Count actively managed environmental, social, and governance (ESG) fund managers among the professional investors that are looking to boost exposure to the scorching hot artificial intelligence (AI) theme. It’s a sensible move not only because many AI and AI-adjacent stocks are soaring, but also because many of these companies had strong ESG credentials prior to [...]
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Shares of electric heavy truck start-up Nikola (NASDAQ: NKLA) rocketed more than 110% higher in the first three weeks of June. But that came after the stock had plummeted as investors fretted about the future of the company.
Aston Martin has reached a deal that will give U.S. electric vehicle (EV) maker Lucid Group a 3.7% stake in return for access to its "high performance" technology, the British company said on Monday, sending its shares up nearly 15%.
U.S. stock index futures slipped on Monday after a short-lived revolt in Russia over the weekend, while investors await economic data to gauge the impact of the Federal Reserve's aggressive monetary tightening on the U.S. economy.
For Immediate ReleaseChicago, IL – June 26, 2022 – Today, Zacks Investment Ideas feature highlights Enphase Energy, Inc. ENPH, Public Storage PSA, Tesla TSLA and Nvidia NVDA.
The ADR of the Chinese
EV (electric vehicle) maker Nio (
NYSE:NIO
) disappointed investors with its underperformance. The stock is down about 63% over the past year compared to an approximately 16% increase in the S&P 500 Index (
SPX
). Pressure on margins amid a cutthroat price war led by Tesla (
NASDAQ:TSLA
) and overall macro weakness in China weighed on NIO. However, the
Top Wall Street analysts covering the stock continue to show faith in its prospects and recommend a Buy.
Factors Hurting Nio
Supply-chain issues were the predominant limiting factor in Nio’s underperformance in 2022. Further, macro weakness in China took a toll on end-market demand. Adding to its problems, Tesla CEO
Elon Musk announced a series of price cuts to spur demand.
Tesla's aggressive price war will likely weigh on the margins of the other EV makers, including Nio, as they are forced to reduce prices to drive volumes.
Earlier this month, Nio announced that it would reduce prices by about $4,200 across its entire vehicle range. Also, it will no longer provide limited free battery-swapping services to new customers. The move follows the continued month-over-month decline in Nio’s deliveries.
Nio delivered 10,378 vehicles in March. Deliveries dipped to 6,658 cars in April, while they came in at 6,155 in May.
Analyst Sees Growth Ahead
Deutsche Bank analyst Edison Yu noted that the demand for premium battery electric vehicles would remain weak in 2023. However, Nio’s efforts to drive volumes and lower spending will likely support its growth.
In a note to investors dated June 16, Yu said that the company’s price cuts and rollout of new NT2.0 models would reaccelerate sales and drive volumes in the second half. The analyst maintains a Buy rating on Nio stock.
What is the Prediction for NIO Stock?
While near-term sales and margin pressure could limit the upside in NIO stock, the increased delivery of its NT2.0 products with higher average selling prices could lead to a margin recovery.
NIO stock has received a Strong Buy rating consensus based on three unanimous Buy recommendations from the Top Wall Street analysts. Further, these analysts’ average price target of $11.4 implies 35.23% upside potential from current levels.
TipRanks identifies the Top Wall Street analysts per sector, per timeframe, and against different benchmarks. The ranking reflects an analyst’s ability to deliver higher returns through recommendations. Following the ratings, TipRanks’ algorithms calculate the statistical significance of each rating, the analysts’ overall success rate, and the average return.
Disclosure
While the Global X Lithium & Battery Tech ETF (US:LIT) stated objective is to invest in companies that are involved in lithium, it also has invested in two large, prominent electric-vehicle makers -- Tesla (US:TSLA) and China's BYD (US:BYDDF) --along with Rivian (US:RIVN), a
Global automakers have touted plans to re-use electric vehicle (EV) batteries when they lose power, but competition for battery packs and cell materials, and the appetite for affordable cars cast doubt on this part of the circular economy.
