Tag: General Motors Company (GM)

Insight Into Warren Buffett's Strategy: Unveiling His 40 Million General Motors (GM) Shares and the Investment Implications

Posted on by The INO.com Team

Berkshire Hathaway Inc. (BRK), led by fabled investor Warren Buffett, also fondly known as The Oracle of Omaha, owns 22 million General Motors Company (GM) shares, equating to a 1.6% stake in the legacy U.S. automaker.

A fundamentally robust company such as GM deserves its spot in a conglomerate's portfolio with a reputation for acquiring parts or the entirety of businesses that possess enduring competitive advantages and are likely to be aided by favorable economics in the long run.

On the back of a strong performance in the fiscal 2023 second quarter, the Detroit-headquartered auto giant has raised its guidance for 2023. The company raised its net income expectations for the fiscal from a high end of $9.9 billion to a high end of $10.7 billion. Its automotive division’s free cash flow is also expected to come between $7 billion and $9 billion, up from $5.5 billion to $7.5 billion.

In addition, GM said it is increasing cost-cutting measures through next year and now plans to cut $3 billion in expenditures compared with previous guidance of $2 billion. The financial outperformance driven by the booming traditional automotive business powered by highly profitable trucks and SUVs has enabled the company to ramp up its presence in the electric vehicle (EV) segment.

Consequently, GM reiterated that it would double EV production in the year's second half to 100,000 units. In addition to the long-awaited introduction of an electric Chevrolet Silverado pickup truck and EV versions of Chevy’s Equinox crossover and Blazer compact sport-utility vehicle, the company says it will reach 400,000 cumulative units of EV production by early 2024.

GM also anticipates that its EV business will reach profitability by 2025, with an EV production capacity of 1 million units in North America and EV revenue of roughly $50 billion.

In addition, the company is making itself future-ready by fixing supply-chain issues with measures such as a $60 million investment round in Mitra Chem, a California startup working on cheaper EV batteries. Mitra Chem aims to develop low-cost lithium iron phosphate batteries that can hold more power than current versions. If it’s successful, its batteries could appear in GM’s EVs later this decade.

GM is also developing its Ultium EV platform, which will help reduce costs and improve profitability. In addition, GM is diversifying to more potentially lucrative businesses such as Cruise, its driverless cab service, and BrightDrop, which is focused on helping businesses meet consumer demand for last-mile services.

All the above factors make GM an apparently solid bet in the automotive sector and a far cry from cash-strapped and debt-burdened EV upstarts that are struggling to keep themselves afloat amid increased borrowing cost due to sustained interest-rate hikes and EV price war that has been waged by Tesla, Inc. (TSLA).

The Flip Side

When asked about when to sell stocks, Buffett famously replied, “To break off relationships with people that I like and people that have joined me because they think it’s a permanent home, to do that simply because somebody waves a big check at me would be like selling one of my children.”

So when the legend, whose favorite holding period is forever, decides to cut his stake in GM, a business his company has owned since 2012, by almost half, it can only mean that either BRK is chronically short of funds and has been finding numerous opportunities to put them to better use or the economic characteristics of the business change in a big way.

Since BRK is sitting on a mountain of cash worth at least $147 billion, we can definitely count out the former possibility. As far as the latter is concerned, carmakers in the U.S. and Europe are once again under siege.

However, this time around, the war is on climate change, the goal is rapid decarbonization and energy transition, the battleground is smart, connected, and electric mobility solutions, and the invaders are from the other side of the Pacific, beyond the Sea of Japan.

Recently, after BYD Company Limited (BYDDY) delivered its five millionth electric vehicle, its founder Wang Chuanfu declared the “time has come for Chinese brands.” And he has good reason to be optimistic. Chinese automakers have access to its vast domestic market, abundant supplies of resources, such as rare earths, which are critical for energy transition, and a government keen on seeing its domestic brands compete globally.

China’s dominance in rare earth and other clean energy metals is back in the limelight after the recent export restriction on germanium and gallium. With the trade war between the U.S. and China intensifying amid restrictions on exports of semiconductor chips and investments in other cutting-edge technology by the former, the latter is expected to keep upping the ante.

This could hurt the prospects of Western car manufacturers as they might be compelled to deal with increased input costs on top of exchange-rate headwinds and credit crunch due to the Federal Reserve ratcheting up the benchmark borrowing cost to 5.25%-5.50% from nearly 0% in the space of 16 months. 

