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After reviewing Tesla’s earnings, CNBC’s Jim Cramer on Thursday criticized CEO Elon Musk and told investors why he thinks the electric vehicle giant has lost its spot among the “Magnificent Seven” tech stocks.
“As someone who was among the first to vocalize the Magnificent Seven rubric, I officially acknowledge now that there are only six left,” he said.
Tesla’s Wednesday report missed Wall Street’s expectations and warned of a slowdown in 2024, sending its stock plummeting, down 12% by Thursday’s close.
To Cramer, there are a number of factors revealed during earnings that alienate Tesla from its magnificent peers — Apple, Nvidia, Microsoft, Amazon, Alphabet and Meta — including the fact that the company predicted “notably” slower growth this year. Tesla also faces intense competition from Chinese competitors, and Musk admitted that without trade barriers, these foreign manufacturers will “pretty much demolish most other companies.” And according to Cramer, the other six aren’t hostage to the performance of the broader economy, while Tesla purported many customers can’t afford its vehicles.
Cramer also criticized Tesla’s leadership, saying top management of great companies show they’re committed to the success of their enterprise. Musk, however, indicated he doesn’t want to grow the company’s artificial intelligence and robotics sector unless he has more influence. Musk is asking for 25% voting control, nearly double his current stake. Cramer was also not pleased with Musk’s earnings call reassurance that this larger stake wouldn’t be so much “that I can control the company even if I go bonkers.”
Tesla did not immediately respond to a request for comment.
“Oh, thank heavens, you don’t have a Magnificent Seven CEO who might go bonkers and, more important, what if he doesn’t get his 25% voting power?” Cramer asked. “Does he take his bat and his ball, along with his artificial intelligence and robotics juggernaut, and go home?”
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