Weekly Financial Bites

Financial Performance:

Tesla's Q3 report revealed a revenue of $23.4 billion, missing the expected $24.06 billion. The adjusted EPS was $0.66, below the forecasted $0.74, and the adjusted net income stood at $2.3 billion, falling short of the projected $2.56 billion. This marks a 37% decline in year-over-year profitability. Gross margins also slightly missed expectations at 17.9%.

Production and Deliveries:

Despite financial setbacks, Tesla remains committed to its 2023 production target of 1.8 million vehicles. The company recently announced global deliveries of 435,059 vehicles, mainly Model Y and Model 3, and aims for approximately 500,000 deliveries in the final quarter.

Future Projections:

Elon Musk expressed caution about expanding into Mexico due to global economic conditions and rising interest rates. However, Tesla confirmed that the much-anticipated Cybertruck will begin deliveries on November 30, 2023, and is expected to achieve positive cash flow within 18 months.

‍

AI Integration Benefits:

The integration of AI into gaming is expected to revitalize business models and reduce the costs of developing AAA games by an estimated 15%. Major platforms like Microsoft's Xbox and Sony's PlayStation are predicted to be key distributors of these AI technologies.
‍

Market Dynamics:

The cost-saving advantages of AI are likely to result in a 10% earnings increase for top-tier publishers like Ubisoft and Take-Two Interactive. However, smaller publishers such as Playtika may face increased competition and lower entry barriers, limiting their growth prospects.
‍

Microsoft's Financial Outlook:

Microsoft's stock has seen fluctuations, currently trading at $327 with an intrinsic value of $373.23. The company is projected to experience a 51% increase in future earnings, positively impacting its stock valuation.

‍

Financial Highlights:

Netflix's Q3 2023 earnings report exceeded Wall Street expectations, with an EPS of $3.73 against the forecasted $3.49. The company also met revenue expectations, generating $8.54 billion.

‍

Subscriber and Stock Surge:

Netflix added 8.76 million global subscribers, outpacing the anticipated 5.49 million. This growth is attributed to new strategies like an ad-supported tier and a crackdown on password sharing. The stock saw a 12% uptick in after-hours trading.

Pricing and Margins:

The company increased the U.S. prices for its Basic and Premium plans to $11.99 and $22.99, respectively. This is expected to bolster its already substantial operating margin of 22.4%.

The highly positive market sentiment indicates Netflix's strong pricing power and promising future.

‍