While carbon border tax and other protective measures could provide temporary shelter for besieged Western automakers, the beneficiaries stand to lose more if the Chinese government cuts off their access to the massive domestic market on which the Chinese automakers could always fall back upon encountering turbulence overseas.

Moreover, with Vietnamese EV-maker VinFast Auto Ltd. (VFS) surpassing the market capitalization of heavyweights, such as Ford Motor Company (F) and GM, in the words of VW chief Thomas Schaefer, “The roof is on fire,” and according to former Aston Martin chief executive Andy Palmer, manufacturers in Europe and the US face a “real and present danger” from the East.

Bottomline

GM, first added by BRK in 2012, now constitutes merely 0.2% of the conglomerate’s portfolio of marketable securities, which in turn is just a component of its holdings, which are comprised mainly of wholly owned businesses.

Therefore, instead of being denominator blind and jumping on the Buffett bandwagon, it could be wise for investors to hold their horses and verify if Western automakers can hold their own against Oriental challengers before making an investment decision.

High Stakes: Can Tesla (TSLA) and Netflix (NFLX) Surpass Earnings Expectations?

Posted on by The INO.com Team

Tesla, Inc. (TSLA), the undisputed leader in EVs, is scheduled to release its fiscal 2023 second-quarter results on July 19 after the closing bell. Analysts expect TSLA’s revenue to increase 45.7% year-over-year to $24.67 billion for the quarter that ended June 2023.
The consensus earnings per share (EPS) estimate of $0.82 for the about-to-be-reported quarter indicates an increase of 8.2% year-over-year. For the fiscal year ending December 2023, the EV maker’s revenue and EPS are expected to increase 24% and decrease 13.2% year-over-year to $100.98 billion and $3.53, respectively.

Streaming giant Netflix, Inc. (NFLX) is also set to report its second-quarter earnings after the market close on July 19, kicking off media earnings season. The company is expected to put light on its subscriber momentum, the progress of its cheaper advertising tier, and the impact of its password-sharing crackdown.

Analysts expect NFLX’s revenue for the fiscal second quarter (ended June 30, 2023) to increase 3.9% year-over-year to $8.26 billion. However, the consensus EPS estimate of $2.86 for the same quarter indicates a decline of 10.8% year-over-year.
In addition, the company’s revenue and EPS for fiscal year 2023 are expected to grow 7.7% and 13.5% year-over-year to $34.06 billion and $11.29, respectively.

Let’s analyze each stock and determine the chances of them surpassing analysts’ expectations:

TSLA designs, develops, manufactures, and sells electric vehicles (EVs) and energy generation and storage systems in the United States, China, and internationally. The company operates through two segments: Automotive; and Energy Generation and Storage.

TSLA recently released its second-quarter production and delivery numbers, easily beating estimates as the effects of the company’s price cuts, coupled with federal EV tax credits, boosted sales.

In April, the EV maker slashed prices of some of its Model Y and Model 3 EVs in the United States, the sixth time of lowering U.S. prices this year. TSLA’s Model Y “long range” and “performance” vehicles prices were cut by $3,000 each, and that of its Model 3 “rear-wheel drive” by $2,000 to $39,990.
Further, the Elon Musk-led company lowered prices in Europe, Israel, and Singapore along with Japan, Australia, and South Korea, expanding a discount drive it commenced in China in January to drive demand.

During the second quarter, TSLA produced approximately 480,000 vehicles and delivered nearly 466,000 vehicles. The delivery figures easily beat Wall Street consensus estimates of 448,599 units and the previous quarter’s total of 422,875. Both production and delivery figures for the second quarter were all-time records for the company.

Yet, TSLA, earlier in April, reported a 4% sequential increase in deliveries in the first quarter and a 17.8% sequential rise during the fourth quarter.
Furthermore, TSLA is rapidly expanding its Supercharger network with industry competitors. On July 7, German luxury giant Mercedes-Benz (MBG.DE) became the latest to join Tesla’s Supercharger network. Beginning in 2024, Mercedes-Benz electric vehicle owners would get access to 12,000 Tesla Superchargers across North America via the use of an adapter.

In 2025, new Mercedes EVs in North America would have TSLA’s North American Charging Standard (NACS) port built into the cars for access to the Supercharger network. This deal with Mercedes is similar to TSLA’s other charging partnerships with other automakers, Ford Motor Company (F), General Motors Company (GM), Rivian Automotive, Inc. (RIVN), and Volvo ADR (VLVLY).

