Tech Stocks

Tesla (TSLA) Surges for Two Consecutive Days Following Mixed Q1 Earnings Report

In the wake of Tesla’s Q1 2024 earnings report released after the market close on April 23rd, the company revealed a revenue of $21.301 billion, marking an 8.7% year-over-year decline and slightly missing analysts’ expectations of $22.3 billion. However, amidst these figures, Tesla(TSLA) CEO Elon Musk dropped a bombshell during the earnings call, announcing plans to commence production of new vehicle models, including affordable electric cars, “early in 2025, if not later this year.”

This groundbreaking news served as a catalyst for Tesla’s stock, which witnessed an impressive upward trajectory over the past two days, accumulating a whopping 19.80% surge. The consecutive days of gains indicate a renewed investor confidence in Tesla’s future prospects despite the tepid Q1 performance.

The Q1 results, while not meeting expectations, highlight some underlying strengths within Tesla’s business model. With Musk’s visionary leadership and the company’s relentless pursuit of innovation, Tesla remains a formidable player in the electric vehicle industry.

Tesla’s strategic positioning as an industry leader, coupled with the anticipation surrounding its future product lineup, has positively impacted its business outlook and stock performance. Investors are advised to closely monitor Tesla’s developments to capitalize on potential growth opportunities.

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Alphabet Surges Over 15% After Impressive Q1 Earnings Beat

Following the release of its first-quarter 2024 financial report on Thursday, April 25th, Alphabet(GOOGL), the parent company of Google, exceeded market expectations with robust financial performance. The company reported total revenue of $805.4 billion for the first quarter, marking a remarkable 15% year-over-year growth, the fastest pace since early 2022, and surpassing market expectations of $790.4 billion. Adjusted earnings per share surged by an impressive 61.5% year-over-year to $1.89, up from $1.17 in the same period last year. Net profit saw a significant 57% year-over-year jump to $236.6 billion.

Alphabet’s cloud business recorded a strong performance, with first-quarter revenue soaring by 28.4% year-over-year to $95.7 billion. Meanwhile, the core advertising business, a key revenue driver for Google, also experienced solid growth, with first-quarter advertising revenue climbing by 13% year-over-year to $616.6 billion.

In a shareholder-friendly move, Alphabet’s board of directors approved a cash dividend of $0.20 per share to be paid on June 17th to shareholders of record as of June 10th. Additionally, the company announced its intention to continue paying quarterly cash dividends in the future. Furthermore, Alphabet authorized an additional $700 billion share repurchase program.

Buoyed by the better-than-expected performance across advertising and cloud revenues, as well as the historic announcement of quarterly dividends, Alphabet’s stock price surged over 15% to hit a new all-time high in after-hours trading.

Alphabet’s outstanding first-quarter results, coupled with its shareholder-friendly initiatives, underscore its position as a top growth stock to watch. With its diverse revenue streams and strong financial performance, Alphabet presents significant upside potential for investors seeking growth opportunities in the technology sector.

Top Stocks

Airbus (AIR) Prepares Supply Chain for Increased Production of A350

Airbus CEO announced on April 25th that the company has made supply chain preparations for ramping up production of its A350 aircraft.

The statement comes amidst growing demand for the A350 model, reflecting Airbus’s proactive approach to meeting market needs and capitalizing on the popularity of its flagship product.

In the first quarter, Airbus reported solid financial performance, with revenue and profitability reflecting the resilience of its business operations despite ongoing challenges in the aviation industry due to the COVID-19 pandemic.

The announcement regarding the A350 production increase underscores Airbus’s confidence in the long-term prospects of the aircraft market and its commitment to meeting customer demand efficiently and effectively.

Investors are likely to view Airbus’s proactive measures positively, as they signal the company’s ability to adapt to changing market conditions and capitalize on growth opportunities.

The news may also have a positive impact on Airbus’s stock price, as investors interpret the company’s proactive stance as a sign of strength and resilience in the face of industry challenges.

Overall, Airbus’s readiness to increase A350 production reflects its strategic vision and commitment to maintaining its position as a leading player in the global aerospace industry.

