Musk Cries, Huang Laughs: The Secret Behind Tesla's Plunge and Nvidia's Surge as 2024 Begins

Elon Musk and Jensen Huang, as leading figures in the American tech industry, have seen their respective companies face different fortunes in the U.S. stock market in 2024. Tesla has experienced a drop of 20% this year, whereas Nvidia has seen a 60% increase. Without further ado, let’s dive into the specific reasons.

Tesla’s stock price has sharply declined in 2024, primarily due to several factors. Firstly, the market feels uncertain about the Federal Reserve’s policy direction. Although there might be expectations of a rate cut, the Fed’s stance remains unclear, leading to investor sentiment fluctuations and impacting the entire stock market, especially tech giants like Tesla.

Secondly, Tesla is facing increasingly fierce competition in the new energy vehicle market. Consumer doubts about electric vehicles, such as battery performance, insufficient charging infrastructure, and long charging times, still exist. Additionally, governments worldwide are tightening their support policies for new energy vehicles. For example, Germany has ended electric vehicle purchase subsidies earlier than expected, and the U.S. has adjusted tax benefits for electric vehicles, negatively affecting Tesla’s sales.

In the Chinese market, Tesla also faces severe challenges. As competition in the new energy vehicle market intensifies, Tesla’s price adjustment strategy is becoming less effective. Its revenue growth is slowing, and profit margins are declining, showing the difficulty in expanding market share while maintaining profitability.

Lastly, Tesla’s operating performance has not met market expectations, with both revenue and profits lower than anticipated. The company also warned that growth in 2024 could be significantly lower than the previous year, further prompting analysts to downgrade their ratings and target stock prices, increasing downward pressure on the stock price.

In summary, Tesla’s significant stock price drop reflects investor concerns over Fed policy uncertainty, intensified competition in the electric vehicle market, challenges in the Chinese market, and underwhelming company performance. This represents both a risk for investors and a potential opportunity to enter the market, depending on views of Tesla’s future and analysis of the overall market trend.

Nvidia recently reported fourth-quarter earnings that far exceeded expectations, especially in terms of net profit and revenue, achieving record highs for three consecutive quarters. Despite high expectations from investors, Nvidia’s performance far surpassed these forecasts.

Nvidia reported $22.1 billion in revenue for the quarter, a 22% quarter-over-quarter increase and a staggering 265% year-over-year increase, far exceeding analysts’ predictions of $20.41 billion. Remarkably, this quarter’s revenue even surpassed the total revenue for the entire year of 2021. The data center business, a major source of revenue, reached $18.4 billion in the fourth quarter, a 409% year-over-year increase, surpassing market expectations.

Furthermore, Nvidia’s net profit for the quarter was $12.3 billion, a 769% increase year-over-year, with an adjusted profit margin of 76.7%, also exceeding analysts’ forecasts. Adjusted earnings per share were $5.16, higher than the market prediction of $4.59. For the fiscal year 2024, Nvidia’s revenue grew by 126% to $60.9 billion. Nvidia also provided an optimistic forecast for the next quarter’s revenue, expecting it to reach $24 billion, well above market expectations.

Nvidia CEO Jensen Huang emphasized that accelerated computing and generative AI technologies are at a critical turning point, with global demand for these technologies increasing daily. As reliance on Nvidia’s products for AI development grows, the company’s revenue demand is seen as an important indicator of the entire industry’s interest. Nvidia’s collaborations with tech giants like Microsoft, OpenAI, Amazon, Meta, and Google further affirm its significant position in the AI field.

To maintain its leading position in the rapidly evolving field of artificial intelligence, Nvidia plans to launch its latest generation of chips, the B100, in 2024. Additionally, its partnership with Nokia, aimed at developing AI solutions to improve telecommunications infrastructure, shows Nvidia’s further expansion in the AI field.

With Nvidia’s market value increasing by over $400 billion this year, reaching $1.7 trillion, investors are confident in its position as a major beneficiary of the AI boom. Similarly, stocks of other chip manufacturers like AMD, Broadcom, and Marvell have also risen, indicating the widespread benefits of AI growth.

In summary, Nvidia’s significant growth is attributed to its leading position in data center and artificial intelligence technology, along with accurate predictions and rapid responses to future technology trends. As AI technology continues to advance and expand its applications, Nvidia’s potential for development remains enormous, attracting continuous attention from global investors.

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The channels for investing in U.S. stocks are numerous. The U.S. stock market, being the largest and most active financial market globally, gathers many of the world’s outstanding companies, from tech giants like Apple, Google, Amazon, and Microsoft, to consumer leaders like Coca-Cola and Nike, to innovative companies like Tesla and Nvidia. These companies not only lead the global economic trend but also represent the forefront of future technology and business models. Investors can find a wide range of investment options in the U.S. stock market to meet different investment preferences and risk tolerance. Whether seeking long-term growth or short-term profits, the U.S. stock market offers rich opportunities. However, successful investment requires a deep understanding of the market and continuous attention to the development of companies and global economic changes to make wise investment decisions.