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This week, Netflix crushes earnings, Tesla disappoints Wall Street, and Lululemon joins the illustrious S&P 500. Let’s get straight into The Weekly Scoop! 

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Netflix up 16% as it gains 8.7 million subscribers in Q3 🍿

Taking Wall Street by storm: On Wednesday, Netflix reported its Q3 earnings, which blitzed analyst expectations. Much to the joy of investors (but not Netflix subscribers), membership prices will also be going up, which is set to help the company’s revenue.  

  • 8.7 million more subs: Analysts on Wall Street had predicted Netflix to gain 5.4 million subs this quarter, but the streaming giant outperformed this by adding 8.7 million. Whilst many thought Netflix’s crackdown on sharing passwords would deter subscribers, it’s had the opposite effect and investors are loving it.

  • Price hikes: Investors love it when an in-demand company announces price hikes, as it’s a quick way to boost revenue. Whilst the increase in membership cost will only be £1 for Netflix’s basic plan, with 247 million paying subscribers, it’s an extra £247m revenue per month. 

Stock analyst rating stating strong buy

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

Tesla slides 7% thanks to lacklustre earnings 🏎️

Missing the mark: Wednesday also saw Tesla release its Q3 earnings, though investors were left feeling underwhelmed as it missed its earnings targets for the first time since Q2 2019. So, how’d this happen?

  • Hey big spender: Tesla has spent big on upgrading its factories to improve production rates. It’s also invested heavily into AI, creating one of the world’s largest supercomputers. Both initiatives should help the company prosper in the long term, but have temporarily chipped away at its net profit.

  • Cybertruck to the rescue: Tesla did say that deliveries for the highly anticipated Cybertruck are on track for November 30 this year. With over 2 million pre-orders already, it has potential to be a game changer for Tesla.

Stock analyst rating saying hold

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

Lululemon jumps 10% as it joins the S&P 500 🧘

Welcome to the club: On Monday, Lululemon shares surged as the news broke that the athleisure brand would be joining the S&P 500 index. Lululemon has replaced video game company Activision Blizzard, which has been acquired by Microsoft. 

  • S&P 500 perks: Joining the S&P 500 has some major perks. Firstly, it can boost name recognition and visibility. Secondly, any ETFs or index funds that track the S&P 500 will now automatically include the stock, which can lead to higher demand and a short-term rise in share price. 

  • Two-year high: Lululemon’s shares rose as high as $416.01 on Monday, their highest since December 2021. The stock is now up nearly 30% year-to-date, giving the company a market capitalisation of more than $52 billion.

Stock analyst rating stating strong buy

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

What have we learned this week? 🤓

  • Investors love price hikes: Netflix is unlikely to lose a significant amount of subscribers by upping its basic tier by £1. Yet, it’ll generate an extra quarter of a billion pounds by doing so. 

  • Tesla’s playing the long game: Its latest earnings report hasn’t made for pretty headlines, but with the Cybertruck and improvement to its factories, Tesla is diversifying its vehicle range whilst ramping up production. 

  • Joining the S&P 500 can impact share price: The athleisure company now sits alongside global players like Apple, Meta and Amazon in one of the most followed indexes in the world.

Stocks we're watching 👀

  • Microsoft: On Tuesday 24th October, Microsoft will release its quarterly earnings. The company is currently up 39% since January.

  • Meta: On Wednesday 25th October, Meta will report its quarterly earnings. Its sharp focus on AI and latest Ray-Ban smart glasses has investors talking, but how will shares fare post earnings call?

  • Amazon: On Thursday 26th October, Amazon will share its Q3 quarterly results. The tech giant's previous earnings report outperformed expectations and so investors will be hoping for more of the same.

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*Figures and ratings correct as of October 19th 2023.

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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James Ashoo

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James has been investing for over five years. His aim is to explain the hard stuff, easily! When he's not chewing your ear off about stocks and crypto, he'll most likely be telling bad jokes.

Harjas Singh

Harjas Singh

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Harry Harrison

Harry Harrison

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Harry is an experienced business writer, with a love for all things tech. In his free time, he enjoys reading, playing sport and winning at chess. He also loves posting inside the Shares app!