Shares of Tesla (TSLA) are soaring in premarket trading as investors buy into plans for a cheaper electric vehicle (EV), overlooking results that missed analysts’ forecasts; Meta Platforms (META) is rising ahead of the company’s earnings report after the closing bell; President Biden is set to sign into law a measure that could ban TikTok from American app stores if Chinese owner ByteDance doesn’t sell it within a year; shares of embattled aircraft maker Boeing (BA) and telecommunications giant AT&T (T) are rising after the companies topped expectations with their earnings reports. Futures on major U.S. stock indexes were pointing higher, after the S&P 500 drove a second straight day of gains Tuesday. Here’s what investors need to know today.
1. Tesla Jumps as Plan to Roll Out Cheaper EVs Outweighs Earnings Miss
Shares of Tesla (TSLA) were about 12% higher about 90 minutes before the opening bell as investors shrugged aside disappointing quarterly earnings and turned their sights on its plans to launch cheaper EVs. Chief Executive Officer (CEO) Elon Musk joined other company leaders on the company’s earnings call and said production on “more affordable” models could start as early as late this year. He also said that Tesla is “in conversations with one major automaker” to license its self-driving technology, and said some robotaxis, or “cyber cabs,” which are set to launch on Aug. 8, will be owned and operated by Tesla itself and others by the end user.
2. Meta Rises Ahead of Q1 Results With Ad Sales, AI Forays in Focus
Shares of Meta Platforms (META) were up more than 2% in premarket trading ahead of first-quarter results due after the closing bell, where the main points of investor focus will lie in the company’s advertising revenue growth and how the tech giant is integrating artificial intelligence (AI) into different segments of its business. The company recently released the latest version of its large-language model called Llama 3. Analysts project the parent company of Facebook and Instagram to post quarterly revenue of $36.27 billion, down from the previous quarter but up from the $28.65 billion it recorded in the same period in 2023, according to estimates compiled by Visible Alpha. Expectations are running high for the company, whose stock is up 40% this year through Monday’s closing level of $496.10 a share, and last quarter provided its first dividend.
3. Biden Expected to Sign Into Law Bill Forcing Chinese Owner to Sell TikTok or Face Ban
President Biden is set to sign into law a measure that could ban TikTok from American app stores, giving Chinese owner ByteDance up to a year to sell the social-media app or face having it banned from the U.S. The Senate late Tuesday approved the bill, which the U.S. House of Representatives passed last month, on the grounds that TikTok could affect national security, with China potentially able to collect intelligence on U.S. users. TikTok has said it plans to challenge the bill, while Beijing is reportedly unlikely to allow any sale of it. Banning TikTok, which has 170 million U.S. users, could potentially boost U.S. social media such as Meta and Google parent Alphabet (GOOGL), which have their own popular short-form video sites, Instagram Reels and YouTube Shorts, respectively.
4. Boeing Rises as Aircraft Maker Posts Q1 Beat, Less Cash Burn Than Feared
Shares of Boeing (BA) rose more than 3% in premarket trading after the embattled aircraft maker posted a narrower-than-expected first-quarter loss and higher revenue than analysts had forecast. Boeing reported an adjusted loss per share of $1.13, smaller than the estimated $1.76, on revenue of $16.57 billion, which topped estimates of $16.23 billion. Free cash flow of negative $3.9 billion was also narrower than forecasts. The company has struggled with a slate of safety mishaps and delivery issues ever since a door plug on an Alaska Airlines Boeing 737 Max 9 plane blew out in midair in January, which led to the announcement that CEO Dave Calhoun would be stepping down at the end of the year.
5. AT&T Shares Jump as Q1 Profit Beats Estimates Although Sales Miss
AT&T (T) shares were up more than 4% in premarket trading after the telecommunications firm posted higher-than-forecast first-quarter profit, even as revenue trailed Wall Street forecasts. AT&T reported adjusted earnings per share (EPS) of 55 cents, topping estimates, but revenue came in short at $30.0 billion, below the $30.54 billion analysts had forecast. AT&T affirmed its previous guidance for 2024 and pledged adjusted EPS in the $2.15-$2.25 range. It said that the results showed strength in the mobile business, and that it achieved “record-low first-quarter postpaid phone churn.”
