Forget tariffs. It's all about earnings this week on Wall Street
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Yahoo
a minute ago
- Yahoo
Better EV Stock: Alphabet vs. Tesla (Hint: Robotaxis Are the Key)
Key Points The future of the auto industry lies in electric vehicles and ridesharing in autonomous vehicles. After many years in service, Waymo still can't point to a timeline of profitability. Tesla also faces challenges with its robotaxi offering, but it's well positioned, provided it can demonstrate safety and efficacy. These 10 stocks could mint the next wave of millionaires › Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) isn't, strictly speaking, an electric vehicle (EV) company. However, its autonomous driving technology company, Waymo, is committed to only using EVs in its fleet. Funnily enough, it could be argued that Tesla (NASDAQ: TSLA) isn't really a pure EV company either. After all, most of its sky–high valuation is attributable to the potential of its robotaxis. However, the comparison of these two as EV companies is valid because the future of the auto industry is EVs, and ridesharing in autonomous vehicles will be a larger part of the industry in the future. But which company is better placed, and which is the better stock? Alphabet vs. Tesla It's entirely possible that Alphabet could decide to spin off Waymo, not least because it reportedly could be valued at more than $45 billion. Meanwhile, one of Tesla's biggest supporters, Cathie Wood's Ark Invest, ascribes 88% of Tesla's enterprise value (market cap plus net debt) to robotaxis in its investment case for the stock, producing an expected value of $2,600 for the stock in 2029. As I have previously discussed, the Ark targets should be taken with a pinch of salt, as its track record on Tesla hasn't been good. However, Ark's core argument is sound and points to Tesla being potentially a far more valuable stock than Waymo ever will be. Pathways to profitability The core argument is that Tesla's business model is scalable to profitability while Waymo's is far less so. The issue of Waymo's profitability arose in a recent CNBC interview with Waymo co-CEO Tekedra Mawakana, where she was asked whether Waymo is profitable. She replied, "We're proving out that it can be a profitable business." When asked when Waymo would be profitable, she replied, "not clear." It's also not clear if Alphabet/Waymo doesn't have an internal forecast for when it will hit profitability, or if Mawakana preferred not to divulge what the company considers an uncertain forecast. However, it's inconceivable that Alphabet is not internally crunching the numbers on this, and if it does decide to spin off Waymo, it's a question that needs to be answered. The point here is that a business that can't be profitable isn't worth anything, let alone $45 billion, so at some point, its management is going to have to set some timelines. Tesla and timelines Whereas investors need to hear more about timelines from Waymo, whose public self-driving ride-hailing service was launched in 2018, there's probably a need for fewer declared timelines from Tesla, or, rather, a need for more accurate ones. For example, in 2019, CEO Elon Musk famously told investors to expect a million self-driving vehicles on the road by mid-2020. In April 2022, he also stated that Tesla aspired to reach volume production of a dedicated robotaxi (Cybercab) in 2024 -- a timeline that has now been pushed back to 2026. These timeline estimates matter because plugging overly optimistic assumptions from them into valuation models can produce dramatically erroneous conclusions. Why Tesla is better positioned With all that said, Tesla has clear advantages over Waymo, provided it can demonstrate safety and reliability and achieve regulatory approvals. Its advantages include: Lower vehicle costs, with Musk aiming for a $30,000 price tag for a dedicated robotaxi, the Cybercab. Meanwhile, Wall Street analysts estimate Waymo's current vehicles cost more than $120,000. In addition, Tesla manufactures its own cars (Waymo does not), and existing Teslas can be converted into robotaxis using Tesla's as-yet-unreleased-to-the-public unsupervised full self-driving (FSD) software, giving Tesla a significant advantage in scaling the robotaxi business. Tesla's use of camera-centric technology is inherently less expensive than Waymo's combination of cameras, light detection and ranging (Lidar) lasers, and high-definition maps. Every Tesla car (robotaxi or not) on the road is effectively a data gatherer, with the data used to improve the AI that powers its AI models. As such, even though Waymo was first, Tesla has significantly more data than Waymo. Which is the better EV stock? Waymo may become profitable in the future, particularly if Lidar costs continue to drop. However, it's challenging to think that it will be a strong competitor to Tesla, provided Musk's company can master safe, unsupervised FSD using a camera-centric approach. That's a big "if" at this stage, but it becomes a smaller "if" as time goes by and Tesla expands its nascent robotaxi offering across new geographies. Tesla's next robotaxi launch is expected to be in Phoenix, as it plans to continue slowly building its robotaxi business. I think Tesla is the better EV stock when comparing Tesla and Alphabet. Should you buy stock in Tesla right now? The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool has a disclosure policy. Better EV Stock: Alphabet vs. Tesla (Hint: Robotaxis Are the Key) was originally published by The Motley Fool Sign in to access your portfolio
