Tesla’s automotive profits jump to 32.9% in Q1

In today’s top stories, Tesla’s Q1 earnings set a new record, rising defence spending benefits Palantir and Shopify is in talks to make its largest ever acquisition. Meanwhile, Bill Ackman sells his stake in Netflix, and we hear from Jeroen Blokland in this week’s Opto Sessions podcast.

Tesla sets records.

The electric vehicle maker announced record sales, profits and margins when it announced its first quarter earnings this week. Revenue came in at $18.76bn, while gross automotive margins jumped to 32.9%. Increased vehicle pricing was behind this boost. During the announcement, made on Wednesday, chief executive Elon Musk also said the company is expecting to hit production growth of 60%. Musk also offered a teaser of a robotaxi product that would offer low-cost mileage and “exciting innovations.”

Keeping Lithium price in check.

Tesla founder Elon Musk has resurrected a two-year-old plan to start mining Lithium to fight back against rocketing prices. While some analysts are arguing that EV makers will need to get involved in mining if they want to manufacture at scale, which could ramp up the competition for mining companies, others expect that the surge in EV sales and the resultant rise in lithium demand will benefit all players in the industry.

Palantir bounces back.

Investment advisor RBC reckons that, as Russia’s invasion of Ukraine drags on, government spending on defence will increase around the world, reports Seeking Alpha. This is good news for Palantir: analyst Rishi Jaluria thinks the AI and surveillance firm’s share price could hit $12, as he boosted his previous $9 price target. Palantir will release Q1 earnings on 9 May, when it is expected to report a 30% year-on-year sales increase to $443m, according to Zacks.

Opto Sessions: Jeroen Blokland.

While a recession in the US looms large and inflation is likely to remain high for at least the short term, Jeroen Blokland told Opto Sessions he believes a multi-asset approach is the best way to go. The most straightforward way to incorporate risk and return is to combine different asset classes, he said. “Why not eat the only free lunch that is out there in financial markets and that is also even if you have a very aggressive risk profile, it still pays off to have at least a little bit of diversification.”

Small-cap value stocks.

While volatile market conditions in recent weeks have helped stocks to look more attractive, many share prices are still trading above their fair value. Earnings season could see companies issue warnings about their outlooks amid the impact the war in Ukraine is having on revenue and profit. However, small-cap stocks in sectors such as wellness, home furnishings and hospitality could be undervalued.

Ackman ditches Netflix.

Just three months after billionaire investor Bill Ackman acquired a $1.1bn stake in the streaming platform, he has sold it all at a $400m loss, reports the Financial Times. Netflix has not had a good week, having seen its share price plunge 40% after it revealed that its subscriber numbers are now declining. Its market cap now sits at around $100bn, far below the $310bn value it boasted in October 2021.

Fast shipping with Shopify?

According to Bloomberg, the Canadian ecommerce firm is in talks to buy Deliverr, a startup that helps merchants using Amazon, eBay and other marketplaces deliver products to customers in two days or less. The deal could be worth $2bn and, if it goes through, would be Shopify’s largest ever acquisition. It would also be a significant milestone for Shopify, which has always relied on third parties to provide faster shipping.