Tesla & Google Earnings ‘Illusion’ Explained by Everything Money

The video from Everything Money centers on the latest earnings from Tesla (TSLA) and Google (GOOG), arguing that both companies reported headline profits that can easily mislead retail investors.

According to the host, Tesla’s and Google’s shares dropped sharply after earnings despite eye‑catching profit figures that were heavily driven by accounting gains rather than core operations. He claims Tesla’s billion‑plus profit and Google’s $112 billion profit were “basically an illusion” once investors strip out gains tied to SpaceX.

Everything Money’s main argument is that investors who only read earnings headlines may think both giants “crushed it,” while the underlying numbers show collapsing margins at Tesla and unprecedented cash burn at Google. The stated goal of the episode is to teach viewers to look under the surface before making any decision about owning TSLA or GOOG.

The host frames Tesla (TSLA) as a car maker whose stock price is really driven by three big future bets, while Google (GOOG) is portrayed as a dominant cash machine trying to reinvent itself around AI.

For Tesla, he says bulls focus on:

• Autonomy and robo‑taxis, with a reported 1.5 million self‑driving subscribers.
• A fast‑growing energy storage segment built around Megapack batteries.
• The speculative Optimus humanoid robot, which he describes as a “lottery ticket” that could dwarf the car market if it works.

For Google, the bull thesis described includes:

• AI features that, according to management, are increasing searches instead of cannibalizing them.
• Google Cloud, which the host says is growing over 80% with a $500 billion backlog, potentially becoming a second “search‑sized” engine.
• Distribution reach through search, Gmail, Android, Chrome, YouTube, and Maps that no startup can match, with nearly 90% of large U.S. companies reportedly using its AI tools.

At the same time, he lays out bear arguments. Tesla’s critics, as he describes them, point to a weak core car business, intensifying EV competition led by BYD, and heavy dependence on Elon Musk. Google’s bears, in his view, focus on AI threatening ad clicks, massive AI capex eroding free cash flow, and antitrust rulings that may chip away at its moat.

Everything Money spends substantial time walking through specific metrics for both companies and contrasting them with their market valuations.

For Tesla (TSLA), the host notes:

• Quarterly operating income reportedly collapsed 57% to $398 million, with margins down to about 1.4%.
• Record revenue of $28 billion (up 26%) and 480,000 deliveries sit alongside falling profitability and a 67% drop in regulatory credit income.
• Last year’s free cash flow is cited at 5.76 billion, versus a five‑year average of 5.23 billion, yet the most recent quarter saw Tesla burn cash.
• Long‑term profit margins have trended down: roughly 7.5% over 10 years, 9.7% over five years, and 3.67% over the last year.

He highlights Tesla’s low debt and more than $40 billion in cash as clear balance‑sheet strengths but contrasts that with valuation, saying TSLA trades at about 190 times free cash flow, 286 times earnings, around 13 times sales, and near a one trillion‑dollar market cap. He compares Tesla’s current margin profile to typical car makers, which he claims usually trade under one times sales.

For Google (GOOG), the host cites:

• Revenue up 24% to nearly $120 billion in the quarter, with search growing 17% and Google Cloud profits more than tripling as revenue rose about 82%.
• A reported $112 billion profit that he says is mostly driven by a roughly $100 billion one‑time gain tied to SpaceX.
• AI capital spending of $45 billion in the quarter, which he says exceeded cash generated by the business and led to Google burning cash for the first time.
• A market cap of about 4.05 trillion and enterprise value of 4.09 trillion, with last year’s net income quoted at $244 billion (including the investment gain).

He emphasizes Google’s long‑term operating metrics, claiming 10‑year, five‑year, and one‑year profit margins in the low‑to‑high 30s (excluding the SpaceX gain), and double‑digit revenue growth rates around the mid‑teens.

On Tesla (TSLA), Everything Money repeatedly questions whether today’s price fairly reflects the risks. He argues that ultra‑thin margins and slowing revenue growth make it look more like a traditional, capital‑intensive car company than a software business, even as it trades at software‑style multiples.

He underscores several Tesla‑specific risks:

• The car division still accounts for over 90% of revenue, so delays in autonomy, energy, or robots could leave investors overpaying for a car maker.
• Competition from BYD and other automakers with broader model lineups could pressure pricing and margins further.
• Heavy reliance on Elon Musk, whose political controversies and multiple commitments are presented as a key bear concern.

On Google (GOOG), he highlights that AI investments may structurally reduce the company’s famed free cash flow. In his view, expensive AI chips that constantly need replacement could weigh on returns for years. He also calls out the antitrust loss as a real overhang, suggesting future remedies could erode search distribution deals and data advantages.

Across both companies, his broader caution is about optimistic assumptions. He notes that analyst estimates for Tesla earnings rising from about $2 per share to nearly $25 and revenue rising from roughly 100 billion to 830 billion rely heavily on success in robo‑taxis and robots. For Google, he points to analyst projections of earnings rising from around $14.50 to $31 per share and revenue growing from 500 billion to 1 trillion, and stresses that growth duration and profitability will ultimately determine whether current multiples are justified.

The host outlines several forward‑looking signals he believes will determine whether the bullish or bearish narratives around Tesla (TSLA) and Google (GOOG) play out.

For Tesla, he says investors should monitor:

• Whether operating margins recover from the roughly 1.4% level and move closer to historical averages.
• Actual commercialization of autonomy (robo‑taxis), energy storage profits, and the Optimus robot, which he believes must meaningfully diversify Tesla’s revenue and margins away from cars.
• Competitive dynamics with players like BYD and whether Tesla expands its lineup beyond the Model 3 and Model Y.

For Google, his watch list includes:

• Whether AI‑driven search continues to increase search volume and ad monetization, as management currently claims.
• The trajectory of Google Cloud growth and the pace at which its roughly $500 billion backlog converts into revenue and profit.
• How AI capex trends evolve after the $45 billion quarter, and whether free cash flow rebounds.
• The impact of antitrust remedies on default search deals and data access.

He also mentions that Warren Buffett has reportedly been buying Google shares while Bill Ackman has exited for a profit, framing this as a sign that smart money can disagree even with the same numbers. The episode closes by pointing viewers to Everything Money’s stock analyzer and a promised follow‑up breakdown on Meta to see how similar AI spending vs. profit dynamics play out at another large platform.