On May 26, TSLA and F announced a surprise deal on electric vehicle charging technology and infrastructure. Under the agreement, Ford owners will get access to more than 12,000 Tesla Superchargers across the U.S. and Canada starting early next year.

In addition, GM followed crosstown rival F in partnering with TSLA to use its North American charging network and technologies. Under this deal, GM owners will get access to Tesla’s 12,000 fast chargers using an adapter and its EV charging app beginning the following year.
Signing on additional partners to TSLA’s charging network is expected to be a boon for the EV maker’s top line. According to Piper Sandler analyst Alexander Potter, charging deals from partners could add upward of $3 billion in revenue by 2030 and up to $5.40 billion by 2032.
The company’s first-quarter revenue of $23.33 billion was slightly below Wall Street estimates of $23.35 billion. It reported a gross margin of 19.3%, compared to 29.1% in the same period in 2022, as the cost of several price cuts hit its profitability.

Furthermore, TSLA’s net income was $2.51 billion for the first quarter, a decline of 24% year-over-year, and its EPS decreased 23% year-over-year to $0.73. TSLA’s CEO, Elon Musk, also indicated that the company would prefer higher volumes to higher margins.

Analysts continue to ring warning bells on the company’s profit margins. Gary Black, co-founder and managing partner of Future Fund expects TSLA’s adjusted EPS for the second quarter to be around $0.87, higher than the prior quarter’s $0.85 and the year-ago quarter’s $0.76. The consensus estimate stands at $0.82 per share.

However, Gary Black predicts the company’s gross margin to contract as it had offered discounts on its vehicles to boost sales.
Another stock that gears for second-quarter earnings this week is NFLX. The company offers entertainment services. It provides TV series, feature films, documentaries, and mobile games across various genres and languages.

In May, after ignoring password sharing for many years, the streaming company expanded its crackdown on password sharing across the United States and more than 100 other countries, alerting users that their accounts cannot be shared for free outside their households. It also stated that an additional fee of $7.99 per month would be charged for shared passwords in the United States.

Since the company told its users they could no longer share accounts across multiple households, daily U.S. sign-ups for the streaming service climbed by the most in at least four and a half years. According to data from the analytics platform Antenna, between May 25-28, Netflix witnessed the four single-largest days for signing up of U.S. customers since the firm began tracking this data in 2019.

During that time, NFLX saw nearly 100,000 daily sign-ups on two of the days, based on the report from Antenna.

Furthermore, the streaming giant’s ad-supported tier began to show signs of life six months following its debut. NFLX revealed that its ad-supported tier garnered five million active users globally, with sign-ups having more than doubled since early this year. The company stated that more than a quarter of new signups opt for the ad-supported plan in countries where it is offered.

During the first quarter of 2023 that ended March 31, NFLX reported mixed first-quarter results, missing Wall Street subscriber estimates while surpassing analysts’ EPS estimates. The company reported an EPS of $2.88 compared to the consensus estimate of $2.86. While its revenues increased 3.7% year-over-year to $8.16 billion, it missed the consensus estimate of $8.18.

For the first quarter, NFLX added 1.75 million streaming subscribers, which fell short of the analyst estimate of 2.06 million additions. However, its average paid memberships increased 4% year over year, while the paid net adds were 1.75 million for the quarter compared to a negative 0.2 million in the prior-year quarter. Also, its non-GAAP free cash flow rose 164% from the year-ago value to $2.12 billion.

In recent days and weeks, several analysts have raised their price targets on NFLX’s stock. One central theme across Wallstreet is an expectation of optimistic updates on the progress of the company’s password-sharing crackdown and advertising tier rollout.

TD Cowen analyst John Blackledge said, “Netflix’s paid sharing coupled with the ad tier rollout should drive long-term revenue upside, and the launch of paid sharing in the second quarter of 2023 along with the ramping ad tier should help drive membership and revenue growth in the second half of 2023.”
The TD Cowen analyst forecasts net subscriber growth of 2.37 million during the second quarter, compared with a consensus estimate of around 1.70 million, and “revenue re-acceleration” in the second half of 2023. John Blackledge reiterated his “outperform” rating and $500 stock price target.

Also, UBS analyst John Hodulik increased his stock price target from $390 to $525 while maintaining his Buy rating.