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Best Stocks To Buy For 2024: Snap Surges(SNAP)

On April 25th, Snap(SNAP) announced its first-quarter earnings, stunning analysts and investors alike with its exceptional results, leading to a surge of over 28% in its stock price in after-hours trading.

Snap reported adjusted earnings per share of $0.03, surpassing expectations of -$0.048 per share. The company’s revenue for the quarter stood at $1.19 billion, exceeding the expected $1.12 billion. Additionally, Snap’s adjusted EBITDA for the quarter was $45.7 million, far surpassing the anticipated -$67.6 million. The platform also saw a significant increase in its daily active users, reaching 422 million, slightly above the expected 419.83 million.

Looking ahead, Snap provided strong guidance for the second quarter, expecting revenue to range between $1.23 billion and $1.26 billion, compared to analysts’ expectations of $1.21 billion. The company also projected adjusted EBITDA to be between $15 million and $45 million, exceeding analysts’ expectations of $10.6 million.

Snap’s impressive performance in the first quarter underscores the platform’s growing popularity and its ability to monetize its user base effectively. The company’s innovative features and strategic investments in augmented reality and content creation have resonated well with users and advertisers alike, driving robust revenue growth.

Investors have responded enthusiastically to Snap’s stellar earnings report, propelling the stock price up by over 28% in after-hours trading. The company’s strong financial results, coupled with its optimistic outlook for future growth, position Snap as an attractive investment opportunity.

In conclusion, Snap’s exceptional first-quarter performance reaffirms its status as a top contender in the social media and technology sector. With its innovative products, expanding user base, and improving financial metrics, Snap emerges as one of the best stocks to buy for investors seeking exposure to the rapidly evolving digital landscape.

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IBM’s Disappointing Q1 Performance Sends Stock Tumbling Over 7%

IBM (IBM) reported its first-quarter earnings on April 24th, with earnings per share coming in at $1.72, beating expectations of $1.30. However, the company fell short of revenue expectations, reporting $14.46 billion compared to the anticipated $14.55 billion. Despite the earnings beat, IBM’s net profit of $1.61 billion was lower than the expected $1.16 billion. Following the earnings release, IBM’s stock price plummeted over 7% in after-hours trading.

The disappointing first-quarter performance has raised concerns about IBM’s business outlook and financial health. Despite exceeding earnings estimates, the revenue miss and lower-than-expected net profit have contributed to investor skepticism regarding the company’s ability to drive growth and profitability. The significant drop in IBM’s stock price underscores investor apprehension and suggests a lack of confidence in the company’s future prospects.

IBM’s struggles in the first quarter may be indicative of broader challenges facing the company, including stiff competition in the technology industry and a shifting landscape driven by digital transformation trends. As IBM continues to navigate these challenges, investors may remain cautious about the company’s stock, given the uncertainties surrounding its performance and outlook.

The latest earnings report underscores the need for IBM to address underlying issues and implement effective strategies to regain investor confidence and drive sustainable growth. However, with the sharp decline in its stock price following the earnings release, IBM may face an uphill battle in rebuilding investor trust and restoring its market position.

Tech Stocks

Time to Sell NVIDIA Stocks as Company’s Growth Falters

NVIDIA Corporation (NVDA) faced a significant setback on April 24th as its stock plummeted over 3%, breaching the crucial $800 mark once again. This decline comes amidst concerns over the company’s growth trajectory and its ability to meet market expectations.

Despite its reputation as a leader in AI computing and graphics processing, NVIDIA’s performance in the second quarter has raised doubts among investors. With lackluster growth and an inability to sustain its high stock price, some analysts are suggesting that it may be time for investors to consider selling their NVIDIA shares.

The disappointing stock performance reflects broader concerns about NVIDIA’s business outlook. While the company continues to invest in cutting-edge technologies and pursue strategic acquisitions, such as the recent acquisition of Israeli AI startup Deci, its efforts have yet to translate into meaningful growth.

Moreover, NVIDIA’s stock price appears to be overvalued, further exacerbating concerns among investors. The company’s lofty valuation may not be justified by its current financial performance, leading many to question whether it is worth holding onto NVIDIA stocks at this time.

