• TSLA book record profits in Q1, blowing past the market's expectations.
  • Tesla has previously announced delivery numbers slightly behind estimates.
  • The Shanghai factory closure is the main worry for investors as Netflix spooks tech traders.

Update: Tesla (TSLA) reported its Q1 earnings after the NY close, blowing away Wall Street's forecast. The EV leader posted record profits once again. The company earned adjusted income of $3.7 billion, 30% higher than the previous record of $2.9 billion it posted in the fourth quarter of last year. Revenue of $18.8 billion also bettered estimate while rising 6% from the previous quarter's sales.

Following the earnings report, CEO Elon Mush said in an investor call, “Tesla Shanghai ... is coming back with a vengeance. So I think notwithstanding new issues that arise, I think we will see record output per week from [Tesla's factory in] Shanghai this quarter, albeit we are missing a couple of weeks." 

Tesla (TSLA) is next up on the slate of mega tech earnings after the close on Wednesday, and it will be closely watched as the stock market grows increasingly nervous after Netflix earnings on Tuesday evening. The streaming giant collapsed 25% in afterhours in a move reminiscent of Facebook's last report. Or in fact, the move is reminiscent of Netflix itself as this is the second earnings release in a row where the stock has cratered over 20% on an earnings release. TSLA stock itself was hit on its previous earnings, losing 11% back on January 26.

Tesla Stock News: Earnings are all that matters

Really earnings will be the main driver of the stock price, not Elon Musk or his Twitter (TWTR) takeover campaign. Deliveries will be key, and so too will outlook. Increasing reports are circulating about logistics supply chains coming into disruption following multiple lockdowns in Shanghai. The number of ships stuck in or around Shanghai's port has rocketed to gridlock levels. Tesla, along with many other companies, was forced to shut down production in Shanghai.

Tesla announced Q1 deliveries of 310,000 in early April. This was a record number but fell short of analyst estimates, which were set at closer to 320,000. However, in the wake of that slight miss, we do not notice any analyst figures being lowered, so we are left with the assumption that the analyst estimates are too high. Added to that is the situation in Shanghai, meaning we just cannot see how Tesla is going to beat delivery numbers. Even noted Tesla bull Dan Ives of Wedbush outlines some concerns in a note to clients on Tuesday. 

“The main question for tomorrow is just how bad the China production issues are and what that means for deliveries in 2Q and the rest of the year,” Ives wrote. “Musk & Co. are in a tough spot, as there are so many variables around 2Q China production that will certainly weigh on guidance for the rest of the year and thus there has been a clear overhang on the stock over the past month.”

Tesla Stock Forecast: $1,152 key resistance

We have previously identified the downtrend that Tesla is in based on the medium to longer term time horizon. A series of lower highs with the latest one being at $1,152 is the main feature. This is our pivot, and we remain bearish below it. The extended target is the most recent low at $700. Good earnings, even those that are broadly in line, with a reasonable outlook should see Tesla spike higher in a relief rally. Positioning is slightly skewed to the downside, including this author who is short the stock. Demand remains strong for all EVs and Tesla, but this is a supply issue. If Tesla can somehow overcome that then the stock can rally, but we feel it will not overcome that challenge until Q3 this year. First support is $945 and then $893 from the 200-day moving average. 

 

TSLA stock chart, daily

The author is short Tesla

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD climbs above 1.0600 amid renewed dollar weakness

EUR/USD climbs above 1.0600 amid renewed dollar weakness

EUR/USD has gathered bullish momentum and advanced beyond 1.0600 during the American trading hours on Monday. Following the mixed data releases, the US Dollar Index extended its slide below 104.00 and fueled the pair's rally in the second half of the day.

EUR/USD News

GBP/USD reverses direction, reclaims 1.2300

GBP/USD reverses direction, reclaims 1.2300

Following a dip below 1.2250 earlier in the day, GBP/USD reversed its course and reclaimed 1.2300. The broad-based selling pressure surrounding the greenback helps the pair push higher in the American session as investors assess the latest data releases.

GBP/USD News

Gold bears gearing up for a breakout

Gold bears gearing up for a breakout

XAUUSD is slowly gaining bearish traction, with sellers now aligned at lower levels. Gold advanced throughout the first half of the day, but trimmed gains and trades near a daily low of $1,820.63, as the dollar gathered momentum ahead of the US opening. 

Gold News

Everything you need to know about Shiba Inu’s Ryoshi Vision rewards before June 29

Everything you need to know about Shiba Inu’s Ryoshi Vision rewards before June 29

ShibaSwap, the native decentralized exchange of the Shiba Inu coin project, announced the distribution of Ryoshi Vision rewards within the next 48 to72 hours from June 26, 2022.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures