Fall, has fallen to insensitivity, Tesla also fell miserably

"When the market opened in the morning, it still rose, how did it close and fall again?" In the past 9 trading days of the US stock market, except for Monday, the other trading days are not the same. We actually discussed the causes behind this market phenomenon yesterday. Today we mainly discuss whether the impact on the market under such a context can be sustained.

tesla

Today's knife is the semiconductor sector and consumer discretionary sectors that perform the worst.

But as mentioned earlier, the consumer discretionary segment was largely due to a 11% drop in Tesla shares, in short, delaying the launch of new cars due to ongoing supply chain issues.

The Philadelphia Semiconductor Index (-4.8%), down -22.4% after Intel (INTC -7.0%), Lam Research (LRCX -6.9%) and Teresa, was basically above expectations, but the guidance for the next quarter was slightly worse than it was plunging.

Tesla reported a strong set of FQ4'21 results, with double growth in revenue and adjusted earnings per share.

Tesla previously provided its production and delivery updates on January 3, when the market gave a very positive and positive response.

So before the earnings report, I think the market has taken into account a very good performance. So the more important question left for the market is whether Tesla can continue to perform well as the entire market revaluates high-growth stocks.

It is precisely because of this that many media today said that Tesla's plunge mainly stems from Musk's statement that new cars will not be launched this year.

Faced with ongoing supply chain disruptions, Tesla is betting on increasing deliveries rather than diversifying products. As a result, some investors may also be concerned about whether Tesla will cede its early pickup truck leadership to Ford (F), General Motors (GM) and Rivian (RIVN). Given the importance of the pickup market, we believe these concerns are justified.

Musk said Tesla's basic focus this year is to expand production. He expects the company to easily ramp up production by more than 50 percent this year. The rapid growth in car deliveries has helped Tesla achieve record profits in 2021.

Tesla reported an 87 percent increase in car deliveries last year compared to 2020, achieving a profit of $5.5 billion and sales of $53.8 billion for the full year last year, both higher than in 2020 and better than Wall Street expected.

In 2020, Tesla achieved full-year profit for the first time, with a profit of $721 million and sales of $31.5 billion.

As we discussed in previous articles, due to Tesla's abundant cash flow, its main strategy is to use its product advantages to quickly expand its market share and increase its service offerings this year.

In fact, tesla last delivered a new model to customers nearly two years ago, when the compact SUV Model Y was delivered.

There was a global shortage of computer chips last year, but Tesla, with its in-house software engineering expertise, achieved the fastest increase in vehicle deliveries in years. Like many car companies, Tesla has also benefited from soaring car prices caused by the shortage of supply.

But Tesla has not been spared the impact of supply chain problems, which have led to underopening of Tesla's factories, as well as challenges such as transportation and labor.

Tesla's gross margin for its auto business last year, a measure of its cost efficiency, rose to 29.3 percent from 25.6 percent in 2020, though Tesla said rising raw material prices and higher logistics costs weakened profits, and increased costs associated with car recalls also affected profits.

And the global semiconductor shortage is expected to continue until the end of this year, although the degree of shortage will ease.

But the key question is, is Tesla's sharp pullback an opportunity to buy?