Miami Herald
2 minutes ago
- Miami Herald
Why tariffs may not be a big deal after all
Key Points: Tariffs initially caused market anxiety and a 19% S&P 500 decline from February to April.A feared spike in inflation from tariffs hasn't materialized yet. Companies have largely managed tariffs by negotiating lower prices, absorbing costs, or modest price increases, keeping overall inflation mostly in have rebounded as the tariff impact proved less severe than expected. Better-than-forecast outcomes and ongoing trade deals have lifted the S&P 500 to an all-time estimated tariff duties are not being collected because of enforcement complexity. This, along with over 50% of imports not being subject to tariffs, has lessened the drag on the economy. It wasn't that long ago that President Donald's Trump's tariff strategy kicked up a hornet's next of debate. Those favoring tariffs, which are taxes on imports, argue that they are the best way to kick-start U.S. manufacturing. Opponents believe tariffs are inflationary, sparking higher prices that can derail the U.S. economy, risking recession. The truth may wind up landing somewhere in the middle. Tariffs can slow an economy, particularly if they increase quickly and significantly, like what President Trump originally proposed this spring. However, billionaire fund manager Ken Fisher, founder of Fisher Investments, points out that in the U.S., tariffs' impact may be more muted than expected. Image source:Legendary fund manager Paul Tudor Jones equated the originally proposed tariffs as the biggest new tax since the 1960s. In February, President Trump enacted 25% tariffs on Canada and Mexico. He also implemented a 25% tariff on autos, a 10% tariff on all imports, and after much wrangling, a 30% tariff on China. Related: Billionaire fund manager explains why so many missed the stock market rally The end result of those tariffs is that the average effective tariff rate currently is 20.2%, the highest since 1911, according to the Yale Budget Lab. JPMorgan Chase calculates the effective tariff rate was 2.3% in 2024, and is about 17% currently. Either way, a big bump in import taxes led many to worry that U.S. companies would be forced to pass along higher-than-normal price increases, causing inflation to spike and household and business spending to fall. That concern contributed heavily to the S&P 500's 19% tumble from all-time highs in February to the low in April. While risk remains that companies will see revenue growth and earnings slow because of the impact of tariffs, so far, inflation remains manageable. The Consumer Price Index for June showed headline inflation of 2.7%, up from 2.4% in May, but below the 3% inflation rate registered in January. It appears as of now that companies are successfully navigating the tariff hit, mostly through a combination of negotiating lower prices with exporters, absorbing some of the costs, and more modest price increases. More Tariffs: Luxury carmakers have a more aggressive tariff battle planTop 6 cars, SUVs, & trucks that may avoid tariffs, Consumer Reports saysAmazon's quiet pricing twist on tariffs stuns shoppersLevi's shares plan to beat tariffs, keep holiday prices down Of course, some industries - such as autos, appliances, apparel, and furniture - are hit harder by tariffs. Still, overall, inflation has yet to reach levels suggesting a major retrenchment in spending that could further weaken the economy. The better-than-hoped outcome, coupled with optimism that ongoing trade deals, such as the one recently reached with Japan, which lowered tariffs to 15% from 25%, would result in lower tariffs than initially feared, has helped the stock market recover all of its losses since February. The S&P 500 closed on July 26 at an all-time high. Ken Fisher founded Fisher Investments, a money manager with $332 billion in assets under management, in 1979. Over his 45-plus year career, Fisher has seen a lot of good and bad economies and markets. Related: Another automaker is forced to shift strategy due to tariffs He's not a fan of tariffs, saying previously that they historically hurt the country imposing them more than the country they've been imposed upon. Still, he also points out that the widespread threat associated with a tariff-driven economic recession may not be as big as some make it out to be. "Tariff terror abounds, but 'tariffied' investors miss what markets don't," wrote Fisher on X. "While universal tariffs are foolish and a real economic negative, their real world bite is often muted." Fisher had previously forecast that enforcing tariffs would be incredibly difficult, and that we'd see significant difficulty