If there’s one thing we’ve learned in recent years in the tech sector, it’s to never, ever underestimate Elon Musk.
This is a guy who took Wall Street by storm. His car company, Tesla (TSLA), has been a market darling. In October of 2012, you could have bought a share of Tesla stock for about $28. That share will cost you over $200 today.
Tesla has a market cap of nearly $28 billion despite never having had a year with positive earnings. EPS for the trailing 12 months is ($2.36). For comparison purposes, Tesla’s market cap is only a little less than half that of General Motors, which had net income of $2.8 billion last year.
Such is the genius of Elon Musk that he’s convinced investors he has a product whose sales will grow, essentially, to the moon.
Thus when we came across a story headlined Why Tesla’s Battery for Your Home Should Terrify Utilities, we had to take a look.
Seems that during a mostly disappointing Tesla earnings call last week, Musk casually dropped the news that his company is working on a full-house battery that could help you break up with your expensive utility company and propel you into off-grid self-sufficiency. You can listen to the call if you’re curious.
Interest in solar power is nothing new for Elon. He chairs a company called SolarCity, which has been installing panels on people’s roofs since 2006, now has 168,000 customers, and controls 39% of the residential solar market.
With solar power the big bugaboo is energy storage—when the sun is shining, you aren’t always using electricity, and vice versa. So your solar power always had to come with a regular utility hookup or a giant room full of expensive and toxic lead acid batteries (99% of people opted for the former, of course). Now along comes Musk, claiming that he has a battery on the way that’ll solve that problem. The design should be available to see within the next month or two, and production could begin in as little as six months.
Musk says that within 5-10 years, every set of solar panels that SolarCity installs will come with a battery pack. That dovetails nicely with last fall’s announcement that Tesla will build a vast “gigafactory” for producing lithium-ion batteries in Nevada. Not everyone is convinced, let it be said.
How successful these efforts will be remains to be seen. But as noted at the outset, this is one tough cookie to bet against.
Your Computer’s Hard Drive Is Telling On You
Chances are you trust your computer’s hardware. The software on it might end up infected by some malware, but you can always wipe it and start over, confident you’re rid of the spies. Not so fast…
As if we didn’t have enough to worry about on the privacy front, Kaspersky Lab—a highly regarded, Moscow-based software security company—announced on Monday that a Western government agency (Kasperky is Russia based) has been planting surveillance software deep within hard drives made by top manufacturers, allowing it to eavesdrop on almost every computer in the world. And it’s been at it for many years.
Kaspersky declined to identify the offending agency by name, preferring instead to say that the company has discovered “a threat actor that surpasses anything known in terms of complexity and sophistication of techniques, and that has been active for almost two decades—The Equation Group.” But the obvious assumption is that they’re talking about the NSA.
The spyware is closely related to the Stuxnet virus, the malicious code developed by the US and Israel that caused widespread damage to the Iranian uranium enrichment program. It can be found within drives manufactured by Western Digital (WDC) and Seagate (STX), which have denied that they had any knowledge of such programs. Samsung and Toshiba drives are also affected, but they have so far declined to comment.
This is the first known malware capable of infecting the hard drives, and it’s particularly malicious since the computer essentially reinfects itself every time it starts up the hard drive. Infection occurs primarily through the use of Trojans delivered from the outside to unsuspecting victims who will never know they’re there. But the attackers went further and also used an interdiction technique—intercepting physical goods and replacing them with Trojanized versions.
The good news is that institutions with infected hard drives should be able to detect the NSA spyware using technical details that Kaspersky published in its report—though it’s not really clear if mere mortals will be able to do so any time soon.
Of course, if you can’t count on your government’s expensive viruses to get you in the door any longer, just change the law and make it so the government can hack you any time. That’s what the US is doing. Thankfully, at least Google is fighting back publicly.
Bits & Bytes
Fresh off Apple’s (AAPL) record-breaking quarter, talk of a trillion-dollar market cap is popping up… yet again. The latest comes from UBS. The investment firm believes Apple can reach the trillion-dollar mark on the back of a “mega-ecosystem”, which includes the iPhone and services like Apple Pay, Car Play, HomeKit, and HealthKit. A trillion-dollar market cap implies share price appreciation of around 35%.
