Tesla, Netflix, Lucid, and Chip Makers: Stock Market Weekly Digest (16-20 October)
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As reported by CNBC, the US Department of Commerce announced on Tuesday 17 October, that it planned to curb the sale of some AI chips to China, including NVIDIA’s A800 and H800.
NVIDIA Corporation (NASDAQ: NVDA) stock decreased 8.66% from Tuesday to Thursday, dropping to 421.01 USD. During these days, other semiconductor stocks also declined, with Marvell Technology Inc. (NASDAQ: MRVL) falling by 5.53% down to 50.69 USD, Advanced Micro Devices Inc. (NASDAQ: AMD) plunging by 3.81% down to 102.40 USD, and Intel Corporation (NASDAQ: INTC) sinking 2.43% to 35.67 USD.
According to US Commerce Secretary Gina Raimondo, the restrictions aim to prevent Chinese access to advanced semiconductors that could fuel breakthroughs in artificial intelligence, especially for military purposes. The politician also noted that these measures are not hurting Chinese economic growth.
US electric car manufacturer Lucid Group Inc. released its Q3 production and delivery figures on Tuesday. From July to September, the company produced 1,550 electric vehicles and shipped over 700 additional vehicles to a facility in Saudi Arabia for final assembly. Notably, in Q3 2022, the total electric vehicle production was 2,282 units, while in Q2 2023, the number was 2,173.
According to Lucid Group Inc.’s press release, the corporation delivered 1,457 Air cars from July to September 2023, marking an increase of 59 and 53 vehicles compared to the same period in 2022 and the previous quarter, respectively. Analysts had expected quarterly figures to reach 2,000 vehicles.
Following the news, Lucid Group Inc. (NASDAQ: LCID) shares declined by 5.30% on 17 October, reaching 5.00 USD per share, and dropped by 9.40% on 18 October, down to 4.53 USD. On 19 October, there was an additional decrease of 4.19%, with the share price sinking to 4.34 USD. The company’s share value may also have been negatively impacted by the stock drop of the most prominent representative of this sector, Tesla Inc.
US electric vehicle manufacturer Tesla Inc. (NASDAQ: TSLA) published its Q3 2023 report on Wednesday 18 October. On that day, the presented data triggered a 4.78% decline in the stock value, sending it down to 242.68 USD per unit. At the close of the next trading session, the quotes had tumbled by another 9.30% to 220.11 USD. As a result, the stock lost nearly 14% from Wednesday to Thursday.
Tesla Inc.’s revenue for July to September 2023 increased by 8.84% from the corresponding period of the last year, reaching 23.35 billion USD. Net profit plummeted 43.71%, down to 1.85 billion USD or 0.53 USD per share.
Tesla Inc. produced 430,488 electric vehicles in Q3, ramping up production by 17.64%. Electric vehicle deliveries added 26.53%, reaching 435,059 cars, with Model 3 and Model Y having the largest share in the production and deliveries.
Elon Musk warned that Cybertruck would not generate significant positive cash flow for Tesla Inc. within 12-18 months from the start of production. He also emphasised that the corporation currently focuses on reducing product costs considerably.
US company Netflix Inc., which owns the self-titled streaming service, announced its Q3 2023 results on Wednesday. The following day, Netflix Inc. (NASDAQ: NFLX) shares climbed 16.05% in response to the quarterly earnings report and forecast, reaching 401.77 USD per unit.
Revenue for July to September increased by 7.77% to 8.54 billion USD, and net profit rose 19.96% to 1.68 billion USD or 3.73 USD per share. Experts surveyed by FactSet estimated quarterly revenue at an average of 8.54 billion USD and EPS at 3.49 USD.
The number of paid subscribers to the streaming service rose by 8.76 million, surpassing the consensus forecast of approximately 5.9 million. In addition, Netflix Inc. raised prices for its US plans: The monthly basic subscription now costs 11.99 USD, up from 9.99 USD, and the premium subscription has been raised from 19.99 to 22.99 USD. However, the prices for Netflix’s ad-supported subscription (6.99 USD) and standard tier (15.49 USD) remain unchanged.
The company anticipates revenue for Q4 2023 will reach 8.69 billion USD, with an expected EPS of 2.15 USD. Experts forecast revenue and EPS of 8.8 billion USD and 2.16 USD, respectively.
Export restrictions of the US Department of Commerce affected US semiconductor stocks, including NVIDIA Corporation, Marvell Technology Inc., Advanced Micro Devices Inc., and Intel Corporation.
Lucid Group Inc. shares saw a rapid drop in shares in response to Q3 2023 production and delivery figures, while Tesla Inc.’s stock lost 14% following the release of the July to September 2023 report.
Netflix Inc.’s shares showed a steady upward movement, rising by 16% following the release of the quarterly earnings report.