Hodulik stated, “We continue to believe paid sharing will drive 5 percent-plus uplift to revenue and see the roll-out as key to driving scale in advertising with the growth in the ad-tier mix and better targeting. Netflix eliminated its basic ad-free tier in Canada (and de-emphasized in the U.S.), which we estimate could provide a 10 percent uplift to average revenue per user over time and should help scale the ad base faster than prior expectations.”

The UBS analyst raised his estimates and predicted second-quarter financials would surpass management’s guidance, adding that he and his team “still expect accelerating second-half growth.” Hodulik expects 3.60 million net subscriber gains in the about-to-be-reported quarter and 6.50 million in the third quarter.

Bottom Line

EV giant TSLA’s better-than-expected delivery and production figures for the second quarter will likely boost the company’s second-quarter earnings. However, concerns still revolve around the impact on margins due to discounts Tesla offered on its new vehicles across different regions. But vehicle prices stabilized in the second quarter after substantial reductions announced earlier in the year.
While streaming company NFLX took a hit after reporting its first subscriber loss in a decade last year and mixed financials in the first quarter of 2023, there are higher chances of beating analysts’ estimates for the second quarter, with rising expectations of positive updates on the company’s progress on the password-sharing crackdown and advertising tier rollout.

Can Tesla (TSLA) and Netflix (NFLX) Surpass Earnings Expectations?

Posted on by The INO.com Team

Tesla, Inc. (TSLA) , the undisputed leader in EVs, is scheduled to release its fiscal 2023 second-quarter results on July 19 after the closing bell. Analysts expect TSLA’s revenue to increase 45.7% year-over-year to $24.67 billion for the quarter that ended June 2023.

The consensus earnings per share (EPS) estimate of $0.82 for the about-to-be-reported quarter indicates an increase of 8.2% year-over-year. For the fiscal year ending December 2023, the EV maker’s revenue and EPS are expected to increase 24% and decrease 13.2% year-over-year to $100.98 billion and $3.53, respectively.

Streaming giant Netflix, Inc. (NFLX) is also set to report its second-quarter earnings after the market close on July 19, kicking off media earnings season. The company is expected to put light on its subscriber momentum, the progress of its cheaper advertising tier, and the impact of its password-sharing crackdown.

Analysts expect NFLX’s revenue for the fiscal second quarter (ended June 30, 2023) to increase 3.9% year-over-year to $8.26 billion. However, the consensus EPS estimate of $2.86 for the same quarter indicates a decline of 10.8% year-over-year.

In addition, the company’s revenue and EPS for fiscal year 2023 are expected to grow 7.7% and 13.5% year-over-year to $34.06 billion and $11.29, respectively.

Let’s analyze each stock and determine the chances of them surpassing analysts’ expectations:

TSLA designs, develops, manufactures, and sells electric vehicles (EVs) and energy generation and storage systems in the United States, China, and internationally. The company operates through two segments: Automotive; and Energy Generation and Storage.

TSLA recently released its second-quarter production and delivery numbers, easily beating estimates as the effects of the company’s price cuts, coupled with federal EV tax credits, boosted sales.

In April, the EV maker slashed prices of some of its Model Y and Model 3 EVs in the United States, the sixth time of lowering U.S. prices this year. TSLA’s Model Y “long range” and “performance” vehicles prices were cut by $3,000 each, and that of its Model 3 “rear-wheel drive” by $2,000 to $39,990.

Further, the Elon Musk-led company lowered prices in Europe, Israel, and Singapore along with Japan, Australia, and South Korea, expanding a discount drive it commenced in China in January to drive demand.

During the second quarter, TSLA produced approximately 480,000 vehicles and delivered nearly 466,000 vehicles. The delivery figures easily beat Wall Street consensus estimates of 448,599 units and the previous quarter’s total of 422,875. Both production and delivery figures for the second quarter were all-time records for the company.

Yet, TSLA, earlier in April, reported a 4% sequential increase in deliveries in the first quarter and a 17.8% sequential rise during the fourth quarter.

Furthermore, TSLA is rapidly expanding its Supercharger network with industry competitors. On July 7, German luxury giant Mercedes-Benz (MBG.DE) became the latest to join Tesla’s Supercharger network.
Beginning in 2024, Mercedes-Benz electric vehicle owners would get access to 12,000 Tesla Superchargers across North America via the use of an adapter.

