A union takes on Tesla over its stock price

As Elon Musk’s norm-shattering influence in Washington has grown — consider his unprecedented cameo at President Trump’s first cabinet meeting on Wednesday — he has drawn intense scrutiny and opposition.

The latest pushback comes from the American Federation of Teachers, one of the nation’s biggest labor unions, with an unexpected line of attack: applying pressure on some of the largest investors in Tesla, DealBook is first to report.

The A.F.T.’s leader, Randi Weingarten, is writing to the C.E.O.s of six asset managers: Larry Fink of BlackRock, Abigail Johnson of Fidelity, Ronald O’Hanley of State Street, Thasunda Duckett of TIAA, Robert Sharps of T. Rowe Price and Salim Ramji of Vanguard. (Musk and the Tesla board were copied.)

She is calling on them to review Tesla’s current valuation. “This is about safeguarding workers’ retirements,” she said in a statement. “Just this week we saw Tesla stock continue to sink faster than a Cybertruck in quicksand as European sales fell off a cliff. So, we knew we needed to act.”

Some caveats: Weingarten is among the most outspoken labor leaders, regularly advocating for Democratic causes. Unions more broadly have clashed with Musk, whose companies eschew organized labor. (The feeling is mutual.)

And the union chief stayed quiet about Tesla’s stock performance when it was rocketing up.

Weingarten argues that Tesla is overvalued, potentially weighing on the investment portfolios of its 1.8 million members. The union chief writes that she’s acting on behalf of an estimated $4 trillion in retirement assets — both through pension funds and other collective vehicles and members’ individual accounts.

Weingarten noted that Tesla’s shares have fallen to $290, down 28 percent over the past month. It pointed to what it said were a number of signs that the company was facing even more headwinds, including:

• Falling quarterly earnings and profit margins, which the union said implied that Tesla was losing its pricing power

• Tumbling sales in California, a major market, and in Europe

• Greater competition in electric vehicle charging, a business Tesla has long dominated.

Biggest of all is the damage that Musk has done to Tesla’s brand, Weingarten argues. Customers considering buying an E.V. now view the entrepreneur negatively, citing data from the American EV Jobs Alliance, a bipartisan group.

The stakes are big. “If it were to decline to the price target of $135 that some analysts have projected, the resulting loss would be 1.2 percent of asset owners’ total S&P 500 indexed portfolio,” she writes.

Some Tesla investors have grown worried about whether Musk’s political work is distracting from Tesla and alienating potential buyers at home and abroad. Others are wondering how Musk may react to the effect on his own finances from Tesla’s falling valuation.

HERE’S WHAT’S HAPPENING

Tariff worries hit European stocks and the euro. President Trump said on Wednesday that he would impose a 25 percent levy on European automobiles and other goods, pushing shares in Mercedes-Benz and Volkswagen lower on Thursday. Separately, the Agriculture Department said it plans to increase egg imports amid a shortage worsened by bird flu. (The last time the United States faced such an outbreak, 2015, it turned to Dutch eggs.)

Washington pushes back harder against D.E.I. Trump called on Apple to ditch its diversity, equity and inclusion policy a day after the tech giant’s shareholders rejected a proposal by a conservative group to do just that. And Harmeet Dhillon, Trump’s pick to run the Justice Department’s civil rights division, told senators that Target’s efforts to hire more Black workers may be illegal. The latest moves come as corporate America has already scaled back diversity initiatives.

Eli Lilly pledges to invest and hire in the United States. The drug maker said it would create thousands of jobs and spend $27 billion to build four new plants, including one for injectable medicines such as its successful diabetes drug Mounjaro. It’s the latest corporate giant to make such a major investment promise since President Trump’s inauguration.

Good, not great

Tough crowd. Shares in Nvidia were a tick higher on Thursday in premarket trading after the chipmaker and artificial intelligence darling beat, but didn’t blow away, Wall Street’s sky-high estimates.

Chip stocks in Europe and Asia also wobbled as investors fret that the A.I. boom is losing steam. Adding to those concerns: Nvidia said the Washington-Beijing trade war was a factor in a big drop in China revenue, with Colette Kress, Nvidia’s C.F.O., warning that President Trump’s tariffs had added a big “unknown” to its business outlook.

And just in: Microsoft is set to urge the White House to roll back A.I. chip export controls on countries such as India, Israel and Switzerland, The Wall Street Journal reports.

Analysts don’t see an end to the A.I. spending boom. Nvidia has been one of the biggest benefactors of the billions that companies — especially tech giants — are spending on data centers and high-end chips. “A.I. is advancing at light speed,” Jensen Huang, the chipmaker’s C.E.O., told analysts.

Even the rise of DeepSeek, the low-cost Chinese A.I. start-up, hasn’t slowed that fervor, Huang said, addressing a chief concern of investors.

If anything, Nvidia is suffering from the law of large numbers, The Times’s Tripp Mickle points out, meaning the company’s astounding growth makes it more difficult to surpass Wall Street estimates with each passing quarter.

