Reed Hastings

Netflix puts on a show

This week, Netflix blitzes Wall Street, Meta shares hit new heights, and Tesla’s rocky road continues.

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💡 But first, the macro wrap-up:

The stock market had another strong start to the week, with the S&P 500 officially entering a bull market, hitting its highest point on Monday and continuing to climb in the following days. 

It comes as US rates are set to fall, meaning investors get less bang for their buck with savings accounts. Naturally, many have looked towards the stock market. 6/7 of the 'magnificent 7' stocks report earnings over the next two weeks as well, with market sentiment still high thanks to AI.

Netflix pops 10% after gaining 13m subs 🍿

Exceeding expectations: Analysts on Wall Street had predicted Netflix to gain 8 million subscribers this quarter. Instead, it bagged 13 million, leaving the streaming giant with 261m paying subscribers. 

  • Netflix income: Net income finished at $937m for the quarter, 17 times higher than its Q4 2022 net income. Price hikes, password crackdowns and ad-supported tiers have all been risks worth taking. 

  • Taking the Roman Reins: As a way to gain a new fanbase, Netflix announced an exclusive $5bn deal where it’ll stream WWE Raw as part of its new sports strategy. This, along with increasing its 2024 operating margin forecast by 2%, has investors excited.

Stock analyst rating stating strong buy

*Ratings are provided by analysts at Zacks, a leading investment research firm

Meta shares hit all-time high 📈

$1 trill club: On Wednesday, Meta’s market cap surpassed $1 trillion as shares hit their highest point ever. 

  • A win for customers: According to CNBC, shareholders are bullish on Meta as it seeks to strengthen its position as a heavy hitter in artificial intelligence.

  • Approaching earnings: It’s likely investors have been snapping up shares before Meta reports quarterly earnings next Thursday. 

Stock analyst rating stating strong buy

*Ratings are provided by analysts at Zacks, a leading investment research firm

Tesla slips 6% after growth slows 🏎️

Bad things come in threes: It's been a tough start to the year for Tesla. Supply issues, competition in China, and now, a disappointing earnings report. 

  • Missing targets: Tesla missed revenue targets by $430 million and stated vehicle volume growth in 2024 “may be notably lower” than last year’s rate. This comes at a time when Chinese competitor BYD is producing more vehicles than Tesla.

  • Next generation vehicle: But there was some positive news. Codenamed “Redwood”, Elon Musk announced Tesla’s "very far along on its next generation low cost vehicle". It’s rumoured to be priced at $25,000 to compete with BYD's entry-level vehicles.

Stock analyst rating saying hold

*Ratings are provided by analysts at Zacks, a leading investment research firm

What have we learned this week? 🤓

  • Netflix is targeting sport: It’s likely the streaming giant believes sports fans are its biggest opportunity to grow its paying subscriber base even higher.

  • Tech stocks continue to climb: Growth thanks to the AI boom isn’t appearing to slow down, with tech stocks like Meta still reaping rewards. 

  • Tesla’s diversifying its line up: Almost 15 years ago, Tesla entered the auto market with a Roadster worth $100,000. Now, it has its sight set on the entry-level market.

Stock announcements 👀

With earnings season in full-swing, there’s a lot going on next week for investors to keep up with. Here are the key dates to look out for:

  • Tuesday: Alphabet, Microsoft, Pfizer, Starbucks, Snap

  • Wednesday: Boeing, Mastercard, Novo Nordisk

  • Thursday: Apple, Amazon, Meta

  • Friday: AbbVie, ExxonMobil

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*Figures and ratings correct as of January 24th 2024.

Past performance does not guarantee future results. Capital at risk when investing. This content is for educational purposes only. Shares does not provide investment advice. If you are unsure about anything, please seek advice from an authorised financial advisor.

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Lucy Burgess

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