- 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.
Recommended content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.