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Stocks

Tesla Surges 14% on FSD Approval in China: Key Win for EV Giant Amidst Rising Competition

Tesla (TSLA) $193 up 14%

Good news for Tesla – Musk’s China visit seems to have paid off. The markets and the street love it and it’s great for those of you who had the patience to hold on to it. 

One of the key reasons for the approval seems to be the collaboration with Baidu, plus China was very keen for a win. Nonetheless, this is good for the market. Two heavyweights Apple and Tesla are seeing support.

Read on from Barron’s today.

https://www.barrons.com/articles/tesla-stock-price-news-china-elon-musk-8476fa2e?mod=BRNS_ENG_NAS_EML_BULLETIN_AUTO_NAH

Tesla Stock Soars on FSD Approval in China. 

3 Reasons the News Is a Big Deal.

According to Barrons “The win does a few things for Tesla. For starters, better driver-assistance products can mean more demand for Tesla vehicles in China. Second, it demonstrates the company can navigate complicated government regulations related to driver-assistance technology. And third, it shows that Tesla has increasing confidence in the quality of its self-driving car technology.”

“We expect this announcement to lead to a near-term uptick in FSD attach rates—which we currently model at about 10%—and improve the offering longer-term,” wrote Baird analyst Ben Kallo in a Monday report. Attach rates refer to how many people buying Tesla vehicles also buy FSD. “We also view this announcement as a potential pathway for Tesla to follow for entering new markets.”

“While the long-term valuation story at Tesla hinges on FSD and autonomous, a key missing piece in that puzzle is Tesla making FSD available in China which is now a done deal,” added Ives. “This is a key moment for Musk as well as Beijing at a time that Tesla has faced massive domestic EV competition in China along with softer demand.”

To help win Chinese approval for FSD, Musk needed to assuage regulators’ concerns about data security risks. To that end, he agreed to use navigation and mapping functions provided by Chinese firm Baidu BIDU 5.77%, the Journal said.

Baidu’s American depositary receipts, or ADRs, were up 4.1% in early trading at $104.65 apiece.

Categories
Cloud Service Providers

Microsoft Q3 Earnings: Strong Revenue Growth Across Key Segments, Stock Rises 5%

  • Microsoft press release (NASDAQ: MSFT): Q3 GAAP EPS of $2.94 beats by $0.11.
  • Revenue of $61.9B (+17.1% Y/Y) beats by $1.01B.
  • Shares +5%.
  • Revenue in Productivity and Business Processes was $19.6 billion and increased 12% (up 11% in constant currency)
  • Revenue in Intelligent Cloud was $26.7 billion and increased 21%
  • Revenue in More Personal Computing was $15.6 billion and increased 17%
  • Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.
Categories
Cloud Service Providers

Alphabet Surges 12% on Strong Q1 Earnings: YouTube, Cloud, and Search Drive Growth

Alphabet stock surged by double digits — (NASDAQ: GOOG) +12%, — after its first-quarter earnings easily cleared analyst expectations as revenues jumped 15% with strong performance, particularly at YouTube.

Revenues rose to $80.54B, easily topping consensus for $78.7B. Advertising revenue rose 13% to $61.7B.

Meanwhile, YouTube ads revenue — previously an area of concern — rose a full 21% to $8.09B. Subscriptions, platforms, and devices revenue jumped 18%.

And the momentum in Cloud continued, with 28% revenue growth and operating income that more than quadrupled year-over-year.

Operating income jumped 46% year-over-year, to $25.47B. Earnings per share landed at $1.89 vs. $1.50 expected by Wall Street.

The operating margin also expanded, to 32% from a year-ago 25%.

“Our results in the first quarter reflect strong performance from Search, YouTube, and Cloud,” said CEO Sundar Pichai. “We are well underway with our Gemini era and there’s great momentum across the company.”

Revenues by segment: Google search and other, $46.16B (up 14.4%); YouTube ads, $8.09B (up 20.9%); Google Network, $7.41B (down 1.1%); Google subscriptions, platforms and devices, $8.74B (up 17.9%); Google Cloud, $9.57B (up 28.4%); Other Bets, $495M (up 71.9%).

Operating income by segment: Google Services, $27.9B (up 28.3%); Google Cloud, $900M (up 371%); Other Bets, -$1.02B (vs. year-ago -$1.23B); Alphabet-level activities, -$2.3B (vs. year-ago -$3.3B).

The company also authorized the buyback of up to an additional $70B worth of shares and declared a cash dividend of $0.20 per share.

Categories
AI

Palantir (PLTR) Surges 18% to $19.61 Post-Earnings: A Long-Term Buy Opportunity

source:paltnir

*Palantir – $19.61 Post Earning pop of 18%!*

*One can start nibbling at around $19.60 BUT spread out purchases on declines, there should be declines after this post earnings bump and since this is a long term story I still anticipate 15-16% of annual gains over the next 5 years.*

The Reasons for the post earnings pop.

I think the trend of rewarding profitability as in the case of Meta last week seems to be working for Palantir as well. 

Investors are seeing that Palantir is serious about cost control and better margins. With revenue growth in the low 20’s overall, with the main catalyst being commercial customers, Palantir is doing the right thing by focusing on profitability.

Consider these metrics for Q4, which indicate a lot of progress since the days when Palantir didn’t care about profitability….I guess the drop to $6.35 at its low changed their perspective quite a bit

Fourth consecutive quarter of GAAP operating profitability. 11% Margin.

Adjusted free cash flow of $305 million; 50% margin; 731Mn for the year.

Adjusted operating margin of 34%; 28% for the year.

Fifth consecutive quarter of expanding adjusted operating margins 

Fifth consecutive quarter of GAAP profitability; 15% margin

Commercial customer count grew at a very impressive rate of 55% – higher than the revenue of 32%, this is mostly normal for Palantir, they usually land and expand.

While the revenue guidance is just 1-2% higher than the previous estimate, there is  guidance for GAAP profits in each quarter, 40% commercial business growth and adjusted profit margins of 32+% and cash flow of 33% – that is very good.

The AIP (Artificial Intelligence Platform) seems to be getting a lot of attention.

I also suspect multiples and targets will also move up considerably, growth can accelerate from here.