Weekly Roundup: Latest Updates from Tesla, Netflix, Nvidia, IBM, and EVgo (July 18-22)

This week, Tesla, Netflix, and IBM released their quarterly reports, while EVgo announced a partnership with the City of Philadelphia's Department of Fleet Services. Stocks in the American semiconductor industry have been rising throughout the week. Let’s take a closer look at this news.

IBM report: FCF forecast report stunned investors

On Monday 18 July, American IT giant International Business Machines Corporation released its Q2 financial statement, which demonstrated increases in April–June in all aspects: revenue growth by 9.3% up to $15.5 billion, net profit by 5.1% up to $1.4 billion, and earnings per share by 4.1% up to $1.54.

At the same time, IBM management revised the free cash flow forecast for 2022 from $10.5 billion to $10 billion. Experts say that the FCF is a very important indicator for investors at a time of the inflation boost and the risks of a recession in the US because it shows how stable the company is.

The revision of the FCF had a negative influence on the shares of International Business Machines Corporation (NYSE:IBM): on Tuesday 19 July, the stock declined 5.25% to $130.88 per share. On Wednesday and Thursday, the downtrend slowed down a bit – 1.3% and 1.57%, respectively.

Netflix report: subscriber outflow reduced

On Tuesday 19 July, one of the world’s largest streaming services, Netflix, reported for the second quarter of 2022. Sales gained 8.6% up to $7.97 billion, net profit rose 6.7% up to $1.44 billion, and earnings per share increased 7.7% up to $3.2.

In the period April–June, Netflix lost 0.97 million subscribers, which is much lower than the predicted number of 2 million. The streaming service has announced a three-quarter subscriber outflow period for the first time ever. The company lost 1.3 million users in the US and Canada, and 0.76 million in Europe, Africa, and the Middle East. On the other hand, audience growth in the Asia Pacific region offset the decline.

Netflix is expecting Q3 revenue, earnings per share, and the number of subscribers to reach $7.83 billion, $2.14, and 221.67 million, respectively. On 19 July, after the report's release, the shares of Netflix Inc. (NASDAQ:NFLX) gained 5.61% up to $201.63 per share. The next trading sessions also demonstrated improvement with 7.36% and 3.43%, respectively.

Senate vote boosted the rise of the US semiconductor sector

On 19 July, the Senate voted to approve a slimmed-down version of its bill designed to boost the US semiconductor industry with 52 billion in subsidies and tax breaks. The goal of this bill is to reduce the shortage of chips and US semiconductor competition with China.

A straw vote was held on Tuesday, with the final vote scheduled for the next week. However, it should be noted that several senators still propose amendments to the bill.

The stocks of the American semiconductor industry started rising even before the voting. NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices Inc. (NASDAQ:AMD) have been growing for seven consecutive trading sessions in a row, and Intel Corporation (NASDAQ:INTC) has been rising for six sessions. Over this period, NVIDIA surged 19.7% up to $180.5, AMD 19.3% up to $91.09, and Intel 9.1% up to $40.61.

Tesla report: record-breaking streak is over

On Wednesday 20 July, Tesla shared its financial statement for the second quarter. The company’s revenue added 42% up to $16.93 billion, net profit skyrocketed 98% up to $2.25 billion, and earnings per share gained 57% up to $2.27. Revenue fell a bit shy of the Wall Street consensus of $17.1 billion, while EPS exceeded the expected reading of $1.81.

Tesla’s financial and operational performance declined in comparison to the previous quarter's results, which means that the car manufacturer's record-breaking streak of quarterly improvements has come to an end. This is due to obvious factors: the supply chain disruptions and production issues due to the COVID-19 outbreak in China.

Having no clear understanding of how much time the stoppage in production in China may take, Tesla converted about 75% of its digital assets into fiat currency, thereby adding $936 million in cash to its balance sheet.

On the following day after the report's release, the shares of Tesla Inc. (NASDAQ:TSLA) rose 9.78% up to $815.12 per share. It should be noted that the stock has been rising for seven consecutive trading sessions, gaining 16.6% over this period.

EVgo announced a partnership with the City of Philadelphia

On Thursday 21 July, it was announced that the electric vehicle (EV) fast charging network EVgo partnered with the City of Philadelphia's Department of Fleet Services. Through this collaboration programme, municipal vehicles from the City of Philadelphia will access charging through a discounted plan.

Philadelphia is planning to reduce its carbon footprint to zero and achieve the goal of carbon neutrality by 2050 and switch to “green transport”.

On the same day, shares of EVgo Inc. (NASDAQ:EVGO) gained 4.56% up to $9.18. The last eight trading sessions saw the stock rise, adding 48.5%.

Summary

This week, financial statements for Q2 2022 were released by IBM, Netflix, and Tesla. After the reports were published, IBM lost 5%, while the shares of Netflix and Tesla gained 5% and 10%, respectively.

The US Senate voted to approve a slimmed-down version of its bill designed to boost the US semiconductor industry with 52 billion subsidies and tax breaks. This resulted in such stocks as NVIDIA, AMD, and Intel skyrocketing.

EVgo announced a partnership with the City of Philadelphia's Department of Fleet Services. The company’s shares rose almost 5% following this news.