Tesla & Nvidia Rise Amid Upbeat Forecasts
The first trading session of July was marked by a 0.66% jump in the fortunes of the tech-heavy Nasdaq (US-TECH 100), with the charge led by two key players in their respective industries. Let’s take a look at how Wall Street traders pushed the share prices of Tesla and Nvidia up yesterday and the possible reasons why:
Tesla’s Week-Beginning Boost
Over the course of the trading day on July 1st, Tesla (TSLA) shares moved upwards by 6.2%. According to savvy market analysts, the proximate factor may have been the expected reporting of the electric vehicle (EV) firm’s second-quarter delivery numbers the following day.
Although some foresee this key business metric coming in below consensus estimates due to the slowdown in demand seen so far this year, Tesla's Q2 energy storage performance could be a particular source of interest.
As of July 1st, the consensus forecast for global second-quarter Tesla deliveries was 436,000 vehicles, a decrease of 12,000 from the figure put forward in May 2024. This revised estimate is a 6.5% decrease from last year's 466,140 deliveries but a 13% increase from Q1. In Q4 2023, Tesla achieved a record 484,507 deliveries, but Q1 2024 saw only 386,810, the lowest since Q2 2022's 344,000.
Furthermore, many market experts expect Q2 deliveries to fall short of 436,000, with some estimates even ranging to 410,000.
Alongside vehicle deliveries, Tesla will report Q2 energy storage deployment on July 2nd. In Q1, the company deployed 4,053 megawatt-hours (MWh), a record high. Tesla offers solar panels, solar roofs, and power walls for energy storage, and on the commercial side, the "megapack." Some suggest that Tesla's energy business could benefit significantly from the increased energy demand driven by generative AI, potentially providing a crucial boost to the firm's revenues.
CEO Elon Musk indicated during Tesla's June 13 shareholder meeting that the company is aiming for 200%-300% year-over-year growth in energy storage and stationary pack deployment.
Looking ahead, traders may wish to focus on the second half of 2024, anticipating demand recovery, vehicle price stabilisation, and the upcoming "robotaxi" reveal on August 8, which will be accompanied by the company's Q2 earnings release. Despite the aforementioned forecasts for a drop in deliveries in Q2 2024, it seems that traders have not yet shifted their market sentiment towards Tesla in a more pessimistic direction, as exemplified by yesterday's share price bump.
Nvidia Retains Place
Hardware industry leader Nvidia (NVDA) also saw a modest stock price boost on July 1st, marking a nearly 0.6% rise by the ring of the closing bell.
One reason for yesterday's boost could have been sales channel checks that indicated strong demand for the company's current data-centre processors, an indicator that even led venerable financial institution Morgan Stanley (MS) to raise their rating of Nvidia shares.
Furthermore, consensus estimates for Nvidia's current-quarter earnings have been on an uptrend after checks in Taiwan and China showed ongoing high demand for Nvidia's Hopper series products. However, caution among some investors about the forthcoming transition to the next-generation Blackwell series products has been noted.
Some say that the demand and visibility for the Hopper series are declining as its cycle comes to an end, and that the transition to the Blackwell series could prove challenging for Nvidia.
All in all, Nvidia remains a leading player in the AI semiconductor space. With interest in this ever-developing sphere seeming to only increase in recent times, whether market shifts will end up making a dent in Nvidia's 150% share price rise so far this year remains to be seen. (Source: Investors)
Conclusion
To sum it all up, Tesla's and Nvidia's positive trading results on July 1st seem to have been driven by expectations of upcoming delivery reports and robust demand for current products, highlighting the market's optimistic outlook for these tech giants. Whether this trend will be maintained, and for how long, is as yet unknown.