In 2025, new Mercedes EVs in North America would have TSLA’s North American Charging Standard (NACS) port built into the cars for access to the Supercharger network. This deal with Mercedes is similar to TSLA’s other charging partnerships with other automakers, Ford Motor Company (F), General Motors Company (GM), Rivian Automotive, Inc. (RIVN), and Volvo ADR (VLVLY).

On May 26, TSLA and F announced a surprise deal on electric vehicle charging technology and infrastructure. Under the agreement, Ford owners will get access to more than 12,000 Tesla Superchargers across the U.S. and Canada starting early next year.

In addition, GM followed crosstown rival F in partnering with TSLA to use its North American charging network and technologies. Under this deal, GM owners will get access to Tesla’s 12,000 fast chargers using an adapter and its EV charging app beginning the following year.

Signing on additional partners to TSLA’s charging network is expected to be a boon for the EV maker’s top line. According to Piper Sandler analyst Alexander Potter, charging deals from partners could add upward of $3 billion in revenue by 2030 and up to $5.40 billion by 2032.

The company’s first-quarter revenue of $23.33 billion was slightly below Wall Street estimates of $23.35 billion. It reported a gross margin of 19.3%, compared to 29.1% in the same period in 2022, as the cost of several price cuts hit its profitability.

Furthermore, TSLA’s net income was $2.51 billion for the first quarter, a decline of 24% year-over-year, and its EPS decreased 23% year-over-year to $0.73. TSLA’s CEO, Elon Musk, also indicated that the company would prefer higher volumes to higher margins.

Analysts continue to ring warning bells on the company’s profit margins. Gary Black, co-founder and managing partner of Future Fund expects TSLA’s adjusted EPS for the second quarter to be around $0.87, higher than the prior quarter’s $0.85 and the year-ago quarter’s $0.76. The consensus estimate stands at $0.82 per share.

However, Gary Black predicts the company’s gross margin to contract as it had offered discounts on its vehicles to boost sales.

Another stock that gears for second-quarter earnings this week is NFLX. The company offers entertainment services. It provides TV series, feature films, documentaries, and mobile games across various genres and languages.

In May, after ignoring password sharing for many years, the streaming company expanded its crackdown on password sharing across the United States and more than 100 other countries, alerting users that their accounts cannot be shared for free outside their households. It also stated that an additional fee of $7.99 per month would be charged for shared passwords in the United States.

Since the company told its users they could no longer share accounts across multiple households, daily U.S. sign-ups for the streaming service climbed by the most in at least four and a half years.According to data from the analytics platform Antenna, between May 25-28, Netflix witnessed the four single-largest days for signing up of U.S. customers since the firm began tracking this data in 2019.

During that time, NFLX saw nearly 100,000 daily sign-ups on two of the days, based on the report from Antenna.

Furthermore, the streaming giant’s ad-supported tier began to show signs of life six months following its debut. NFLX revealed that its ad-supported tier garnered five million active users globally, with sign-ups having more than doubled since early this year. The company stated that more than a quarter of new signups opt for the ad-supported plan in countries where it is offered.

During the first quarter of 2023 that ended March 31, NFLX reported mixed first-quarter results, missing Wall Street subscriber estimates while surpassing analysts’ EPS estimates. The company reported an EPS of $2.88 compared to the consensus estimate of $2.86. While its revenues increased 3.7% year-over-year to $8.16 billion, it missed the consensus estimate of $8.18.

For the first quarter, NFLX added 1.75 million streaming subscribers, which fell short of the analyst estimate of 2.06 million additions. However, its average paid memberships increased 4% year over year, while the paid net adds were 1.75 million for the quarter compared to a negative 0.2 million in the prior-year quarter. Also, its non-GAAP free cash flow rose 164% from the year-ago value to $2.12 billion.

In recent days and weeks, several analysts have raised their price targets on NFLX’s stock. One central theme across Wallstreet is an expectation of optimistic updates on the progress of the company’s password-sharing crackdown and advertising tier rollout.

TD Cowen analyst John Blackledge said, “Netflix’s paid sharing coupled with the ad tier rollout should drive long-term revenue upside, and the launch of paid sharing in the second quarter of 2023 along with the ramping ad tier should help drive membership and revenue growth in the second half of 2023.”

The TD Cowen analyst forecasts net subscriber growth of 2.37 million during the second quarter, compared with a consensus estimate of around 1.70 million, and “revenue re-acceleration” in the second half of 2023. John Blackledge reiterated his “outperform” rating and $500 stock price target.

