HomeLatest NewsTech News Recap: A Digest of the Latest Technological Updates

Tech News Recap: A Digest of the Latest Technological Updates

Tech Earnings Recap: Tesla’s Miss and Price Cut, Netflix’s Price Bump, Apple’s China Policy, Rivian’s Debt Offering

In this weekly Pro Recap, we cover the biggest headlines from a busy earnings week in the tech industry. Investors can stay up to date with real-time tech news by subscribing to InvestingPro. Don’t miss out on market-moving alerts!

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Tesla’s Delivery Miss and Price Cuts

Tesla (NASDAQ: TSLA) fell short of electric vehicle (EV) delivery estimates in Q3 after making upgrades to its factories during the summer. The company reported 435,059 vehicles delivered, compared to Wall Street’s expectation of 456,722. On the production side, Tesla manufactured 430,488 vehicles, below the estimated 461,992. The EV giant attributed the lower numbers to the upgrades and stated that its volume target of 1.8 million vehicles for 2023 remains unchanged. Wedbush Securities, which rates Tesla shares as Outperform, blamed the miss on longer-than-expected factory downtimes in Shanghai and Austin, Texas. They estimated that around 20,000 units were shifted to Q4. Wedbush sees positive growth ahead for Tesla, with the Model 3 refresh and Cybertruck production as potential catalysts for the stock. Despite the initial negative impact, Tesla’s shares rose 6.4% for the week.

Later in the week, Tesla announced price cuts on some of its popular EVs in the US. The Model 3 sedan’s price was reduced to $38,990 from $40,240, while the long-range Model 3 now costs $45,990, down from $47,240. The performance model and the Model Y performance sport utility vehicle also saw price reductions. Despite the price cuts, Tesla’s shares gained ground and are up 140% year to date.

Netflix Plans Price Bump

According to The Wall Street Journal, Netflix (NASDAQ: NFLX) is considering raising the price of its ad-free service in several markets globally once the Hollywood actors’ strike ends. The exact amount and timing of the price increase are yet to be determined, but the US and Canada are expected to be among the first to experience the hike. Streaming companies have been increasing prices to improve profitability without alienating customers, with major ad-free streaming services seeing a 25% rise in prices over the past year. Netflix’s shares climbed 1.2% for the week.

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Rivian’s Debt Offering and Preliminary Numbers

Rivian Automotive (NASDAQ: RIVN) faced a sharp decline in its stock price after announcing a $1.5 billion green convertible senior unsecured note offering. The offering, which includes an option for an additional $225 million, aims to extend the company’s cash runway through 2025. However, it resulted in a 23% drop in the stock price. Rivian also released disappointing preliminary Q3 sales figures, expecting them to be between $1.29 billion and $1.33 billion, slightly below market expectations. Despite the setback, Truist maintains a bullish outlook on the stock and sees the announcement as part of Rivian’s strategy for opportunistic capital raises. The shares lost 20.7% for the week.

Apple’s New App Store Policy in China

Apple (NASDAQ: AAPL) recently implemented a new policy requiring new apps to provide proof of a Chinese government license before being published on its platform. This change brings Apple in line with local competitors who have been following this policy for years to comply with China’s strict regulatory environment. Obtaining the required “internet content provider (ICP) filing” license typically presents challenges for foreign app developers, as it often requires a presence in China or collaboration with a local publisher. Apple’s previous lenient approach to ICP filings had allowed it to offer a wider selection of mobile apps compared to local rivals and contributed to its popularity in China, its third-largest market. Apple’s shares gained 3.7% for the week.

Overall, it was a significant earnings week for the tech industry, with Tesla’s delivery miss and price cuts, Netflix’s plans for a price increase, Rivian’s debt offering and preliminary results, and Apple’s new App Store policy in China. Investors can stay informed about these and other tech headlines by subscribing to InvestingPro for real-time updates.

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