Tesla’s Stock Rebounds as Earnings Approach and Chip Developments Unfold
Tesla (TSLA) stock experienced a surge in early trading, positioning it for a weekly gain that breaks an eight-week losing streak. This uptick in performance comes ahead of the company’s earnings announcement scheduled for April 22.
In a notable development reported by Reuters late Thursday, Tesla is actively recruiting chip engineers in Taiwan, home to TSMC, one of the largest semiconductor manufacturers globally. This news aligns with growing optimism regarding Tesla’s chip supply strategy, fuelled by CEO Elon Musk’s announcement that the company has successfully completed the final stage of design for its next-generation AI5 chip. This chip is intended for future electric vehicles, extensive training clusters, and Tesla’s Optimus robots.
Tesla has ambitious plans to produce its own chips at a new facility dubbed the "Terafab." Analysts have pointed out that this initiative represents a significant engineering challenge, but it indicates Tesla’s commitment to securing its component supply chain. While this facet of Tesla’s operations is more long-term, it coincides with an anticipated earnings report that could reveal important insights into the company’s current state.
Tesla’s analysts foresee a revenue of approximately $22.7 billion for the first quarter, a decrease of 8.5% year-on-year, with earnings per share predicted at $0.39. The expected adjusted EBITDA is around $3.277 billion, reflecting a 14.4% drop compared to the same period last year. In terms of vehicle deliveries, Tesla reported 358,023 units delivered globally in Q1, slightly below the anticipated figure of 364,645 but still representing a 6.3% year-on-year increase. The comparatively modest results from the previous year can be attributed to a transition period for the Model Y, leading to lower earlier numbers.
The upcoming earnings call is expected to shed light on Tesla’s full self-driving (FSD) capabilities and its robotaxi service, which has been evolving at a slower pace than anticipated. Morgan Stanley predicts Tesla will soon exceed 10 billion miles driven using FSD, representing a significant milestone that may unlock new advancements for the company, empowered by extensive data accumulation.
Future plans for Tesla’s robotaxi services will also be discussed, although expansion to new markets has been sluggish. Currently, services are solely operational in Austin, Texas, and the San Francisco Bay Area, where vehicles typically include safety drivers.
As the financial landscape shifts, Tesla continues to forge ahead with innovative technological advancements while navigating the challenges of the global semiconductor landscape. Stay tuned for forthcoming updates on their earnings and strategic directions.
