, melissa, that people like because for the most part it means that the stock markets here are opening up more and so its an attempt to make this more lucrative for local investors and for chinese firms to be able to find a new place to list. Eunice, thank you good to see you. Tim, eunice brings up a good point. Even though chinau. S. Relations have been deteriorating, we have seen the chinese stock market go higher, perhaps at least in part to the Chinese Government. Yeah, the Chinese Government is doing the same thing were doing here with a lower dollar with Interest Rates at zero. This is a great environment for china and certainly also it takes a lot of pressure off of chinese property markets so i think the fact they are restructural the index, remember historically some of the indices were bank heavy, a lot of big Life Insurance companies so this is excellent for just the performance of the market. I think emerging markets continue to rally as long as rates stay low and the dollar goes lower. Time for the final trade. Dan nathan yeah, qqq, were going to have apple and amazon next week. I think its going to be a high for some period of time right now. On the back of chipotle, im thinking about starbucks, so they report next week. And also were getting a look on as they open around the world how thats going, which chipotle doesnt have so starbucks. Steve grasso. Spirit airlines, one ive been in for a while. This is one thats definitely tied to obviously the economy and value, doing better in economies reopening. Its giving you a lot of trading opportunities. Its trading right back down to the 50day moving average, which is right about 16. 20. I would be a buyer here and look for a pop moving towards 20 tim. Im liking home depot ove my mission is simple to make you money. Im here to level the Playing Field for all investors. There is always a bull market somewhere and i promise to help you find it. Mad money starts now hey, im cramer. Welcome to mad money. Welcome to cramerica other people want to make friends, im just trying to make you money. My job is not just to entertain but educate and teach you socall me at 1800743cnbc or tweet me ji