Markets End On Mixed Bag Tuesday 👀 | RIVN Is Set To Turn Its First Profit 💸 | NVDA Is Back Climbing After 3 Day Slide & Investors Are Excited 📈
The market was a mixed bag through our trading session on Tuesday with the Nasdaq & Dow pulling in opposite directions, fueled by a 7% gain by after 3 days of straight losses. Lets dive right into the indexes and see how they performed:
The Nasdaq Composite finished the day up 1.3%
The S&P500 rose around 0.4%
The Dow Jones Industrial dragged ass and lost 0.8% on the day
The tech-heavy Nasdaq and S&P 500 indices took a hit on Monday, largely due to Nvidia’s decline, which put a damper on the tech-driven gains seen so far this year. Investors seem to be cashing in on their profits from AI-related stocks as the quarter comes to a close, raising concerns about whether the recent losses will continue.
Meanwhile, all eyes are on Friday’s update to the Personal Consumption Expenditures (PCE) index, a key indicator of inflation that the Federal Reserve closely watches. Federal Reserve Governor Michelle Bowman warned on Tuesday that she’s prepared to raise interest rates if keeping them steady doesn’t help bring inflation under control.
In other economic news, the S&P CoreLogic Case-Shiller report showed that home prices reached a new all-time high in April, although the annual growth rate slowed down compared to the previous month. On the other hand, a report on consumer confidence revealed some cracks in the previously strong sentiment. The Conference Board’s index came in at 100 for June, slightly below the 101.3 seen in May, which was in line with economists’ expectations.
Rivian Stock Soars as EV Maker Prepares to Turn First Profit 💸
Rivian Automotive is on a roll, with its stock climbing today as the electric vehicle (EV) maker prepares to achieve a major milestone: its first per-vehicle profit in company history. After a rocky second quarter, Rivian is implementing several cost-cutting measures to reach a positive gross margin by the end of the year.
The company is simplifying its production process, eliminating 100 steps from battery making, and removing over 500 parts from the design of its R1T and R1S models. Additionally, Rivian has added hundreds of new production robots to its manufacturing facilities, increasing the line rate by around 30%. These changes are expected to provide significant materials savings, with the company already achieving a 35% cost reduction for its vans.
Rivian’s efforts are paying off, with the company expecting to reach a positive gross margin by year-end. This news has sent Rivian’s stock soaring, with one Wall Street analyst predicting over 60% upside for the stock. Guggenheim analyst Ronald Jewsikow initiated coverage on Rivian with a buy rating and an $18 price target, representing a gain of 63% from Monday’s closing share price. The company is set to hold its 2024 Investor Day later this week, where investors will hear more about Rivian’s plans to become consistently profitable. Rivian doesn’t expect to increase production volume in 2024, but is instead focusing on retooling its factory to prepare for its next-generation R2 vehicle platform. Sales of its R2 pickup truck and SUV models are expected to begin in 2026 and will be critical for the company’s long-term success.
In other news, Rivian has announced a major partnership with German automaker Volkswagen Group, which will invest up to $5 billion in the company as part of a new joint venture to share EV architecture and software. This investment will provide Rivian with the funding it needs to develop its less-expensive and smaller R2 SUVs, set to roll out in 2026.
With Rivian’s stock on the rise and its cost-cutting efforts paying off, investors are optimistic about the company’s future. As Rivian prepares to turn its first profit, it’s clear that this EV maker is one to watch.
Nvidia Stock Rebounds After Three-Day Slide, Analyst Sees Buying Opportunity 👀
Nvidia’s stock (NVDA) surged over 5% on Tuesday, reversing a three-day decline that wiped out roughly $430 billion of the AI chip giant’s market capitalization. The stock had fallen nearly 13% since Thursday, erasing gains that had propelled it to a record-high close just a week ago.
Despite the recent sell-off, Kenny Polcari, managing partner at Kace Capital Advisors, believes the decline is overblown and sees it as a buying opportunity. “I think it’s way overblown. I don’t think people should be nervous about what’s happening with Nvidia,” Polcari told Yahoo Finance. Polcari attributes the decline to quarter-end rebalancing, where large assets are reshuffled and rebalanced. He notes that the timing of the decline is not unusual, given the end of the quarter. “I would use this weakness as an opportunity,” he added.
While Polcari wouldn’t be surprised if the stock slid another 5% or 8%, he remains bullish on Nvidia’s prospects. The company’s market capitalization climbed back to around $3 trillion on Tuesday, although it still trails Microsoft and Apple in valuation.
Nvidia has been a key driver of the S&P 500 and Nasdaq indexes, which have reached repeated record highs in 2024. The company’s CEO, Jensen Huang, has been instrumental in driving innovation in the AI chip space, and the company’s recent 10-for-1 stock split on June 10 has made its shares more accessible to investors. With the stock rebounding on Tuesday, investors are taking a fresh look at Nvidia’s prospects. Despite the recent volatility, the company’s long-term growth potential remains strong, making it an attractive opportunity for investors looking to buy into the AI chip leader.
