To The Moon

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The US stock market is in a continuous uptrend, with the technology companies' earnings reports like a fireworks display. So far, except for $NVIDIA Corp(NVDA)$ , the other six major companies have already announced their latest quarterly financial reports.

In addition to $Apple(AAPL)$ and $Tesla Motors(TSLA)$ , the latest quarterly financial reports of $Alphabet(GOOG)$ $Alphabet(GOOGL)$ $Amazon.com(AMZN)$ $Microsoft(MSFT)$ $Meta Platforms, Inc.(META)$ all show a "superior to market expectations" trend.

The stock price of Meta, which has been lagging behind in the past two years, has soared by 20% in a single day after the release of its explosive performance and a series of operations such as share repurchases and dividends. This has made it the new favorite of the market, and Zuckerberg's wealth has exceeded that of Bill Gates.

The wheel of fortune is turning. While Meta is returning to its former glory, Tesla is continuously falling, threatening to be removed from the "Magnificent Seven" team.

Looking back at the earlier Musk and Zuckerberg's "duel" and Musk's assertion on Twitter that Zuckerberg would bring the Earth under complete control through Threads. Nowadays, Musk's vision is indeed not bad. Zuckerberg and social media are not to be underestimated.

When some companies' stock prices are completely out of reach and flying directly to the sky, while Apple and Tesla's stock prices are still falling this year, how should investors choose?

Steady Apple, bid farewell to the period of rapid growth

Even though Apple is the largest and most valuable technology company in the world, its stock price has long since stopped leading the market. Instead, it has been steadily increasing in the bull market and very resilient in the weak market. It has shown a steady upward trend.

Since Buffett's heavy investment in Apple, the company has increasingly become a mature value stock rather than a growth stock. This can also be seen from its financial reports. Since the fourth quarter of 2022, Apple's revenue has declined for four consecutive quarters, and only in the fourth quarter of 2023 did it begin to grow again with a 2.1% year-on-year increase.

Fortunately, the iPhone, the core of Apple's ecosystem, still has strong product power. Despite the challenges encountered by the iPhone 15 series in the Chinese market, its overall sales volume has remained stable, which is a testament to the success of the iPhone 15 series.

Thanks to its absolute dominant and almost monopolistic business model, Apple has Buffett's "deep moat", and no matter where the future of technology goes, it will continue to grow steadily.

The latest financial report shows that Apple's active device base has now exceeded 2.2 billion units, and continues to show a steady growth trend, laying a solid foundation for future service business expansion. In the latest fiscal quarter, both Apple's transaction accounts and paid accounts reached record highs, with paid accounts increasing by double-digit percentages year on year.

Taken together, Apple's future is still reliable, and although it has passed its explosive growth stage, it is still in a phase of steadily increasing revenue.

When companies that are riding the trend—such as Tesla in the past and Nvidia now—start to slow down, it highlights Apple's advantages of steady growth. Overall, it is increasingly becoming more like traditional giant companies like Coca-Cola.

For investors who don't seek excitement and excess returns, buying low and holding long-term will never go wrong.

Tesla needs a new stimulus

The situation of Tesla is very different from Apple.

Tesla has always been the most controversial company on Wall Street, not only because of Musk's bright personality and big mouth, but also because the new energy vehicle industry has too strong policy orientation.

Unlike the Internet-related hardware and software industry, which goes through technological innovation and then realizes it in practice, the new energy vehicle industry has initially carried strong political policy game colors.

With the support of the global carbon neutrality concept, the governments of China and the United States have given strong policy financial support to the new energy vehicle industry, which has pushed the industry from scratch to a white-hot competition stage in a short time, with a strong premature aging feature.

Whether from the perspective of the industry or the development stage of Tesla itself, Tesla's stock price has reached a dormant period.

The latest 2023 Q4 financial report shows that Tesla's gross profit margin has dropped to 17.6%. This stage of decline in gross profit margin is very fatal.

Moreover, the market still expects further price cuts for Tesla cars, and the company also revealed that under the current production platform, "the cost control of hardware and software has approached its limits", which means that the gross profit margin of the company is likely to fall further.

What's more fatal is that Tesla's latest financial report clearly states that the growth rate of deliveries in 2024 is likely to be significantly slower than that in 2023, and it did not disclose its delivery target for 2025.

According to Tesla, the company is currently in between two major growth waves. The first growth wave began with the global expansion of the Model 3/Y platform, which investors should still remember clearly. The company believes that the next growth wave will be led by the global expansion of its next-generation vehicle platform.

According to Musk, the next-generation vehicle is expected to enter production in late 2025. The launch of the new model will be a difficult project, and once optimized, it may change the game rules of automobile production.

It sounds beautiful, but it also gives a clear indication that before the second half of 2025, Tesla will not have significant growth news to stimulate its stock price.

Based on this, as a new bettery energy vehicle manufacturer, Tesla will not have outstanding performance in 2024, and its current decline is reasonable.

So will Tesla's stock rise again and when will it reverse? We need to pay attention to two points. First, whether the next-generation vehicle platform launched in the second half of 2025 can be verified; secondly, whether Musk can create new technology hotspots and incorporate them into Tesla. According to Musk's previous successful history, the odds are very good.