To wit, Nvidia’s fourth-quarter revenues came in at $39.3 billion, or roughly $1 billion above consensus estimates — the smallest beat in two years, analysts note. “Slightly underwhelming,” was how Logan Purk, an Edward Jones analyst, described it.

Drilling down:

• Profit rose 80 percent from the fourth quarter of 2023 to $22.09 billion.

• Nvidia forecast about $43 billion in sales for its current quarter. That’s ahead of analysts’ average estimate of $42.3 billion, but far off the upper range of $48 billion.

• Its newest high-end chip, Blackwell, was a big revenue driver last quarter, contributing about $11 billion to sales. But Nvidia warned that gross profit margins could suffer as it ramps up production of the processor.

Will Bezos to go after WSJ subscribers?

Jeff Bezos made a fairly startling move on Wednesday.

In a note to The Washington Post’s staff, he announced the editorial page would “be writing every day in support and defense of two pillars: personal liberties and free markets,” DealBook’s Edmund Lee writes. That’s a stark departure from the paper’s tradition of publishing a wide variety of opinions.

Let’s break that down. First, those “pillars,” which go all the way back to Adam Smith, describe the same philosophy that has guided The Wall Street Journal’s editorial page, “Free People, Free Markets,” for over a century. The Journal’s editorial page cheered Bezos’ move, adding “it will be good to have a wingman in the fight.”

(David Shipley, The Post’s editorial page editor, resigned after failing to talk Bezos out of the change, The Times reports.)

Bezos is working on changing the paper’s business strategy, and the editorial page shift could be seen as an appeal to Journal readers. The Journal editorial even took a jab at Bezos in its kicker: “Sample the competition but come back for the real thing.”

There’s a limited market for news subscribers, who tend to be left-leaning. Look at total newspaper circulation, which stands at about 20 million (print and digital combined) in the U.S., down sharply from a peak of over 60 million in the 1990s, according to Pew. The Times has more than 11 million global subscribers. The Journal has more than 4 million subscriptions. The Post has 2.5 million. Most people tend to just pay for one news subscription.

In other words, there’s very little headroom. Digital distribution has turned the news business into a winner-take-all proposition: Every subscriber The Times or The Journal gains tends to be one The Post likely loses.

The Post is bleeding. When Bezos bought the paper for $250 million in 2013, its sales had been declining for years. It laid off 4 percent of its staff last month and lost as much as $77 million in 2023.

After Bezos killed a planned endorsement of Vice President Kamala Harris, more than 300,000 subscribers canceled in protest. A wave of newsroom defections followed. Some have gone to The Times. Others to The Journal.

Which brings us back to our headline. Bezos isn’t just aping The Journal’s editorial mantra. The paper’s C.E.O., Will Lewis, and its editor, Matt Murray, came from The Journal.

When Andrew asked Bezos at the DealBook Summit in December about how he planned to save the paper, the Amazon founder said only that he has “a bunch of ideas.”

But another comment was perhaps more telling: When asked what he thought about President Trump calling the press “the enemy of the people,” Bezos said he would convince him otherwise. “Let’s go persuade him of this,” he said. “Let’s go talk to him.”

Using robots to meet a power challenge

Among President Trump’s first moves in his second term was declaring a national energy emergency, an initiative that includes fortifying the country’s electricity grid and boosting production to help power projects like artificial intelligence data centers.

To seize on that, the NAES Corporation, a major provider of plant operations and maintenance services, said on Thursday that it had signed a $100-million-plus-contract with the start-up Gecko Robotics to deploy robots and A.I. to do just that.

What’s happening: Gecko’s robots will run tests, surveys and more at NAES-operated plants — the company has a presence at more than 250 nationwide — with the aim of being deployed at three to five plants within the next 12 months. The partnership could also lead to NAES licensing the technology to other utility operators.

The back story: The 12-year-old Gecko was founded by two college graduates after being asked to build a robot to scan a local power plant’s walls for problems. Since then, the Pittsburgh-based company has signed government and corporate clients, including the U.S. Navy and the mining giant Rio Tinto.

The company has raised $222 million to date, including a $173 million round in 2023 led by investors like Peter Thiel’s Founders Fund.

NAES’s chief executive, Mark Dobler, said he was impressed by Gecko’s story after seeing its C.E.O., Jake Loosararian, speak at the All-In Summit last fall. The two began discussing how to work together — with Trump’s declaration providing a final prod.

Why it matters: Dobler and Loosararian told DealBook that the power industry is under increasing pressure. While the Trump administration’s energy policy includes speeding up the construction of new plants, there’s a need to make existing utilities more productive, especially given growing demands on the grid.

Every time Dobler hears discussions about Nvidia chips and the need to train A.I. models, he said, “I hear kilowatts.”

At the same time, up to a quarter of the utilities industry’s work force is expected to retire over the next decade or so. “Labor shortages are a really important thing right now,” Loosararian said.

It’s also a bet on the rising popularity of robotics, with start-ups in the field raising huge sums.

THE SPEED READ

Deals

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