in collecting them. He also opined that high tariffs would likely cause the black-market import business to soar. He appears to be right. "Through June, roughly 39% of estimated tariffs duties were actually collected - far less than many feared - owing to tariff enforcement's complexity," said Fisher. "Markets move on the gap between reality and expectations, and it's always bullish when reality settles in better than overly dour expectations." Fisher also pointed out that over 50% of imports aren't subject to tariffs. This isn't to say that the U.S. economy would be better off without tariffs in terms of growth, but only that the drag on the economy may not be as bad as originally feared. According to Yale Budget Lab, current tariffs are reducing U.S. GDP this year by about 0.8%. In short, the stock market priced in a worst-case outcome from tariffs, providing plenty of room for positive surprises. Anything less than terrible can be viewed as a win that may lift analysts expectations for revenue and profit growth - the lifeblood of stock market returns. Related: Legendary fund manager has blunt message on 'Big Beautiful Bill' The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
CNBC
3 minutes ago
- CNBC
Here are the 4 big things we're watching in a busy week ahead for the stock market
Buckle up. It's a jam-packed week ahead, with a host of influential companies set to report alongside a Federal Reserve meeting — and, if that wasn't enough, there's fresh inflation and jobs data, too. On top of all that, we'll keep a close eye on any trade deal headlines ahead of the Aug. 1 deadline set by the Trump administration. In particular, we'll be watching for any agreement with the European Union. U.S. and Chinese officials are also set to meet in Sweden for another round of trade talks. Last week, the U.S. trade deal with Japan helped push the S & P 500 to record highs. Now, here's a closer look at what to expect in the week ahead from the Fed, the week's economic data releases and Club earnings. 1. Fed: Despite President Donald Trump 's pressure campaign, the central bank on Wednesday afternoon is widely expected to keep its benchmark overnight lending rate steady in the range of 4.25% to 4.5%, according to the CME Group's FedWatch tool . Instead, the question on investors' minds is whether a cut at the Fed's September meeting is on the table, so they'll be listening for whether Chairman Jerome Powell lays the groundwork for that during his typical post-meeting press conference. We don't expect Powell to change his tune about the Fed's data-dependency in making policy decisions, even in the face of Trump's criticism. On that note, we want to hear how Powell characterizes the resiliency seen in the labor market — initial jobless claims have dropped for six straight weeks, for example — and the inflation trends. While Trump's tariffs haven't yet led to a dramatic upturn in inflation, recent reports are showing a slight uptick , and there's a belief that U.S. companies absorbing the tariffs can only do so for so long before needing to raise prices. As of Saturday, the market put 62% odds on a quarter-point cut in September. Before the Fed's decision Wednesday, we'll get the first reading of second-quarter gross domestic product, which could be discussed during Powell's press conference. 2. Inflation: After the Fed's meeting concludes, tariff effects will stay in the spotlight thanks to the release of the June personal consumption expenditures price (PCE) index on Thursday morning. This is the Fed's preferred measure of inflation, despite the consumer price index (CPI) garnering more attention. There are some differences in the way the two gauges are calculated — particularly on housing and health-care inputs — but what stays the same is that investors are looking for tariff-related signs of inflation. For example, in the June CPI report tariff-sensitive categories like furniture and apparel showed outsized increases. For the PCE, economists polled by Dow Jones expect a 0.3% month-over-month increase and an annual rate of 2.5%. On a core basis, which excludes volatile food and energy prices, the Dow Jones consensus is for a 0.3% monthly gain and 2.7% annual increase. 3. Jobs, jobs, jobs: The big labor market event of the week is Friday's nonfarm payrolls report for the month of July, offering Wall Street a look at the pace of hiring in the face of trade policy uncertainty. As mentioned earlier, the U.S. labor market has continued to defy expectations for a material slowdown. For July, the consensus is that the U.S. economy added 102,000 jobs and the unemployment rate edged up to 4.2% from 4.1% in June, according to Dow Jones. Revisions to the prior months reports are something to watch. Ahead of Friday's release, we'll get the Job Openings and Labor Turnover Survey on Tuesday. The so-called JOLTS measures the amount of slack in the labor market, carrying implications for wage inflation. On Wednesday, payroll processing firm ADP releases its monthly look at private hiring — but, as we once again saw with the June data, it's not predictive of what the official government report will say. Thursday morning will bring the latest batch of first-time filings for unemployment insurance, known as initial jobless claims. Will it be seven weeks in a row of declines? One area of weakness in recent jobs data has been continuing claims, which suggests that while layoffs are going in the right direction, it's taking people time to get rehired. 