To The Moon

🌟🌟🌟The US markets closed lower on Friday as the war in Israel has intensified and  crude oil prices jumped 5.8%.  US Treasury prices and spot gold rose as investors seek safe haven assets.

Next week $Tesla Motors(TSLA)$ 

 $Taiwan Semiconductor Manufacturing(TSM)$ 

$Netflix(NFLX)$ 

will report their Q3 earnings on Wednesday October 18 and Thursday October 19.

Investors will be looking at 3 main areas for Tesla.  It is likely that Tesla will report lower profit  margins in the 2nd half of the year versus the 1st half as Tesla has been cutting prices both in the US and China.

Tesla produced 430,488 vehicles in the 3rd quarter and delivered 435,059 vehicles over the same period.  The decline in volumes was caused by planned downtimes for factory upgrades.  However Tesla's 2023 volume target of 1.8 million vehicles stays the same. 

Tesla's Energy Storage and Batteries segment has been growing.  This sector has turned profitable last year and could become a secondary profit source for Tesla. 

Investors would want to know when Cybertruck will become available and more information on Tesla's full self driving software.  The Cybertruck delivery has been long awaited and would be the 5th vehicle Tesla could sell to the auto market.  The Full Self driving software could also be one of the largest source of revenue for Tesla in the future.

Tesla share price was down 1.7% on Friday but still up am impressive 135% year todate. 

Netflix's share price is down 1.5% on Friday but still up 20.5% year todate.

Netflix is the leader in the streaming space for the past 16 years since 2007.  In that time, Netflix has a vast user base.  It currently has 238 million global subscribers.  Netflix has generated USD 32 billion in revenue in the past year which has enable it to produce and acquire great shows and movies for its subscribers.

It has also implemented password lockout for non subscribers and disallowed password sharing.  A planned price hike would also boost its operating margin which is expected to reach 19% this year.

Netflix has become profitable compared to $Walt Disney(DIS)$ 

In contrast Walt Disney has reported an operating loss of USD 2.2 billion for the first 3 quarters of 2023 for its direct to consumer segment which includes Disney Plus, Hulu and ESPN Plus.

Wall Street Analysts are bullish on Netflix with a Buy rating, Target price of USD 457.50, a 28% upside potential.

Taiwan Semiconductor Manufacturing or TSMC is the world's largest Integrated Circuit foundry.  Its share price has dropped almost 10% in the past 3 months.  This is due to investors' worry over TSMC's slowing growth.  TSMC's revenue has declined year over year for 2 consecutive quarters.  It is bracing for another drop on the 3rd quarter and a 10% revenue decline for the full year.

TSMC makes the world's smallest and densiest chips but its growth has slowed down as consumers bought fewer PCs and smartphones in recent times.

Nonetheless one of TSMC's biggest customer is $NVIDIA Corp(NVDA)$ 

which uses TSMC to produce its chips.  Nvidia has seen explosive growth in its high end GPUs to process Artificial intelligence and machine learning tasks.  TSMC's CEO, CC Wei said that AI related server chips would continue to grow at a compound annual growth rate of 50% over the next 5 years.

Wall Street Analysts are bullish on TSMC with a Buy rating, Target price of USD 111.41, a 20% upside potential.

All 3 companies are market leaders in their respective fields and have wide moats.  While I am short term Bearish on Tesla, Netflix and TSMC, I am long term Bullish on them as they have exponential growth ahead. 

All eyes will be on them next week as they report their much awaited 3rd quarter earnings. 

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