Latest news with #magnificentseven
Times
20 hours ago
- Automotive
- Times
Analysts are downbeat on Tesla but investors are still buying
Pessimism towards Tesla has been rising on Wall Street. Analysts have steadily downgraded earnings estimates for the electric carmaker led and backed by Elon Musk since January, slashing profit forecasts for this year by almost a year. A consumer backlash against Musk's political interventions in President Trump's administration, rising competition and a muted reception for its upgraded Model Y vehicle, which has compounded caution amid a slowdown in sales. Yet investors seem undaunted. The stock may have fallen 31 per cent from a record peak of $480 in December, but is still 35 per cent higher than on November 4, the day before Trump's election, which represents an eye-watering 112 times forward earnings for next year, levels last seen during the 2021 post-pandemic boom in technology stocks. • Investors in Musk's AI company undeterred by Trump clash That also makes Tesla the best performing of all the 'magnificent seven' — which also includes Alphabet, Amazon, Apple, Meta Platforms, Microsoft and Nvidia — which have returned an average of 5 per cent generated by the rest of the group. 'I'd encourage people to look beyond the bumps and potholes of the road immediately ahead of us,' Musk told Wall Street analysts as the company unveiled its first quarter results in April. 'Lift your gaze to the bright, shining citadel on a hill. That's where we're headed.' The 'citadel' in question is Tesla's foray into robotics. The launch of Tesla's 'robotaxis' is anticipated this month in its home base of Texas. The unveiling of between ten and 20 self-driving Model Y cars will represent the first tangible step in efforts by Musk to pivot away from chasing EV sales, towards such technology. Its Cybercab is scheduled for 'volume production' next year, the company has said. By 2030, Tesla will be pumping out 'millions' of its Optimus humanoid robots, the Tesla boss said. Musk, 53, has insisted that the company will have '90-something per cent' share of the robotaxi market, when it gets 'millions of cars' on the road next year. The billionaire's desire to dominate the robotics industry is a familiar playbook among the tech titans, Philippe Houchois, an analyst at Jefferies said, but there is a logic to it given the inherent challenges in gaining supremacy over the car market. 'The problem is, the car industry existed long before Musk and however good it is, you cannot dominate the car industry,' he said. However, competition is growing. Waymo, which is backed by Google's parent Alphabet, already claims to have more than 250,000 weekly rides across Phoenix, San Francisco, Los Angeles and Austin, through a partnership with Uber. Other rivals are also pushing ahead, like Wayve, a British start-up, Zoox, which is backed by Amazon, and China's Yet it is the EV business that is generating the cash needed to fund Tesla's great growth hopes. 'Any reality that we have is in a car business that is struggling,' Houchois said. While Musk has been on stage wielding chainsaws and attending political rallies, Tesla sales have been sliding. Tesla unveiled its worst quarterly numbers since 2020 in April. • Business live: Bank of England holds interest rates at 4.25% The company is wrestling with rising competition from Chinese rivals like BYD, as well as traditional carmakers such as Volkswagen, which have launched hybrid and electric vehicles. BYD, which is pressing ahead with overseas expansion, regained its title as the world's largest EV seller earlier this year and in April outsold Tesla in Europe for the first time, indicating that the Shenzhen-based group is challenging its American rival far beyond the borders of its home market. Tesla had benefited from an early lead in ramping up its deliveries. 'But the gap is closing,' Houchois said, pointing towards Tesla's choice to prioritise spending on its more nascent technology over driving further scale in the EV market. 'A flaw in Elon Musk's thinking is that he may be right in not wanting to invest long-term in auto, as he thinks it's a losing proposition in terms of valuation, but Tesla should play the game and do the job of competing in autos until autonomy and robots deliver the next phase of growth,' he said. The uncertainty caused by tariffs and the broader macroeconomic tumult prompted Tesla to pull guidance for a return to volume growth this year. Price tags have continued to decline as Tesla attempts to stimulate demand, a trend that analysts expect to continue over the next few quarters, forecasting an average sales price of $38,300 by the first quarter of next year, down from $39,720, according to Factset data. Sentiment towards Musk and his role in driving Tesla to a $1 trillion company is also complicated. While the boss has been instrumental in pushing the company forward, some analysts say that the company could still thrive without him. 'There are 120,000-plus good, hardworking people that are very smart at moving the company forward. [Musk] helps establish that vision, but they … bring the magic to life,' George Gianarikas, an analyst at Canaccord Genuity, said. For Tesla to prove that it deserves its inflated valuation, a re-acceleration in sales growth and improvement in margins is required, analysts say. A changing macroeconomic backdrop could provide a natural boost. 'If rates come down a lot, it'll help with buying cars,' Gianarikas said. It will also need to maintain healthy cashflow to justify funnelling cash into its future bets. Baillie Gifford, which made its name as an early backer of Tesla as well as other technology companies, has already sold down its holdings in the EV maker across its trusts since the end of last year. 'The challenge for us as long-term investors is, what do you do with the stock that has appreciated that much where there hasn't really been any fundamental driver of that news,' Tom Slater, manager of the Scottish Mortgage Investment Trust — which has reduced its holding to less than 1 per cent of its portfolio — told investors earlier this year. Unless Musk can show Tesla is capable of regaining its sales momentum, more investors may follow the Scottish heavyweight's lead.
