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Tech Wreck
Sean H. & Jocelin A.
July 24, 2024 • Estimated Reading Time: 10 minutes
TLDR
MARKET RECAP → On Wednesday, stocks declined sharply due to disappointing reports from two major tech companies, resulting in the S&P 500 (VOO) and the Nasdaq Composite (QQQ) experiencing their worst session since 2022.
TESLA'S STOCK DIVES ON EARNINGS MISS → Tesla (TSLA) shares tanked 8% after Q2 earnings fell short, with profits down 45% year-over-year and car sales slumping 7%.
ALPHABET'S Q2 EARNINGS: AI AND AD REVENUE → 📊 Alphabet's Q2 earnings beat expectations with $84.74B in revenue, thanks to AI and cloud growth, but rising costs spooked investors.
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TODAY’S TOP NEWS
Tesla's Stock Dives on Earnings Miss
📉 Earnings Shock: Tesla’s Q2 earnings disappointed, with profits at $1.48 billion, significantly lower than analysts' expectation of $1.69 billion and down from $2.7 billion a year ago. This led to an 8% drop in premarket trading.
🚗 Sales Slump: Despite doubling revenue from energy generation and storage, and a 21% rise in services revenue, Tesla couldn't offset a 7% decline in car sales. The company’s slowest growth pace in over three years and multiple price cuts contributed to the earnings miss.
🛑 Future Concerns: Analysts warned that without new and exciting innovations from Elon Musk, Tesla might face deeper downside pressure. The market reacted to concerns over slower growth and profit margins, which dropped to 17.6%, missing the expected 18.3%.
TODAY’S TOP NEWS
Alphabet's Q2 Earnings: AI and Ad Revenue
📈 Earnings Beat Expectations: Alphabet reported earnings of $1.89 per share, slightly surpassing the $1.85 forecasted by analysts. Revenue also beat estimates, coming in at $84.74 billion compared to the expected $84.22 billion, reflecting a strong performance despite economic headwinds.
🤖 AI and Cloud Growth: Alphabet's AI initiatives and cloud services were significant revenue drivers. The company highlighted its ongoing investments in AI technology, which contributed to a 15.4% year-over-year revenue increase. However, these advancements also came with increased expenses, slightly dampening investor enthusiasm.
🛍️ Ad Revenue and Market Reaction: Digital ad sales saw moderate growth, but not enough to excite the market. Despite the earnings beat, Alphabet's stock fell over 3% in premarket trading, as higher operational costs and competitive pressures in the cloud and search sectors raised concerns about future profitability.
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