Also, UBS analyst John Hodulik increased his stock price target from $390 to $525 while maintaining his Buy rating.

Hodulik stated, “We continue to believe paid sharing will drive 5 percent-plus uplift to revenue and see the roll-out as key to driving scale in advertising with the growth in the ad-tier mix and better targeting. Netflix eliminated its basic ad-free tier in Canada (and de-emphasized in the U.S.), which we estimate could provide a 10 percent uplift to average revenue per user over time and should help scale the ad base faster than prior expectations.”

The UBS analyst raised his estimates and predicted second-quarter financials would surpass management’s guidance, adding that he and his team “still expect accelerating second-half growth.” Hodulik expects 3.60 million net subscriber gains in the about-to-be-reported quarter and 6.50 million in the third quarter.

Bottom Line

EV giant TSLA’s better-than-expected delivery and production figures for the second quarter will likely boost the company’s second-quarter earnings. However, concerns still revolve around the impact on margins due to discounts Tesla offered on its new vehicles across different regions. But vehicle prices stabilized in the second quarter after substantial reductions announced earlier in the year.

While streaming company NFLX took a hit after reporting its first subscriber loss in a decade last year and mixed financials in the first quarter of 2023, there are higher chances of beating analysts’ estimates for the second quarter, with rising expectations of positive updates on the company’s progress on the password-sharing crackdown and advertising tier rollout.

4 Stocks Expected to Have the Fastest Growing Jobs in the Next 5 Years

Posted on by The INO.com Team

An apocryphal quote attributed to Charles Darwin observes that it is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.

Regardless of what the ideas and constructs that have shaped and perpetuated our civilization would want us to believe, there is hardly an aspect of our modern life that is immune to or exempted from the laws of nature. At least (and hopefully at most) metaphorically, we are either running for food or running from being food often without being able to tell the difference.

Consequently, in an era of ever-increasing automation, digitization, and decarbonization, individuals and institutions more prepared to accept and embrace change would thrive in the intraspecific struggle for economic existence at the expense of their more inertial peers.

According to the Future of Jobs Report 2023 by the World Economic Forum, in the next five years, almost a quarter of jobs (23%) are expected to change through growth of 10.2% and a decline of 12.3%. Employers anticipate 69 million new jobs to be created and 83 million eliminated, amounting to a net decrease of 14 million jobs, or 2% of current employment.

According to Moody’s Chief Economist, Mark Zandi, the macro trends driving the change present challenges, such as the displacement of the majority of the existing workforce while demanding significant adaptations from the talent that is being retained and disrupting business by lowering entry barriers and switching costs to creating a level playing field.

However, on the flip side, he also highlights the enormous opportunity for improvements in productivity and efficiency, which would be instrumental in ensuring economic growth while managing a general demographic decline.

With specialization, digitization, and sustainability driving demand for talent and reshaping the global world of work at an unprecedented rate, white-collar generic and repetitive jobs are being automated away. At the same time, businesses can’t find enough specialists to design and implement artificial intelligence-led automation and blue-collar workers to take care of work that is yet to be automated.

Consequently, autonomous and electric vehicle specialists top the list of fastest-growing jobs in 2023. Close behind, AI and machine learning specialists could see only slightly less job growth, followed by environmental protection professionals.

Among the non-technological roles, heavy truck and bus drivers, vocational education teachers, and mechanics and machinery repairers look set to see around 2 million new jobs each between 2023-2027.

At the other end of the spectrum, roles like bank tellers, cashiers, and data-entry clerks would be rendered obsolete and, hence, are set to witness the fastest rate of decline in the next five years.

In the context of this fundamental shift, the following businesses which have opted to disrupt themselves and their respective industries rather than being disrupted appear best placed to keep attracting talent in the foreseeable future.

NVIDIA Corporation (NVDA) recently made headlines when its stock got its moonshot due to the widespread public interest in AI. Post its earnings release on May 24; the Santa Clara-based graphics chip maker has stolen the thunder by becoming the first semiconductor company to hit a valuation of $1 trillion.
NVDA’s A100 chips, which are powering LLMs like ChatGPT, have become indispensable for Silicon Valley tech giants. To put things into context, the supercomputer behind OpenAI’s ChatGPT needed 10,000 of Nvidia’s famous chips. With each chip costing $10,000, a single algorithm that’s fast becoming ubiquitous is powered by semiconductors worth $100 million.