Free Malaysia Today
28-05-2025
- Business
- Free Malaysia Today
US stocks end sharply higher on Trump's tariff reprieve
A broad rally lifted all three major US stock indexes, with AI-focused 'magnificent seven' stocks driving the Nasdaq higher. (AP pic) NEW YORK : Wall Street surged on Tuesday as investor risk appetite was buoyed by US President Donald Trump's latest tariff respite and an unexpected jump in consumer confidence. A broad rally sent all three major US stock indexes higher, with strength in the AI-related 'magnificent seven' group of momentum stocks putting the tech-laden Nasdaq out front. The S&P 500 is now within 3.6% of its record closing high reached on Feb 19, having plunged as much as 18.9% below that level in the wake of Donald Trump's erratic tariff announcements, which have whipsawed markets for much of the President's second term. 'When (Trump) came out with guns blazing April 2, the market thought the world was ending,' said Paul Nolte, senior wealth adviser and market strategist at Murphy and Sylvest in Elmhurst, Illinois. 'The selloff was so strong and quick that you would expect some rebound, and the rebound has been so sharp and quick that you would expect some type of pullback as investors digest it and ask themselves what the terrain really looks like.' In the latest move, the president backed down from his 50% tariff threat against the European Union, delaying its implementation until July 9 to allow for negotiations between the White House and the 27-nation bloc. The move prompted Brussels to prepare for trade negotiations. 'Investors have kind of figured Trump out a little bit,' Nolte added. 'He's like the poker player at the table that you know is making some bets and then when pressed by the other players at the table, he folds.' On the economic front, a 14.4% surge in current-month consumer confidence added momentum to the rally, helping investors look past a steeper-than-expected drop in new orders for core capital goods, considered a barometer of US corporate spending plans. Richmond Federal Reserve President Thomas Barkin told Bloomberg that economic data has yet to show increased price pressure or joblessness, echoing the sentiments of many Fed officials who anticipate the key interest rate will remain unchanged until the full effect of Trump's tariffs is known. Minutes from the US Federal Reserve's most recent monetary policy meeting are due on Wednesday. Long-dated US Treasury yields dipped, while those on the 30-year note were set for their biggest one-day fall since late April, mimicking a steep price rally in longer-term Japanese debt. The Dow Jones Industrial Average rose 740.58 points, or 1.78%, to 42,343.65, the S&P 500 gained 118.72 points, or 2.05%, to 5,921.54 and the Nasdaq Composite gained 461.96 points, or 2.47%, to 19,199.16. All 11 major sectors of the S&P 500 advanced on the day, with consumer discretionary and tech shares leading the gainers. Airlines and megacap tech-related growth stocks were the clear outperformers. Semiconductors were also ahead of the pack, one day before chipmaker Nvidia is due to report its quarterly results. Year-on-year, the AI darling is expected to post a 43.5% jump in earnings per share, on a 66.2% revenue surge. Temu-parent PDD Holdings dropped 13.6% after reporting a 47% fall in first-quarter profit and missed quarterly revenue estimates. Lagging shares were Fair Isaac Corp, down 11.3%, VeriSign, Inc, down 3.6%, and Autozone Inc, lower by 3.4%. Advancing issues outnumbered decliners by a 5.42-to-1 ratio on the NYSE. There were 222 new highs and 27 new lows on the NYSE. On the Nasdaq, 3,206 stocks rose and 1,264 fell as advancing issues outnumbered decliners by a 2.54-to-1 ratio. The S&P 500 posted 24 new 52-week highs and no new lows while the Nasdaq Composite recorded 87 new highs and 63 new lows. Volume on US exchanges was 16.98 billion shares, compared with the 17.72 billion average for the full session over the last 20 trading days.
