WEEKLY RECAP
IN TECH
AI chip stocks: U.S. government considering AI legislation
After a Wall Street Journal article indicated the Biden administration may ban AI chip exports to China, Nvidia (NASDAQ:NVDA) and AMD fell Wednesday.Concerns about U.S. rivals dominating this technology prompted the action.The Commerce Department may block Nvidia and other chip firms from shipping AI chips to China in July, the report said. Nvidia’s unlicensed A800 chips would be banned.
Despite the newest news, Citi analysts believe AI demand will surpass supply this year and Nvidia can shift chips. Stock is rated Buy.
AMD rose 2.4% to $113.91, while Nvidia fell fractionally to $423.02.
Micron outperforms, but China risk worries investors.
Micron’s fiscal third-quarter earnings beat expectations, but China market share issues persisted.Thursday’s 4% drop extended through Friday’s close.
The chipmaker reported an adjusted loss of $1.43 a share on revenue of $3.75 billion, saying memory-chip revenue had bottomed. Investing.com analysts predicted a $1.59 loss on $3.67B revenue.
Piper Sandler analysts upgraded to Neutral with a $70 price target “primarily based on improving end-market inventory conditions with a potential improvement in volumes and pricing in 2H23.”
Several analysts rated Tesla neutral.
After Tesla (NASDAQ:TSLA) shares’ blazing run last month, Goldman Sachs, Morgan Stanley, and Barclays downgraded the company based on valuation.
Tesla stock has gained 70% since its low in late April, while the S&P 500 has gained 8%.
Goldman downgraded the stock to Neutral from buy, but analysts boosted the price target to $248 from $185 due to better EPS projections and target multiples.
Morgan Stanley downgraded Tesla shares to Equal Weight from Overweight and raised its price target to $250 from $200, citing its “relatively full valuation and a more balanced risk reward and highlight key drivers and investor debates for the stock at this level.”
Tesla shares are up 122.8% year-to-date.
Apple surpasses $3 trillion.
Apple (NASDAQ:AAPL) became the first corporation to reach a $3 trillion market worth on Friday.
Citi analysts started coverage with a Buy rating and a Street-high $240 price target, pushing Apple shares higher. Apple stock has upside potential despite a 47% year-to-date increase.
“Apple is navigating the macro slowdown and inflationary pressure on consumer spending by consistently gaining share from Android phones, we see ~30% further upside potential from current levels,” analysts wrote in a client note.
They also believe the market underestimates gross margin expansion. Analysts are positive on Apple due to its rising services sales mix, robust balance sheet, and this aspect.
IN EV SPACE
Lordstown bankrupts
Lordstown (NASDAQ:RIDE) shares fell 50% on Tuesday morning after its Delaware bankruptcy filing.
Lordstown filed a lawsuit against Foxconn parent Hon Hai Technology Group as part of its Chapter 11 restructuring, alleging Foxconn of fraud and repeatedly breaking its promise to invest up to $170 million in the EV maker.
The lawsuit claims Foxconn never intended to fulfill its responsibilities, particularly with the new vehicle development platform. Foxconn intentionally and maliciously misused Lordstown’s contractual arrangements to undermine and demolish the company’s activities and further its own economic interests, according to the complaint.
Lordstown, named for its Ohio hometown, announced its Nasdaq delisting shortly after. The filing claimed that the company’s class A common stock was suspended on July 7 due to a June 28 notice of listing rule violations.
RIDE plummeted 27% this week and nearly 88% this year.
Tesla Standard grows.
This week, more EV makers and charging firms adopted Tesla’s North American Charging Standard (NACS), or “Tesla Standard.”
If they want federal funds to electrify highways, EV charging providers in Washington must install Tesla’s NACS. Texas made a similar action two days earlier.