4. Earnings: There are seven Club names reporting in the week ahead. All revenue and sales estimates provided below are courtesy of LSEG. Starbucks kicks off the action Tuesday night, and investors will be searching for additional signs of progress in CEO Brian Niccol's revitalization efforts. In its mostly disappointing April earnings report, Niccol had good things to say about the roughly 700 stores where it was piloting staffing and deployment changes. We hope that continued, with the benefits spreading to more cafes across the country. The FactSet consensus is for Starbucks to report its sixth straight quarter of same-store sales declines, at minus 1.3%. While necessary to turn the business around, Niccol's investments aren't cheap, so we don't expect strong profitability metrics this quarter, either. We do, however, hope that management is mindful that telling investors that earnings per share isn't a great metric to judge the turnaround may not go over well. Analysts expect total revenue of $9.31 billion and earnings per share of 65 cents. Meta Platforms reports after the close Wednesday. An expensive question on investors' minds: How much has Meta's spending spree on artificial intelligence talent cost so far? In April, the Instagram parent lowered its total expense guidance to $113 billion to $118 billion, down $1 billion on both ends of the range. Will that need to be revised higher? Similarly, will Meta's capital expenditures guidance of $64 billion to $72 billion be adjusted to account for higher spending on AI chips and data centers? The continued strength of Meta's social media ad business — and how that's driven earnings-per-share growth — has quelled concerns about aggressive AI spending. This time around, the market is looking for Family of Apps revenue to increase 14.8% on annual basis, according to FactSet. Total revenues are expected to be $43.84 alongside EPS of $5.91. Joining Meta on Wednesday night is fellow tech giant Microsoft , which is reporting its fiscal 2025 fourth-quarter results. The most important line item is the growth of the cloud-computing business Azure, and the AI services contributions to that expansion. Last quarter, Azure grew a better-than-expected 35% on a constant-currency basis, with AI being responsible for 16 points of growth. For the June period, the FactSet consensus for Azure is growth of 34.9% (there's no estimate for AI, specifically). Overall, analysts expect Microsoft to report earnings per share of $3.37 on revenue of $73.81 billion. Microsoft's capex commentary for its fiscal 2026 will also be note of note, carrying implications for leading AI chipmaker Nvidia and the likes of industrials such as Eaton, which supplies electrical equipment for data centers. The current consensus is for capex of $73.9 billion in fiscal 2026, according to FactSet. We'll also listen for any updates on the contract renegotiations with frenemy OpenAI, which is seeking greater independence from its early benefactor. Bristol Myers Squibb will report results on Thursday before the open. Sales of Cobenfy, the company's new schizophrenia treatment, will be a key watch item for investors. We're also interested to hear about other potential indications for Cobenfy, such as its use in the treatment of Alzheimer's psychosis, with late-stage trial data expected later this year. The initial response that Bristol Myers is seeing to its recently announced plan to sell blood-thinning medication Eliquis directly to patients through its Eliquis 360 support program will also be something to watch out for during the conference call. Analysts may also ask about Cristian Massacesi joining as its new chief medical officer. The Street is looking for earnings of $1.07 per share on revenue of $11.38 billion. Apple joins the parade of tech earnings after the bell Thursday. After the March quarter saw a "pull-forward" in iPhone sales as consumers rushed to beat fears of tariff-driven price hikes, there's a belief that the final two quarters of Apple's September-ended fiscal year will be softer than before. For the three months ended in June, the FactSet consensus is for iPhone sales of $40 billion. A few more questions: Will Apple's high-margin Services business get back on track after a light miss in the March quarter? Did the estimated $900 million tariff impact for the June quarter materialize, and can management shed any more light on its supply chain and artificial intelligence strategies going forward? There's no question Apple has been a frustrating stock this year, but as long as the iPhone remains the best consumer hardware device on the market, there's time to turn it around. Analysts expect total revenue of $89.33 billion and earnings per share of $1.43. Amazon will