Daily Mail
22-05-2025
- Business
- Daily Mail
EXCLUSIVE I'm an investing expert: Here's where to find a bargain on the UK stock market
For so long, the US has been the focus for retail investors the world over. Countless people will have found their portfolios heavily exposed to the US' S&P 500 and the 'magnificent seven' tech stocks, and for good reason. Over the past five years, the S&P 500 has risen 101 per cent, while the magnificent seven (Tesla, Amazon, Microsoft, Apple, Nvidia, Alphabet and Meta) have all seen strong growth. Nvidia, something of a special case, has gained almost 1,400 per cent over the past five years. In spite of the gains seen by these stocks, investors risk leaving all of their eggs in one basket. This is where the importance of diversification becomes apparent, with the recent tariff announcements made by Donald Trump having shown how quickly gains can be reversed. Meanwhile, as the FTSE 100 continues to make record gains, the rest of the UK market remains largely unloved, pushing the Government to make clear its intention to drive retail investment in a bid to boost the UK economy. Recent years have seen a wealth of public UK firms ditching their listings on the main market – 88 last year alone – as many bet instead on more favourable listing options. For all the negatives though, there are plus sides. The UK market is generally cheaper than its US equivalent, but not for lack of value. In fact, according to trading platform IG, there are hidden value diamonds still remaining in the rough. Where to find a bargain on the UK stock market Chris Beauchamp, chief market analyst at IG, told This is Money that certain UK firms, have one thing in common. Despite their low share prices, they aren't cheap as a result of being poor-quality. 'This is a classic case of strong performance being ignored by the wider market,' he says. 'With such a heavy focus on US tech and the hugely volatile global macro environment, UK investors may have missed some of the quiet compounders closer to home, something recently noted by BlackRock's Larry Fink. 'These UK names aren't cheap because they've struggled – they're cheap despite delivering. That's what makes this list particularly interesting for value-minded investors.' Some firms, such as Smiths Group have seen strong share price movements, growing 19 per cent since the start of the year alone. Including dividends, the firm has seen its total return grow by 94 per cent over the past five years. The firm has grown its earnings per share consistently since 2020, but its price to earnings ratio currently sits at 23, 91 per cent below its five-year average. A low price to earnings ratio can be an indicator that a certain stock is undervalued, though this isn't always the case. The biggest grower over the past five years was Drax Group, returning 279 per cent over the period, despite its PE ratio being 4 - 60 per cent lower than its five-year average. Meanwhile, Sainsbury's has returned 92 per cent over five years, with its PE ratio sitting at 15, 64 per cent below the five-year average. The supermarket plans to open 15 new stores this year, which it said is its 'most significant investment in new supermarket space for many years.' Also on the high street, bakery chain Greggs operates on a PE ratio of 14, 30 per cent below its five-year average. Despite having lost 27 per cent so far this year, the firm's total return remains above 50 per cent for the past five years and shares have surged recently. The firm posted a 7.4 per cent increase in sales to £784million in the first 20 weeks of the year. Greggs plans to open 150 new bakeries this year, pushing towards its goal of surpassing the 3,000. Currently the firm has 2,638 bakeries, having opened 20 new locations in 2025 so far. Heavily Covid-impacted cruise operator Carnival also made IG's list, with a PE ratio lagging 37 per cent behind its five year average. The company has returned 79 per cent over the past five years, but shares have dropped 12.6 per cent this year. IG said Carnival's price remains 'well below pre-Covid norms.' Beauchamp added: 'For years, UK stocks have been ignored by global investors, but that view is starting to change. 'A cooling inflation picture, renewed interest in income-generating assets, and the prospect of several rate cuts this year are creating a very different environment. If global capital starts to rotate back into value – the UK is well placed to benefit.' Also on the bargain list were Spire Healthcare, lagging 26 per cent behind its five year average PE ratio, while 4imprint is 34 per cent below its own average. Spire has returned 119 per cent over five years, while 4imprint has returned 120 per cent. Convatec, Admiral and PPHE have seen their price to earnings ratio fall 32 per cent, 25 per cent and 24 per cent respectively, despite five year returns of 49 per cent, 102 per cent and 46 per cent each.
ABC News
17-05-2025
- Politics
- ABC News
Murray Watt called the new Labor Queensland MPs the 'magnificent seven' after the election.
Murray Watt called the new Labor Queensland MPs the "magnificent seven" the day after the election.