Blink Charging (NASDAQ:BLNK) and ChargePoint (NYSE:CHPT) expanded their Tesla Standard adoption Wednesday. ChargePoint added the popular charging connector to all new orders and current installations of its CP6000, Express 250, and Express Plus products,
Additionally, Swedish automaker Polestar (NASDAQ:PSNY) stated Thursday that it has struck a NACS adoption agreement with Tesla. From 2025, Polestar will feature the Tesla standard in all new vehicles. Polestar drivers can use the network with adapters around mid-2024. Polestar CEO Thomas Ingenlath termed the decision a “great win” for North American customers that “will greatly increase the rate of EV adoption in a key automotive region.”
Chrysler parent Stellantis (NYSE:STLA) introduced Free2move Charge, a “Charging and Energy” business unit, on Tuesday. The unit will offer access to over 500,000 European charging outlets “through partners” by year’s end.
After rivals Ford (NYSE:F) and General Motors (NYSE:GM) announced deals to adopt Tesla’s charging standard in North America, the carmaker repeated that it was still reviewing the standard.
TSLA shares rose 4.7% to $261.77, up 8.6% from Monday’s intraday low of $241.02.
Sell TuSimple?
TuSimple (NASDAQ:TSP), a rival autonomous trucking business, experienced a roller-coaster week that began with gains on the company’s first fully unmanned road test in China and concluded with shares dropping over 30% off their $2.30 high on rumors the company is considering selling its U.S. operations.
Due to a failure to complete two quarterly reports, the California-based company, which is considering the sale to focus on Asia-Pacific, may be delisted from Nasdaq.
TuSimple, which has been in the red since its 2015 founding, said it has hired U.S. investment firm Perella Weinberg Partners as a financial advisor to investigate commercial mergers.
In recent weeks, the business has increased its focus on China and Japan.TSP fell 18% last week.
Outlook for the week on energy and precious metals
WTI Technical Forecast
Sunil Kumar Dixit, chief technical strategist at SKCharting.com, said WTI must go near the 100-day SMA, or Simple Moving Average, of $73.90, which matches the weekly Middle Bollinger Band.
“Sustainability above this zone will eventually extend the upward move towards the next leg higher, at the 200-day SMA, or Simple Moving Average, of $77.50 and the 50-week EMA (Exponential Moving Average) of $78.80,” Dixit said.
On the other hand, a fresh attack on the 200-week SMA of $67.50 might push WTI down to $63.70, accelerating its retreat into the significant support region held by the 100-month SMA of $59.65.
Gold: Forecast
Dixit of SKCharting noticed that spot gold’s weekly price action fell to $1,893 despite Friday’s rally to $1,900.
The 5-week EMA is dynamically positioned around $1,938, making a possibly bearish crossover to the Weekly Middle Bollinger Band of $1,948, which may indicate that bears have adequate fuel for more negative exploration, according to Dixit.
Spot gold has a short-term range of $1,938–$1,948 and $1,888–$1,860.
Dixit expects a retest of the $1,893 low and the 50-week EMA of $1,888 if the 5-week EMA stays below $1,938.
He stated gold must break $1,948 and $1,975, $1,958, and $1,968 to resume the rise.
“If bulls fail to clearly establish recovery above $1,948, bearish correction will likely extend deeper into the 200-day SMA of $1,860. Dixit said the monthly Middle Bollinger Band of $1,835 provides major support.
Gas Price Forecast
Dixit of SKCharting said that if its bullish momentum continues, it might reach the 200-week SMA of $3.75 in the following week, followed by the 50-week EMA of $3.82.
Dixit said gas prices will rise as long as they stay over the 5-week EMA of $2.60. Breaking below that zone can push prices below the Weekly Middle Bollinger Band $2.37.
Short-term gas prices are $3.00–$3.25 and $2.60–$2.37.
Weekly Earnings Calendar
Monday,
No Earnings
Tuesday
J Sainsbury’s (SBRY)
Wednesday
No Earnings
Thursday
No Earnings
Friday,
Yaskawa Electric Corp (6506)