also report after the bell on Thursday. Revenue growth and profitability at cloud unit Amazon Web Services remains the key metric for investors to watch. On the retail side, we're also interested in more details on how Amazon is leveraging AI and automation in its warehouses and throughout its massive logistics network. Though the four-day Prime Day event won't be reflected in the reported numbers — given it was in July (third quarter) — we're still interested to hear management's commentary on the event, as it will no doubt play into the guidance the team provides. The combination of Prime Day and the back-to-school season stands to support both consumer demand and ad revenue growth in the third quarter. Analysts expect total revenue of $162.06 billion and earnings per share of $1.32. Linde will be out with results on Friday, before the opening bell. We're simply looking for more of the consistency we've come to know and love from Linde. However, outside of the numbers, it will be interesting to see what management has to say about the various industries the company serves. A commentary on how tariffs are affecting demand from customers will also help better inform our view on various sectors of the economy. Also of interest will be management's view on the recently announced long-term agreements to supply the U.S. space industry. As for earnings, last time around, management baked in the assumption of economic deterioration and recessionary conditions. Given the resiliency we've seen since then and the increased clarity as it relates to tariffs, we'll look for the team to revise their outlook for the remained of the year. Analysts are looking for earnings of $4.03 on revenue of $8.35 billion. Week ahead Monday, July 28 Before the bell earnings: New Gold (NGD), Enterprise Products Partners (EPD), Alerus Financial Corporation (ALRS), Bank of Hawaii (BOH), Alliance Resource Partners (ARLP) After the bell: Celestica (CLS), Rambus (RMBS), Tilray (TLRY), WM (WM), Cadence Design Systems (CDNS), Crane (CR), Whirlpool (WHR), Amkor Technology (AMKR), Brixmor Property Group (BRX), Enterprise Financial Services (EFSC), Universal Health Services (UHS), Brown & Brown (BRO), Veralto (VLTO) Tuesday, July 29 FHFA Home Price Index at 9 a.m. ET Job Openings and Labor Turnover Survey at 10 a.m. ET Before the bell: UnitedHealth (UNH), SoFi (SOFI), PayPal (PYPL), Boeing (BA), United Parcel Service (UPS), Spotify (SPOT), Merck (MRK), Nucor (NUE), AstraZeneca (AZN), JetBlue Airways (JBLU), Procter & Gamble (PG), Carrier Global (CARR), American Tower (AMT), Norfolk Southern (NSC), Polaris (PII), Royal Caribbean Cruises (RCL), Stellantis (STLA) After the bell: Starbucks Corp. (SBUX), Visa (V), Marathon Digital (MARA), Booking (BKNG), Cheesecake Factory (CAKE), Seagate (STX), Teradyne (TER), Penumbra (PEN), PPG Industries (PPG), Republic Services (RSG), Avis Budget (CAR), Caesars Entertainment (CZR) Wednesday, July 30 ADP Employment Survey at 8:15 a.m. ET First look at Q2 U.S. GDP at 8:30 a.m. ET Federal Reserve interest rate decision at 2 p.m. ET Fed Chair Jerome Powell's press conference at 2:30 p.m. ET Before the bell: Altria (MO), Vertiv (VRT), Virtu Financial (VIRT), Kraft Heinz (KHC), Teva Pharmaceutical Industries (TEVA), Generac (GNRC), Etsy (ETSY), GE HealthCare (GEHC), Hershey Company (HSY), Humana (HUM), Harley-Davidson (HOG), VF Corp. (VFC), Vita Coco Company (COCO), GlaxoSmithKline (GSK) After the bell: Meta Platforms. (META), Microsoft (MSFT), Robinhood Markets (HOOD), Applied Digital (APLD), Carvana (CVNA), Lam Research (LRCX), Qualcomm (QCOM), Ford Motor (F), Arm Holdings (ARM), Albemarle (ALB), MGM Resorts International (MGM), Agnico-Eagle Mines (AEM), Sprouts Farmers Market (SFM), Allstate (ALL), Brookfield (BN), Western Digital (WDC), eBay (EBAY) Thursday, July 31 Personal Consumption Expenditures Price Index at 8:30 a.m. ET Initial jobless claims at 8:30 a.m. ET Before the bell: CVS Health (CVS), Roblox (RBLX), Cameco (CCJ), Carpenter Technology (CRS), Norwegian Cruise Line (NCLH), AbbVie (ABBV), Bristol Myers Squibb (BMY) , Howmet Aerospace (HWM), Baxter International (BAX), Builders FirstSource (BLDR), Cigna (CI), Canada Goose (GOOS), Mastercard (MA), PG & E (PCG), Shake Shack (SHAK), SiriusXM (SIRI), Southern Company (SO) After the bell: Apple (AAPL), Amazon (AMZN), MicroStrategy (MSTR), Reddit (RDDT), Coinbase Global (COIN), Riot Platforms (RIOT), Enovix Corporation (ENVX), Roku (ROKU), Bloom Energy (BE), Cloudflare (NET), Cable ONE (CABO), Innodata (INOD), MasTec (MTZ), AXT (AXTI), Beazer Homes USA (BZH), Eldorado Gold (EGO), Edison International (EIX) Friday, August 1 Trump's "reciprocal" tariffs deadline Nonfarm payrolls report at 8:30 a.m. ET Before the bell: Linde (LIN), Exxon Mobil (XOM), Chevron (CVX), Regeneron Pharmaceuticals (REGN), Colgate-Palmolive (CL), CNH Global (CNH), Dominion Energy (D), AES (AES), Cboe Global Markets (CBOE), Fulgent Genetics (FLGT), Fluor (FLR), LyondellBasell Industries (LYB), Ocugen (OCGN), T. Rowe Price (TROW), Ameren (AEE), Ares Management (ARES), Avantor (AVTR) (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