Still, at least one famous fund manager is reducing his stake. David Einhorn of Greenlight Capital recently sold around a half-million Apple shares. But he still holds about 8.6 million shares, making Apple one of his top positions.
Apple will buy Tesla. That bold prediction comes from tech pundit Jason Calacanis, who cites 19 reasons why Apple will scoop up the electric carmaker. The deal will happen in the next 18 months, claims Calacanis. He sees a purchase price of $75 billion, a hearty 300% premium over Tesla’s current market value. But shareholders might want to reject that bid. CEO Elon Musk thinks Tesla’s market cap could match Apple’s in 10 years. That would mean a 30-fold increase in share price.
It will be one of the most expensive Apple products to date. We’re talking about the coming Apple high-end watch, which will be cased in 18-karat gold and carry a price tag in excess of $4,000.
Apple is pouring nearly $1 billion into a solar farm, which CEO Tim Cook describes as the company’s “biggest, boldest and most ambitious project ever.” Cook claims the investment will have significant environmental and financial benefits via savings on powering the company’s energy-hungry data centers. Apple is working with First Solar (FSLR) on the project.
One last thing about Apple, in case you were hiding under a rock. It’s reportedly developing an electric vehicle, dubbed project Titan. The prototypes of the project appear to be in the form of minivans, which have been spotted in New York and California. Some say the project is essentially a publicity stunt. Others say Apple is dead set on developing a car, which is bad news for Big Auto.
Turns out Apple isn’t the only tech company eyeballing the auto market. Sony (SNE) recently took a 2% stake in ZMP, a Japanese startup making robot cars. The two firms ultimately hope to develop self-driving car technologies by combining Sony’s expertise in image sensors with ZMP’s expertise in robotics. Sony aims to be number 1 in auto image sensors.
Meanwhile, Sony is going through a major overhaul, which includes moving away from low-margin products like computers, televisions, and mobile phones. Hopefully, Sony’s hideous smartglasses are on the chopping block too. The restructuring effort will help lead to a 25-fold profit jump by 2018, according to the company.
Zero emissions is nice and all, but speed is what we really want. Tesla’s Model S P85D has plenty of that. How fast? Try 0 to 60 in about three seconds flat. That kind of acceleration is comparable to some of the world’s fastest sports cars, such as Lamborghini, Ferrari, and even the McLaren F1 supercar.
Speaking of speed, 5G is on the way. The next-generation network should be rolled out near the end of the decade. It will boast download speeds of about 30 times that of its predecessor, 4G.
Short taxi medallions! That’s what the folks at the investment firm Jeffries recommend. It’s a way to play the rise of car-sharing services like Uber, which threaten to upend the taxi industry and drive down the price of taxi medallions, or licenses to drive cabs… that is, until regulators shut it all down and constrain supply again.
Genetically modified (GM) apples just got the nod from the USDA. The appeal: they don’t turn brown quickly when bruised or sliced. That means less waste. Sounds like a good deal. But not everyone agrees. Friends of the Earth say the GM apples could be unsafe, and are certainly unnecessary, as the browning process can be slowed by applying natural substances, like lemon juice.
Amazon’s (AMZN) plans to deliver packages with drones just suffered a setback. The FAA recently proposed regulations on drones, including prohibiting the unmanned aircraft from flying over people not involved in the drone operations, and requiring drones to be flown by an observer on the ground who can maintain visual contact with the aircraft.
The White House has added another national tech position: Chief Data Scientist. So is this going to be like the FDA and Surgeon General, and will the first person to occupy this office recommend throwing your computer in the bathtub to lubricate its ball bearings? That’s roughly equivalent to reducing your salt intake to levels that will kill you, reducing cholesterol for no good reason, or a host of other awful medical advice perpetuated by the government. Hopefully our new data commander in chief knows the difference between good data and lobbying spin.
Lastly, Nike (NKE) just released an app that has quickly become a massive hit. Simply put, it could transform the entire world of fitness virtually overnight.