In light of these developments, investors are advised to carefully reassess their positions in NVIDIA. While the company remains a formidable player in the tech industry, its recent struggles and uncertain outlook suggest that there may be better investment opportunities elsewhere.

In conclusion, NVIDIA’s underwhelming performance and overvalued stock price signal that it may be time to sell NVIDIA stocks. Investors should weigh the risks and rewards carefully and consider reallocating their investments to more promising opportunities in the market.

Financial stocks

Visa Beats Market Expectations with Strong Second Quarter Performance

Visa Inc. (V) saw its stock surge by over 2% in pre-market trading on April 24th, following the announcement of its second-quarter earnings report, which surpassed market expectations.

For the second quarter, Visa reported robust financial results, outperforming market forecasts and demonstrating its resilience amidst ongoing economic challenges. The company’s ability to exceed market expectations reflects its strong business fundamentals and strategic resilience in the face of adversity.

Visa’s impressive performance in the second quarter is indicative of its continued dominance in the payments industry. Despite market uncertainties, Visa has managed to sustain its growth trajectory and deliver value to its shareholders.

Investor confidence in Visa’s prospects has been bolstered by its strong second-quarter performance, leading to a significant increase in the company’s stock price. The positive market reaction underscores Visa’s status as one of the best stocks to buy for 2024 and beyond.

Looking ahead, Visa remains well-positioned to capitalize on emerging opportunities in the digital payments space and drive future growth. With its innovative solutions and expansive global network, Visa is poised to maintain its leadership position in the payments industry.

In conclusion, Visa’s exceptional second-quarter performance reaffirms its status as a top-tier investment choice. As the company continues to deliver strong results and navigate evolving market dynamics, it presents compelling opportunities for investors seeking stable returns and long-term growth potential.

Auto Car Stocks

Tesla Stock Soars 13% After-Hours! Musk Plans to Begin Production of Lower-Priced Model Sooner

Tesla (TSLA) reported a 9% decline in revenue for the first quarter, the largest drop since 2012, falling below analysts’ expectations, as the electric car company grapples with ongoing price cuts.

Tesla CEO Elon Musk told investors that production of the new affordable electric vehicle model may start earlier than expected, leading to a significant surge in Tesla’s stock price in after-hours trading.

The drop in sales was even greater than the company’s last decline in 2020, which was due to production disruptions during the pandemic. Tesla’s automotive revenue fell by 13% year-over-year to $17.38 billion in the first three months of 2024.

During the earnings call, Musk stated that the company plans to start production of the new model “by early 2025, if not late this year,” earlier than previously anticipated to begin in the second half of 2025. Musk also touted Tesla’s investments in artificial intelligence infrastructure and mentioned negotiations with “a major automaker” to license its Full Self-Driving (FSD) system, marketed in the US as “Full Self-Driving.”

Tesla reiterated its pessimistic outlook for 2024, telling investors that “sales growth rates may be significantly lower than in 2023.”

Before surging 13% in after-hours trading, Tesla’s stock had fallen by over 40% this year to its lowest level since January 2023, amid concerns about delivery shortfalls, among other issues. Earlier this month, Tesla reported an 8.5% year-over-year decline in vehicle deliveries for the first quarter.

The company stated that it is accelerating the introduction of “new vehicle models, including more affordable ones,” which will “be produced on the same production lines as Tesla’s existing product line.” Tesla aims to “fully utilize” its current capacity and achieve “more than 50% growth in output compared to 2023” before investing in new production lines.

Sales growth in electric vehicles is slowing, and Tesla’s first-quarter gross profit plummeted by 18%, partly due to this year’s price cuts.

Chris Redl, an automotive analyst at Siena Capital, estimated that Tesla’s deferred revenue from FSD for the quarter amounted to as much as $700 million. This is approximately 4.3% of Tesla’s automotive revenue after deducting regulatory credits.

Tesla began a significant restructuring this month, with two executives, Drew Baglino and Rohan Patel, resigning. Musk stated in a company-wide memo last week that Tesla will cut over 10% of its global workforce.

