This single-stock ETF with Nvidia exposure is up over 400% this year. Why investors should stay away.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 11 2024
0mins
Should l Buy TSLA?
Source: MarketWatch
- Single-stock ETFs Trend: Single-stock ETFs are gaining popularity in 2024, with Nvidia's stock experiencing a significant rally.
- Contact Information: MarketWatch reporter Isabel Wang provides contact information for tips or feedback and mentions her social media handles.
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Analyst Views on TSLA
Wall Street analysts forecast TSLA stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for TSLA is 401.93 USD with a low forecast of 25.28 USD and a high forecast of 600.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
30 Analyst Rating
12 Buy
11 Hold
7 Sell
Hold
Current: 428.270
Low
25.28
Averages
401.93
High
600.00
Current: 428.270
Low
25.28
Averages
401.93
High
600.00
About TSLA
Tesla, Inc. designs, develops, manufactures, sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products. Its segments include automotive, and energy generation and storage. The automotive segment includes the design, development, manufacturing, sales and leasing of high-performance fully electric vehicles, and sales of automotive regulatory credits. It also includes sales of used vehicles, non-warranty maintenance services and collisions, part sales, paid supercharging, insurance services revenue and retail merchandise sales. The energy generation and storage segment include the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives. Its consumer vehicles include the Model 3, Y, S, X and Cybertruck. Its lithium-ion battery energy storage products include Powerwall and Megapack.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Margin Improvement: Tesla's gross margin increased from 15.4% in Q3 to 17.9% in Q4, despite launching lower-priced Model 3 and Model Y versions, showcasing successful cost management and product optimization that may enhance future profitability.
- Capital Expenditure Plans: Tesla anticipates capital expenditures exceeding $20 billion in 2026, a substantial increase from $8.5 billion in 2025, aimed at starting production at new factories and advancing technology development, reflecting the company's ambitious growth strategy.
- Market Competition Pressure: While Tesla experienced sales growth in the Asia-Pacific region, the company warned of potential margin compression across all business segments, indicating the need for continuous innovation to maintain its market leadership amid intense competition.
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- Market Impact: This merger breaks the global M&A record, with SpaceX acquiring xAI for approximately $1 trillion and xAI valued at around $250 billion, surpassing Vodafone's $203 billion acquisition of Mannesmann in 2000, marking Musk's strategic integration in space and AI.
- Portfolio Dominance: The combined entity dominates the ARK fund, significantly exceeding other holdings like Figure AI (4.24%) and Databricks (3.55%), providing investors with a stronger concentrated investment opportunity in the AI and aerospace sectors.
- Future IPO Outlook: SpaceX is reportedly preparing for a potential IPO later this year that could see its valuation exceed $1.5 trillion, and this merger consolidates high-conviction exposure for ARK investors, further solidifying its leadership in emerging markets.
See More
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- Decline in EV Sales: Following the removal of federal tax credits, EV sales plummeted in October, dropping from 10.3% market share in September, highlighting a disconnect between consumer demand and policy support that may hinder future market growth.
- Automaker Responses: Ford has expressed support for a unified national standard, arguing that current emissions regulations do not align with consumer choices, reflecting the automotive industry's divisions over environmental policies, particularly between EVs and traditional vehicles.
- Tesla's Position: Tesla opposes the EPA's reconsideration of the endangerment finding, asserting that this regulatory framework has provided stability for its investments in product development, warning that abandoning fuel-efficiency goals could negatively impact consumer choice and economic benefits.
See More
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- Cisco Earnings Impact: Cisco's stock plummeted 11% despite reporting earnings of $1.04 per share, exceeding expectations, as the company’s gross margin guidance of 65.5%-66.5% fell short of the 68% consensus, highlighting the impact of rising hardware costs.
- Memory Shortage Risks: Lenovo confirmed mounting pressure on PC shipments, with CEO Yang Yuanqing stating that while unit pressures are expected, the company aims to maintain profitability, reflecting growing concerns over memory shortages in the industry.
- Software Sector Decline: The iShares Expanded Tech-Software Sector ETF dropped over 3% on Thursday, with the sector down over 20% year-to-date, illustrating the ongoing impact of fears surrounding AI disruption on software stock performance.
See More
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- AI-Driven Investment Opportunities: The five leading AI companies, including Nvidia and Alphabet, have achieved an average return of 880% since 2023, indicating the strategic value of AI-related investments within the Nasdaq-100 index.
- Long-Term Investment Advantage: The Invesco QQQ ETF has delivered a compound annual return of 10.4% since its inception in 1999, with an even higher rate of 20.5% over the past decade, demonstrating the effectiveness of long-term holdings in mitigating market volatility risks.
- Market Timing Insights: Despite market fluctuations, historical data suggests that investing in the Nasdaq-100 index and its ETF during downturns often leads to long-term gains, encouraging investors to hold or buy even as the index approaches historical highs.
See More
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- Changing Inflation Expectations: The core CPI is projected to drop to 2.52% in Friday's report, aligning with the 2017-2019 average, indicating a return to pre-COVID inflation levels, which may prompt the Fed to adopt a more dovish monetary policy.
- Market Capital Flow: Lee notes that investors are rotating out of the Magnificent 7 into companies supplying AI infrastructure, such as energy providers and industrial manufacturers, which could trigger a 10-20% decline in the U.S. market.
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