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Tesla Under Pressure
Shares in Tesla plunged yesterday as traders reacted to a mixed set of Q2 results and delay of the group’s Robotaxi launch. Revenues were seen higher over the quarter at $25.05 billion vs $24.63 billion expected. However, earnings came in below estimates at $0.52 per share vs $0.60 expected. While Musk’s guidance was generally positive, saying the company remains on track to debut new EV vehicles next year, it did announce the delay of its Robotaxi launch from August to October which Musk said would give Tesla time to add some extra details to the product before launching.
AI Spending Fears
In terms of the decline in profits over Q2, rising costs linked to employee layoffs and increased AI spending were seen as the key drag for Tesla. Overall, operating expenses jumped 39% over the quarter, a number which has spooked investors. After weaker numbers out of Alphabet too, investors are losing a little faith in AI investments here adding to the broader weakness we’ve seen across tech stocks this week.
Bullish Outlook Remains
Despite the drop in Tesla shares, many players remain bullish on Tesla long term. Indeed, Musk himself said that the Robotaxi launch will be a significant milestone for Tesla and could see its value soar as high as $5 trillion in coming years.
Technical Views
Tesla
The recovery rally in Tesla has stalled for now ahead of the 276.74 level with the market since reversing sharply lower. Price is now testing the 207.71 support and retesting the broken bear trend line. This is a key area for bulls to defend which opens the way for a test of 170.22 next, if broken.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.