Why Tesla and Netflix are disappointing investors

28 July 202310 months ago babelfish

Falling prices of behemoths like Tesla and Netflix cast ominous shadows on all optimistic valuations on the technology sector. The analysis of the BG Saxo Study Centre

Prior to Wednesday's reports, Tesla and Netflix were up 136% and 62%, respectively, year-to-date. Investors saw their performance retrace 9-10% last Thursday.

INVESTORS FAIL TESLA

Tesla's Q2 results put a setback on revenue and EPS forecasts. Investors didn't like the cut to its bottom earnings margin of 18.2%, with the company warning there could be more drag on earnings due to lower EV prices. In addition to this, more resources are expected to be spent on the Cybertruck and AI super-computer .

NETFLIX DISAPPOINTMENT

Netflix celebrated the explosion in its subscriber numbers due to the new crackdown on password sharing, however revenue and guidance were disappointing, with Q3 performance of $8.5 billion versus $8.7 billion expected. It is unlikely that with these results there will be a bullish continuation of the stock.

The tech sector has been largely in the spotlight to date, with a price rally fueled by hopes about lower inflation, new AI products and rate cuts. The drop in prices of giants such as Tesla and Netflix casts menacing shadows on all the optimistic assessments made to date and further raises the stakes on those companies such as Microsoft, Meta and Alphabet that have yet to publish their quarterly reports. The question is a must: is the time of technology over?

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tesla-netflix-cosa-succede/ on Fri, 28 Jul 2023 09:45:43 +0000.