Tesla's Earnings Release | Jessica Amir on Dubai Eye
Moomoo Market Strategist Jessica Amir was recently in an interview on Dubai Eye, the most listened-to radio show in the UAE. She discussed the expectations for the Tesla earnings release, why investors are buying the Tech dip, and what needs attention when 38% of the S&P500's market cap reports results.
Expectations for Tesla's earnings release
Tesla stock has dropped 40% this year, but a rebound could be expected after the earnings report. Jessica said the decline in Tesla's stock price is primarily attributed to increased competition. Xiaomi, a Chinese smartphone company, sold out its latest EV within 48 hours, featuring 5-minute fast charging, while Tesla's smart charger takes 30 minutes. Additionally, disappointing earnings over the last four quarters have led to a 9.3%-12% drop in Tesla shares after the results. However, if history repeats itself, Robotaxi and FSD bulls might buy the dip, potentially driving up Tesla shares sooner than expected.
Additionally, from a fundamental perspective, Tesla is also cutting costs globally. If Musk introduces a cheaper EV, Tesla could regain market share in China (especially since Tesla now has 0% car finance in China). Jessica reiterated that Tesla could release smarter, quicker-charging batteries later this year, which could fuel a stock price recovery.
Investors have been buying into the dip in Tech Stocks
The market's fear gauge, measured by the VIX index, dropped from a 6-month high within just two days, but remains at 16 above trends, signaling caution in the air. Investors are seizing the opportunity to buy into Tech. After the Nasdaq 100 fell approximately 8%, ETF buying of QQQ surged by $3.6 billion last week, totaling $2.08 billion so far this month.
Mag-7 in the spotlight
Twelve of the major tech companies have reported results, including Adobe, Netflix, and Micron, with sales and earnings surpassing expectations by a significant margin. This is partly due to the lowered earning expectation bar, making it easier for companies to exceed it.
In the Mag-7, attention is drawn to Microsoft (MSFT), which released its earnings report on Thursday. Commercial cloud revenue growth is expected to remain robust at 19%, despite anticipated strong growth across most cloud products. Intel's (INTC) revenue is forecasted to increase by 8.6%, primarily driven by client computing business. However, four out of its six business segments may experience sales declines.
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