Revenue from Tesla’s energy division increased by 7% to $1.64 billion compared to the same period last year, while services and other revenue grew by 25% to $2.29 billion.

During the earnings call, Musk was asked whether he plans to leave Tesla, given his various roles, including leading SpaceX and other ventures. Musk did not provide a direct answer but indicated that he works most of the time, rarely taking Sundays off, and will strive to ensure Tesla “thrives very well.”

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Best Stocks to Buy for 2024: Spotify Technology (SPOT)

Spotify Technology (SPOT) has unveiled impressive financial results for the first quarter, showcasing robust growth and a promising outlook for the company. With a substantial increase in revenue and operating profit, SPOT’s stock witnessed a significant surge in pre-market trading, reaffirming its status as a top pick for investors.

In the first quarter, Spotify reported a revenue of €3.636 billion, marking a remarkable 20% year-over-year growth. The company’s operating profit surged to €1.004 billion, representing a notable 31% increase compared to the same period last year. Per-share earnings also saw a remarkable turnaround, with a profit of €0.97 per share compared to a loss of €1.16 per share in the previous year.

The strong financial performance underscores Spotify’s continued success in the highly competitive music streaming industry. Despite facing stiff competition from rivals and challenges in content acquisition, Spotify has managed to attract a large user base and expand its premium subscriber count, driving revenue growth and profitability.

Spotify’s strategic investments in content development, technology innovation, and user experience enhancements have positioned it as a leader in the digital streaming market. The company’s focus on personalized recommendations, curated playlists, and exclusive content offerings has resonated well with users, driving engagement and retention.

As the demand for digital entertainment continues to soar and streaming services become increasingly popular, Spotify is well-positioned to capitalize on this trend and sustain its growth momentum. With a solid business model, strong brand presence, and innovative approach to content delivery, Spotify Technology (SPOT) remains a compelling investment opportunity for those seeking exposure to the digital media sector.

In conclusion, Spotify’s stellar financial performance and stock surge underscore its position as one of the best stocks to buy for 2024 in the digital streaming industry. With a track record of delivering strong results and a promising outlook for future growth, Spotify Technology (SPOT) presents an attractive investment opportunity for investors looking to capitalize on the digital entertainment revolution.

Stocks Market

Sell-off Looming? Two Giants Issue Sudden Warnings!

Is the decline in US stocks just getting started?

Today, Marko Kolanovic, Chief Market Strategist at J.P. Morgan, stated that the recent three-week decline in the US stock market is just the beginning of a larger-scale sell-off. With the escalation of macroeconomic risks such as rising US bond yields, a stronger dollar, and increasing oil prices, the sell-off could intensify.

Meanwhile, strategists at Bank of America have also issued a warning, stating that there is a high risk for US tech giants to fulfill their promises in artificial intelligence amid the possibility of profit slowdown. The bank forecasts that although these companies’ first-quarter growth is still expected to be 39% higher than the same period last year, it is lower than the 63% growth seen in the last three months of 2023. The bank’s strategists predict that by the fourth quarter, the growth gap between the seven tech giants and other companies in the S&P 500 index may narrow, potentially leading to a shift of funds from tech stocks to value-oriented stocks.

This week, Tesla (TSLA), Meta (formerly Facebook), Microsoft (MSFT), and Google’s parent company Alphabet (GOOG) will all report their earnings. Last week, Wall Street expressed concerns about the upcoming earnings reports, with the tech-heavy Nasdaq falling 5.5% for the week, marking its largest weekly decline since November 2022. Analysts suggest that whether the sell-off in tech stocks will continue depends on the earnings reports of major tech companies.

Warnings from J.P. Morgan and Bank of America

On Monday local time, Marko Kolanovic, Chief Market Strategist at J.P. Morgan, stated in a report that although corporate earnings expected to be announced this week may temporarily stabilize the market, it does not mean that the stock market has overcome its difficulties.

