🪫 Tesla Misses Earnings

In partnership with

It’s Wednesday!

It’s been an extremely busy week with tons of news.

But first - I want to personally thank all of you for helping my newsletter cross 10,000 subscribers!

This is a tremendous milestone on my journey to building the best investing newsletter in the world, and it wouldn't have been possible without you.

Your consistent support makes all the hard work that goes into each issue more than worth it.

Some key data bites you should know: 

• Chipotle $CMG has increased its prices six times since 2021.

• Tesla $TSLA is recalling nearly 3,900 Cybertrucks.

• American Express $AXP saw Q1 profit increase +34% YoY.

• China has been buying Gold for 17 consecutive months.

• Donald Trump will receive $1.25B worth of Trump Media $DJT in earnout bonus.

• The U.S. Senate approved a bill to send $95B of aid to Ukraine, Israel, and Taiwan.

• Apple’s $AAPL iPhone sales in China declined 19% in Q1 2024.

In today’s newsletter:

• 🪫 Tesla Misses Earnings

• 💳 Consumer Spending Boosts Visa

• 🇳🇴 Norway’s $1.6T Wealth Fund

Let’s dive right in!

Elon got Tesla investors excited last night.

The company surged 12% in after hours following the release of its Q1 FY24 earnings.

Here’s a rundown of the key figures:

• Earnings: $0.45 (-47% YoY, vs. $0.51 Est. from LSEG)

• Revenue: $21.30B (-9% YoY, vs. $22.15B Est. from LSEG)

Automotive revenues fell 13% YoY to $17.4B, and operating margins halved from 11.4% to 5.5%.

The company ramped up capital expenditures by 34% to $2.8B, while free cash flow dropped to -$2.5B, impacted by increases in inventory and AI infrastructure investments.

The downturn in revenue and profitability can be traced back to lower average vehicle selling prices, a decrease in vehicle deliveries, and the costs associated with ramping up Cybertruck production.

So why did the stock jump after hours? It all comes down to the outlook.

In 2024, Tesla expects the growth rates of energy storage deployments and revenue from its Energy Generation and Storage business to exceed the Automotive business.

And perhaps the most important reason - the company plans to launch new, more affordable models ahead of the previously scheduled second half of 2025.

These vehicles will be produced using the same manufacturing lines as current models, maximizing the current capacity of approximately 3M vehicles.

Consumers are still spending like there’s no tomorrow.

Despite sticky inflation, Visa outpaced earnings estimates thanks to robust travel and spending patterns in its Q2 FY 2024 earnings.

Here’s a rundown of the key figures:

• Earnings: $2.51 (+20% YoY, vs. $2.44 Est. from FactSet)

• Net Revenue: $8.78B (+10% YoY, $8.62B Est. from FactSet)

As we see, the company reported strong double-digit growth in earnings alongside a 10% rise in net revenue, with all business segments experiencing growth.

This performance was driven by a 16% increase in total cross-border volume, an 8% increase in payments volume, and an 11% increase in processed transactions, compared to last year.

The company also generated $4.3B in free cash flow and returned $3.8B to shareholders through share repurchases and dividends.

And perhaps most importantly, Visa reaffirmed its 2024 expectations for low double-digit net revenue growth and low teens growth in earnings per share, demonstrating its ability to navigate the current macro environment.

The world’s largest sovereign wealth fund just got bigger.

Norway’s wealth fund recently reported a staggering first-quarter profit of $110B, thanks to its investment in technology stocks.

During Q1, equity investments increased by 9.1%, whereas its fixed income and real estate investments saw declines of 0.4% and 0.5%, respectively.

The fund’s investments in renewable energy fell -11.4%, but this component makes up just 0.1% of the total fund.

For those of you that don’t know, Norway created its sovereign wealth fund in 1990 to protect the economy from the cyclical nature of its oil revenue.

It functions both as a financial buffer and a savings plan for current and future generations of Norwegians.

The fund is invested in nearly 9,000 companies across 72 countries.

📚 Recommended Reading

Want to catch up on the markets daily for free in under 5 minutes?

Check out The One Read.

They provide market highlights, important news, and economic analysis in an easy to read, simplified format.

Don’t waste time filtering through all the stories in the financial world, sign up now and receive their update everyday after close!

Notable Companies Reporting Earnings Next Week:

• Monday (4/22):

  • SAP $SAP, Verizon $VZ, Cadence Design Systems $CDNS, Truist Financial $TFC

• Tuesday (4/23):

  • Tesla $TSLA, Visa $V, Pepsico $PEP, GE Aerospace $GE, Danaher $DHR, Texas Instruments $TXN, Philip Morris $PM, UPS $UPS, Lockheed Martin $LMT, Spotify $SPOT, General Motors $GM

• Wednesday (4/24):

  • Meta Platforms $META, Thermo Fisher $TMO, IBM $IBM, ServiceNow $NOW, Lam Research $LRCX, AT&T $T, Boeing $BA, Waste Management $WM, Chipotle Mexican Grill $CMG, Ford $F 

• Thursday (4/25):

  • Microsoft $MSFT, Alphabet $GOOG, Merck & Co $MRK, Astrazeneca $AZN, T-Mobile $TMUS, Caterpillar $CAT, Intel $INTC, Altria $MO, Snap $SNAP

• Friday (4/26):

  • Exxon Mobil $XOM, Chevron $CVX, AbbVie $ABBV, Colgate-Palmolive $CL, Phillips 66 $PSX, AON $AON

All of the companies that are reporting earnings next week can be viewed here.

📣 A Message From Our Sponsor

Two Forbes 30U30 Founders Transforming Mental Wellness

People scroll on their smartphones, they get depressed. Today, 25% of American adults are suffering from a diagnosable mental health condition.

After seeing their mother struggle with depression, Lee brothers, Forbes 30U30 winners, founded Aura, already with over 8 million users and 100K+ paying subscribers.

Aura quickly received investments from Silicon Valley’s legendary VCs as well as executives from Spotify, Youtube, Facebook, and Apple. And they’re just getting started.

For [x] more days, you can invest in Aura alongside 2000+ investors and back the future of mental wellness.

Only a few days left to invest.

Buys

• Biohaven ($BHVN)

  • Insider: John Childs (Director)

    • # of Shares Purchased: 195,121

    • $ Amount: $7,999,961

    • SEC Forms: [1]

  • Insider: Vlad Coric (CEO)

    • # of Shares Purchased: 121,951

    • $ Amount: $4,999,991

    • SEC Forms: [1]

  • Insider: Gregory Bailey (Director)

    • # of Shares Purchased: 48,780

    • $ Amount: $1,999,980

    • SEC Forms: [1]

Sells

• Abercrombie & Fitch Co. ($ANF)

  • Insider: Fran Horowitz (CEO)

    • # of Shares Sold: 400,000

    • $ Amount: $44,244,000

    • SEC Forms: [1]

• DoorDash ($DASH)

  • Insider: Tony Xu (CEO)

    • # of Shares Sold: 132,300

    • $ Amount: $17,663,909

    • SEC Forms: [1]

• e.l.f. Beauty ($ELF)

  • Insider: Tarang Amin (CEO)

    • # of Shares Sold: 74,451

    • $ Amount: $12,388,646

    • SEC Forms: [1]

• Coinbase ($COIN)

  • Insider: Brian Armstrong (Chairman and CEO)

    • # of Shares Sold: 23,075

    • $ Amount: $5,497,933

    • SEC Forms: [1]

🤝 Review of the Week