During a commencement speech on May 26 at National Taiwan University, NVDA CEO Jensen Huang’s message to his potential recruits was loud and clear, “You are at the beginning, at the starting line, of AI. Run. Don’t walk.”

Tesla, Inc. (TSLA)

The global e-mobility pioneer’s automotive segment includes the design, development, manufacturing, sales, and leasing of electric vehicles as well as sales of automotive regulatory credits.

In the recent earnings call, TSLA’s maverick CEO Elon Musk signaled that the automaker will target larger volumes of sales versus higher margins but said he expects the company “over time will be able to generate significant profit through autonomy.”

The company recently scored a major victory as an infrastructure provider by striking a deal with two of its rival automotive manufacturers, Ford Motor Company (F) and General Motors Company (GM) , to grant their vehicles access to more than 12,000 Tesla Superchargers across the U.S. and Canada starting early next year.

Moreover, since TSLA’s energy generation and storage segment includes the design, manufacture, installation, sales, and leasing of solar energy generation and energy storage products such as the Solar Roof and Powerwall, the stock could also be an energy transition play.

AGCO Corporation (AGCO) manufactures and distributes agricultural equipment and related replacement parts worldwide. The company provides telemetry-based fleet management tools, including remote monitoring and diagnostics, which help farmers improve uptime, machine and yield optimization, mixed fleet optimization, and decision support.

AGCO’s Precision Planting, Headsight, and Intelligent Ag Solutions brands provide retrofit solutions to upgrade farmers’ existing equipment to improve their planting, liquid application, and harvest operations.

On May 4, AGCO announced a capital improvement project, dubbed “Planter Accelerate,” scheduled to begin in the second quarter of this year and continue through the first quarter of 2024. The project aims to increase production capacities for Massey Ferguson and Fendt Momentum planters at its Kansas facilities in Beloit and Cawker City.

Canadian Solar Inc. (CSIQ) is a designer, developer, manufacturer, and seller of solar ingots, wafers, cells, modules, and other solar power and battery storage products internationally. The company, headquartered in Guelph, Ontario, operates through two segments: Canadian Solar Inc. (CSI) Solar and Global Energy.

On June 15, marking its first foray in the United States, CSIQ announced establishing a solar PV module production facility in Mesquite, Texas, with an annual output of 5 GW, equivalent to approximately 20,000 high-power modules per day. This follows the company’s successful track record of production in Canada, China, Brazil, Thailand, and Vietnam.

The new facility, expected to commence production around the end of 2023, represents an investment of over $250 million and will create approximately 1,500 skilled jobs once fully ramped up.

3 Top Auto Stocks For 2023

Posted on by The MarketClub Team

Last year, the automotive industry’s growth was hampered by macroeconomic challenges, including rising interest rates, material inflation, and continued supply chain issues.

Industry estimates of new vehicles sold in the united states in 2022 range from 13.7 million to 13.9 million, representing a decline of roughly 8% to 9% from the 2021 level and the lowest level since 2011.

However, auto industry executives are cautiously optimistic about a rebound in new vehicle sales in 2023. Toyota Motor Corp (TM) expects U.S. auto sales to grow 9% from the previous year to about 15 million this year. Also, S&P Global Mobility and Edmunds project new vehicle sales to be 14.8 million, while Cox Automotive’s preliminary forecast is around 14.1 million.

Moreover, consumer spending remained strong in the first month of 2023. The Commerce Department reported last Wednesday that retail sales grew by 3% in January, exceeding the estimate of a 1.9% increase. A significant jump in auto sales primarily drove the gain in retail sales.

Furthermore, sustained demand for electric vehicles (EVs) should boost the auto industry’s growth. U.S. EV sales leaped by two-thirds over the past year. According to year-end figures released by market research firm Motor Intelligence, automakers sold approximately 807,180 fully electric vehicles (EVs) in the United States in 2022, up 3.2% year-over-year.

What do you expect the electric vehicles market share in the United States to be by 2030?

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Based on a report by Contrive Datum Insights Pvt Ltd, the global electric vehicle market is projected to reach over $1.10 trillion by 2030, growing at a CAGR of 23.1%.

Given the promising prospects, it could be wise to take advantage of the uptrend in auto stocks General Motors Company (GM), Stellantis N.V. (STLA), and Honda Motor Co., Ltd. (HMC) for outsized returns this year. Continue reading "3 Top Auto Stocks For 2023" →