Marko Kolanovic pointed out that factors such as complacency in market valuations, persistent high inflation, diminished expectations of a rate cut by the Federal Reserve, and overly optimistic profit expectations have intensified downside risks, and the future sell-off in US stocks may deepen further. Marko Kolanovic wrote, “Market corrections are typically defined as declines of 10% or more, and pullbacks may continue. Market concentration has been very high, with expanded positions, which is typically a danger signal with the risk of a reversal.”

Marko Kolanovic believes that recent trading patterns and the current market narrative are similar to those of last summer. At that time, unexpected inflation increases and the Fed’s monetary policy shift to hawkishness triggered declines in risk assets. However, unlike then, investors’ positions now appear to be even higher, which also means greater downside risk.

The strategist advises investors to remain defensive when the stock market looks “problematic.” In his model portfolio, defensive strategies include hedging risky assets with long-term volatility and exposure to commodities (excluding gold).

In addition, Marko Kolanovic also told clients that it is time to consider buying Japanese consumer-related stocks, as expected real wage growth is expected to stimulate personal consumption in Japan, boosting consumer stocks.

Marko Kolanovic and his team are among the few bearish contrarian investors on Wall Street this year. While most of their peers are raising their expectations for US stocks, these J.P. Morgan strategists generally remain pessimistic about stocks and risk assets, with their year-end target for the S&P 500 index at 4200, the lowest among major Wall Street banks. This target implies a decline of about 16% from Monday’s closing level for the S&P 500 index by the end of 2024.

Furthermore, on Monday local time, analysts at Bank of America also issued a warning, stating that there is a high risk for US tech giants to fulfill their promises in artificial intelligence amid the possibility of profit slowdown. Although these companies’ first-quarter growth is still expected to be 39% higher than the same period last year, it is lower than the 63% growth seen in the last three months of 2023.

Bank of America points out that companies in the S&P 500 index, excluding the seven tech giants, are expected to see a 4% year-on-year decline in earnings for the first quarter. However, according to Bank of America’s data, about 25% of stocks in the benchmark index are expected to achieve positive earnings growth and accelerate growth in the first quarter.

The bank’s strategists predict that by the fourth quarter, the growth gap between the seven tech giants and other companies in the S&P 500 index may narrow, potentially leading to a shift of funds from tech stocks to value-oriented stocks.

Market Disagreements Abound

However, analysts on Wall Street have widely differing views on US stocks.

UBS recently stated that the momentum of US tech giants is dissipating, as the sector’s previously enjoyed profit momentum faces cooling. Ahead of this week’s earnings releases, UBS downgraded its industry ratings for six major tech giants, including Google, Apple, Amazon, Meta, Microsoft, and Nvidia, from “overweight” to “neutral.” UBS expects the earnings growth of these six US tech stocks to slow down, with other tech stocks likely to outperform them by the end of this year.

On April 22, King Lip, Chief Strategist at Baker Avenue Wealth Management, stated that whether the sell-off in tech stocks will continue actually depends on the reports of major tech stocks. He said, “Since we’ve had a little bit of a correction, valuations are definitely more reasonable now.”

King Lip said, “The pullback was long overdue. I think this is just a regular adjustment at this point.” He has begun increasing stock exposure for clients and plans to buy more stocks as the stock market declines further. However, he believes that the S&P 500 index may decline by up to 10% from its high on March 28.

The stock strategy team led by Michael Wilson at Morgan Stanley stated that with the strengthening of the US economy, it is expected that US corporate profit growth rates in 2024 and 2025 will significantly improve. This is also a rare optimistic outlook for earnings per share by “big short” Michael Wilson since 2023. Regarding the latest outlook for US stock earnings, Michael Wilson emphasized that the rebound in US business activity survey data, supported by new order data, “confirms the sustained trend of future profit growth.”

In addition, Dan Ives, an analyst at the well-known investment firm Wedbush, stated that extensive field research has made the firm very confident in corporate AI spending and expects AI spending to account for approximately 10% of enterprise IT budgets this year, compared to less than 1% in 2023.

Dan Ives said that the profit environment for tech companies still looks strong, especially considering the fervor for artificial intelligence among major corporations, which has driven the surge in tech stocks over the past year. The strategist added that an incredibly strong earnings season could be the main positive catalyst for tech stocks, predicting a further 15% surge in the industry by the end of 2024.

