US Stock Market Review for April 22
Today, the market experienced another V-shaped reversal during and after the trading session, but it was an inverted V this time!
📈 During the session, the S&P and Nasdaq, influenced by yesterday's TACO, both hit new closing highs.
📉 After hours, Trump's stance on Iran became tough again, WTI crude oil futures rose again, returning above 90, and S&P and Nasdaq futures began to give back gains.
Now, the intraday and after-hours sessions can almost be viewed as two separate trading days 🤷🤷♀️🤷♂️
On individual stocks:
TSLA$Tesla(TSLA.US)
Earnings report: rose first then fell, ending flat.
Q1 results exceeded expectations, the European market is starting to recover, progress on AI infrastructure, Robotaxi expansion, and Optimus production line setup is smooth.
Here comes the important part:
Significantly increased full-year capital expenditure, expected to exceed $25 billion, free cash flow turned negative. Musk said this will bring very significant returns in the future.
Last quarter, four major tech companies significantly increased capital expenditure, and their stock prices performed poorly. Let's see if Tesla can buck the trend.
Short-term price movements (long/short) aren't very meaningful; a pullback below 360 would be a good swing trading opportunity.
NOW$ServiceNow(NOW.US)
Plunged 12% after hours.
As the 10th largest component of the software sector, it dragged other component stocks down, threatening to derail the recent rebound trend in the software sector.
Earnings: Q1 revenue met expectations; Q2 guidance slightly exceeded expectations, full-year guidance was slightly raised.
However, forward-looking profit margins were significantly below expectations, with the CEO citing delays in local deployments due to conflicts in the Middle East.
From the earnings report, there was basically no sign of the changes or improvements AI has brought to the company. Combined with poor margins, this fails to dispel market concerns about AI's impact!
The stock price has nearly halved this year, valuations are low, but if you're not particularly confident in this company's business, be cautious about bottom-fishing.
MSFT$Microsoft(MSFT.US)
If NOW triggers a collective correction in software stocks, Microsoft is the best choice for bottom-fishing, and of course, the current market price isn't expensive either.
Microsoft's software ecosystem is a huge cash flow generator. Azure and OpenAI are both in the first tier of the AI narrative, and its diversified business is nothing to worry about.
ASML$ASML(ASML.US)
TSMC will postpone the deployment of ASML's latest lithography machines until after 2029, because they are too expensive, and will explore ways to increase computing power based on existing equipment.
As ASML's largest customer, this is expected to affect ASML's future growth rate, causing a 4% intraday plunge.
However, I expect the short-term impact on earnings won't be too significant, and after-hours trading recovered the losses. When looking at ASML, it's best to focus on the forward-looking guidance just given in last week's earnings report; the current market price is already overvalued!
Finally, a review of the stocks mentioned two weeks ago that were supposed to hit new highs:
AMD, AVGO, TSM, AMZN, NVDA, GOOG, ASML.
Last week's prediction was that AVGO would be the second to hit new highs after AMD, looks like that guess was right.
Today, guessing the third one—AMZN😆
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