Tesla Model Y gets the gold medal

Hey Superheroes,

Spotlight is dropping in a day early due to the long weekend. And with markets being so eventful this week,  we didn’t want you to miss out!

The S&P 500 has been continuously resetting its record high this week with the ASX 200 getting close to its all-time high.   

Here are the week’s top stories.

Tesla sold more cars than ever last quarter with Tesla Model Y making it to #1

Tesla claims that its Model Y is now the best-selling vehicle in the world after delivering over 1.2 million units last year. It also sold 35% more cars in 2023 than it did in 2022.

📏 Tesla misses analyst expectations

However, it looks like all the price cuts on Tesla vehicles last year have cut into Tesla’s bottom line. The EV manufacturer missed quarterly revenue expectations by 2.3% and earnings by 3.5%.

The unfortunate news came despite Tesla selling 13% more cars in Q4 2023 than in Q4 2022. It only grew revenue by 3% over the same period. 

Tesla attributes the lacklustre performance to the series of price cuts it made last year, which lowered gross margins by around 6%. The company also saw operating expenses increase by 27% year-on-year and recorded the highest capital expenditures and R&D expenses it’s ever had in its history. 

It claims that the higher spend is due to its focus on future growth projects – as proven by its recent release of a new beta version of its Full Self-Driving (FSD) feature. It now uses AI to “influence vehicle controls.” Interesting.

Zip Co zips back to profitability

Zip shares have surged over 23% in the last week following its announcement that it would record semi-annual profitability again for the first time since 2021. 

In a pre-market update this week, the BNPL company announced that its first-half group cash earnings would land between $29 and $33 million when it releases its results next month.

💰 Lots of green

Zip’s latest quarterly report showed increased performance compared to its previous quarter.

Total group revenue grew by 28% and transaction volume also rose by 9%. Its level of bad debts in the U.S. was about 1.3% of total transaction volume, well below its target range of between 1.5% and 2.0%.

Analysts however did note that the strong performance was driven by strong seasonal spending. Do you think Zip’s profitability will continue?

🔦  Some other things we’re shining the Spotlight on:

• SOME MAGNIFICENT HIGHS: Three of the Magnificent Seven stocks have hit new record-highs this week. Meta touched $396, NVIDIA briefly hit $628 and Microsoft traded around $402.
• NETFLIX DID NOT CHILL: Netflix saw its share price surge 11% despite quarterly EPS missing analyst expectations. It looks like investors were impressed by its 13 million subscriber growth and 12.5% YoY revenue growth. Perhaps the password sharing crackdowns were effective after all.
• PILBARA KEEPS THE CASH: Pilbara Minerals cancelled expectations of an interim dividend this week, citing lower lithium prices and the need to conserve its liquidity. The biggest pure-play lithium miner saw revenues down by 46% year-on-year last quarter.

Next week is set to be even more eventful with five of the Magnificent Seven (Microsoft, Alphabet, Apple, Amazon and Meta) all scheduled to release quarterly earnings. Additionally, the Fed will be releasing its next interest rate decision on Wednesday. 

That’s all for this week’s Spotlight!