A recent research report from CICC pointed out that the expectation for the postponement of a Fed rate cut is still brewing. Currently, the number of rate cuts implied by CME interest rate futures has been reduced to one, leading to continuous rises in the 10-year US Treasury yield and the dollar, approaching previous highs. This “fire” finally “burned” to US stocks last week, with the S&P 500 index falling 3.1% last week, and the Nasdaq index plummeting 5.5%, attracting market attention. CICC said, “We are not surprised by this. On the one hand, the decline in US stocks has its ‘inevitability,’ and on the other hand, the decline in US stocks at this level is not a bad thing. It not only can digest its overly strong expectations but also helps restart rate-cutting trades, thereby laying the foundation for subsequent rebounds.”

Gloomy Outlook for Tesla

On April 22, Tesla’s stock price fell by 3.4%, marking the seventh consecutive trading day of decline and further reducing its market capitalization to $452.4 billion. Since the beginning of this year, Tesla’s stock price has cumulatively fallen by 43%, evaporating $339 billion in market value, equivalent to about 24.6 trillion yuan.

After-market trading on April 23, Tesla will report its first-quarter earnings. Wall Street expects Tesla to face its worst quarter in seven years, with the first-quarter gross margin expected to hit its lowest level since early 2017. According to a survey of 20 analysts by data analysis platform Visible Alpha, Wall Street expects Tesla’s automotive gross margin, excluding regulatory credits, to be 15.2%, down from 19% in the same period last year, the lowest since the fourth quarter of 2017.

In addition, according to Bloomberg’s widespread estimates, Tesla’s adjusted earnings per share for the first quarter are expected to be $0.52, with the highest revenue reaching $22.31 billion. This will be the first revenue decline for the company in four years. In terms of profitability, Tesla is expected to achieve a operating profit of $1.49 billion in the first quarter, a 40% decrease from a year ago. In terms of non-GAAP indicators, Wall Street expects adjusted net income to be $1.79 billion and adjusted EBITDA to be $3.32 billion.

Currently, Tesla’s sales growth is slowing, and it is expected to have a significant impact on Tuesday’s earnings. Earlier this month, data disclosed by Tesla showed that it delivered 386,800 vehicles in the first quarter, an 8.5% decrease from the same period last year, while inventory increased.

This weekend, Tesla announced price cuts for its Model 3, Model Y, and other models worldwide, further eroding profits. Several analysts expect Tesla’s annual deliveries to decline for the first time in 2024 after years of double-digit growth. Tesla warned in January that growth in deliveries this year would “significantly decrease,” indicating that price cuts were not enough to boost demand.

Last week, the electric car maker announced layoffs of more than 10%, and on the same day, Drew Baglino, Senior Vice President of Tesla Powertrain and Energy Engineering, and Rohan Patel, Vice President of Public Policy and Business Development, announced their resignations. Analysts said Tesla’s layoffs were directly related to the company’s “Waterloo” in the first quarter of 2024 as automotive sales faltered.

John Murphy, an analyst at Bank of America, wrote in a report, “Sentiment towards Tesla has worsened since the end of 2023.” Recently, more than 10 institutions, including Goldman Sachs, Morgan Stanley, and Deutsche Bank, downgraded their 12-month target prices for Tesla.

Among them, Deutsche Bank downgraded Tesla’s rating from “buy” to “hold” and lowered its target price from $189 to $123. The bank pointed out that the launch of the low-cost car Model 2 is likely to be delayed, and the company’s strategic focus has shifted to the robotaxi business, which is considered to have management risks and requires several years.

Overall, the divergence in Wall Street’s views on US stocks, especially in the tech sector, underscores the uncertainty and volatility currently prevailing in the market. Investors are closely monitoring earnings reports and macroeconomic indicators for clues about the future direction of the stock market.

With concerns about profit growth, inflation, interest rates, and geopolitical tensions lingering, investors face a challenging environment characterized by heightened risk and increased market turbulence. As the situation evolves, market participants must remain vigilant and adapt their strategies accordingly to navigate through these uncertain times.