Explore the ‘Fantastic Four Stocks’—NVIDIA, IBM, Tesla, and United Parcel Service (UPS).
NVIDIA
NVIDIA (NVDA) and the rest of the semiconductor sector rebounded from last week’s selling pressure, with the stock up 4.75% today.
This morning’s headlines included news that NVIDIA is developing a line of semiconductor chips that will not be subject to export restrictions with China.
Citigroup added the stock to its “30-day Positive Catalyst Watch list” following the disclosure, with more than a month until the business publishes its current quarter earnings.
NVIDIA shares are presently trading between two crucial trendlines, which will eventually determine the stock’s next 10- to 20% rise.
NVIDIA’s 20-day moving average is less than 2% over today’s closing price. This is a short-term directional trade for the stock. Last week, the 20-day moving average turned negative when the price fell below $120.
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A break over the 20-day moving average will entice more short-term traders to buy NVIDIA stock ahead of the company’s earnings report next month.
The stock’s 50-day moving average is about 5% lower than its current closing price.
This trendline is one of the most closely monitored trends on Wall Street, thus a break below it will boost selling pressure on the stock.
NVIDIA’s stock has not fallen below its 50-day moving average since April 2024.
A breach below NVIDIA’s 50-day moving average would aim a rapid and aggressive selloff of the stock to $100, attracting strong buying attention ahead of the company’s earnings report.
IBM
IBM stock is rising in post-session trade.
IBM (IBM) reported earnings for the most recent quarter shortly after the market closed. The company far exceeded investors’ expectations, topping earnings per share projections by $0.25.
This earnings beat was driven by a 19% increase in revenue over the same period previous year.
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IBM’s 19% sales growth is the highest it has reported in more than five years.
Management raised their free cash flow projection for the future, citing IBM’s announcement of increased business related to generative artificial intelligence. In addition, the company’s generative AI business exceeds $2 billion. That figure was closer to $1 billion in April.
IBM shares have rallied after plunging 11% following last quarter’s earnings announcement, which showed decreasing revenue. When IBM’s stock price surpassed $180 last week, shares had only recently fully recovered from their losses.
The stock is trading 3% higher after reporting positive earnings of more than $190 per share.
All of the stock’s key technical trendlines indicate a strong bullish view, with a target price of $225.
Tesla
In this afternoon’s earnings announcement, Tesla (TSLA) reiterated its message to investors.
The electric vehicle company’s shares are trading 7% lower on the release of its earnings. The reduced pricing are attributable to the corporation reinforcing the message that in 2024, its vehicle growth rate may be significantly lower than that achieved in 2023.
Despite an increase in revenue for the quarter, earnings per share exceeded Wall Street projections.
The automaker’s earnings per share were $0.52, lower than expected at $0.62.
Automotive sales fell 7% from this time last year, as Tesla struggles with industry competition and spend-weary customers. The company will hold their conference call later in the afternoon when investors will expect to hear updates on the highly anticipated Robotaxi business rollout.
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Tesla shares have increased by more than 80% since last quarter’s earnings reports, placing pressure on Tesla management to give a solid quarter and an update on the Robotaxi product, which the firm claims will continue to follow a breakthrough “unboxed” production method.
Management adds that the timeline of Robotaxi deployment is dependent on technological advancement and regulatory permission, and that they are working hard to capitalize on this opportunity given its enormous potential.
Investors should keep an eye on the stock’s 20-day moving average around $235, as a breach below this level will result in additional selling and a “buy the dip” target of $200.
United Parcel Services
United Parcel Services (UPS) shares fell 13% today after the business failed to meet expectations for its quarterly earnings.
The delivery and logistics company has rarely missed results, with the most recent miss being in April 2020.
Customers of United Parcel Services have shifted to services with lower prices and margins. This move resulted in a decrease in both sales and earnings per share in the fourth quarter.
This is not the first indication that firms are beginning to cut back on spending. Salesforce and IBM management said last quarter that some customers were taking longer to commit to new business deals, which was causing revenue to halt.
Similar to similar cases, United Parcel Services’ management guided their revenue higher in the future, implying that the economy may be experiencing a brief period of weakness.
Today’s plunge in UPS shares is the stock’s worst fall in over five years.
The break down returns the stock below $125, which should be seen as crucial support. This price was last seen in July 2020, as the economy was recovering from the first shock of the Covid-19 outbreak.
UPS stock has been trading in a bear market since April 2023, when it fell below its long-term 20-month moving average.
UPS is the third largest business in the Transportation Index ETF (IYT). Recent patterns in the Transportation index indicate that a wider bear market trend may arise in the market.
As we approach the second half of the year, investors should keep a close eye on UPS and other transportation businesses.