Below is Validea's guru fundamental report for TESLA INC (TSLA). Of the 22 guru strategies we follow, TSLA rates highest using our P/B Growth Investor model based on the published strategy of Partha Mohanram. This growth model looks for low book-to-market stocks that exhibit cha
The past couple of years have been a bumpy ride for Tesla (NASDAQ: TSLA). After rocketing to an all-time high in late 2021, the stock plunged more than 70% in the face of high inflation, rising interest rates, and the worst stock market downturn in more than a decade. But the tid
Ford's (NYSE: F) 2023 first-quarter net sales of $41.5 billion were up 20% year over year, an acceleration from the 17% gain posted in the last three months of 2022. Adjusted earnings per share also skyrocketed 66% compared to Q1 2022. The top- and bottom-line figures handily cru
Start-up QuantumScape (NYSE: QS) gets a lot of attention as a potential disruptor. It could be one if it can successfully bring its solid-state battery technology to market. But it's not the only game in town, with just about every major automaker and plenty of other companies wo
In this week's video, I cover everything you need to know about news related to Tesla (NASDAQ: TSLA) during the week of June 19. Today's video will focus on Elon Musk's meeting with India's Prime Minister Modi, Tesla's sales numbers in Europe and China, and Tesla's potentially ne
Towards the end of 2022 and through the first quarter of 2023, the critics were out in full force against Tesla (NASDAQ: TSLA) and its potentially slowing U.S. demand. In fairness, for about 12 months the electric vehicle (EV) maker had missed sales growth estimates and was slash
We know Tesla (NASDAQ: TSLA) has been cutting vehicle prices all year, but what's the impact on the industry? So far, legacy competitors don't seem to be hurt, but EV competitors have been. In this video, Travis Hoium covers why Rivian is giving investors some signs to be worried
Tesla (NASDAQ: TSLA) is entering a transition phase from high margins to lower margins with higher competition. With that in mind, investors need to hear more about how much Tesla will prioritize growth over profits and how new vehicles are coming along. In this video, Travis Hoi
Is a new bull market here for the S&P 500? It depends on whom you ask. Yes, the index has jumped more than 20% above its previous bear market low. That's enough to qualify as a new bull market for many investors. Others, however, require that the S&P also hit a new all-ti
In today’s stock market, the three largest ETFs by assets under management are all S&P 500 (
SPX
) ETFs. The massive
SPDR S&P 500 ETF Trust (
NYSEARCA:SPY
) comes in first at nearly $410 billion.
The iShares Core S&P 500 ETF (
NYSEARCA:IVV)
comes in second with over $328 billion in assets under management, while the
Vanguard S&P 500 ETF (
NYSEARCA:VOO
) is close behind in third place with $313 billion in AUM. Combined, these three S&P 500 giants have over $1 trillion in assets under management between them.
Why are S&P 500 ETFs Appealing to Investors?
Why invest in the S&P 500? While it may not sound like the most exciting or exotic investing strategy, it is an effective one. While past performance is no guarantee of future results, the S&P 500 index itself has been a pretty good performer for a really long time. Going back to 1957, when the S&P 500 as we know it was made, the index has posted an average annualized return of 10.15%.
Harnessing the Power of the U.S.'s Top Companies
Adding to this appeal, an investment in an S&P 500 ETF gives investors exposure to over 500 of the strongest companies in the United States. An investment in an S&P 500 ETF also gives you instant diversification across sectors and industries.
SPY, the world’s largest ETF, holds 503 stocks, and its top 10 holdings account for 30.3% of the fund. Below, you can take a look at
SPY’s top 10 holdings.
Because the S&P 500 is the underlying index for all of these funds, differences between their portfolios are negligible. Also, because mega-cap tech stocks have come to dominate today's market as the largest stocks in the S&P 500, all three of these ETFs give investors significant exposure to these tech leaders, including Apple (
NASDAQ:AAPL
), Microsoft (
NASDAQ:MSFT
), Amazon (
NASDAQ:AMZN
), Nvidia (
NASDAQ:NVDA
), Tesla (
NASDAQ:TSLA
), Alphabet (
NASDAQ:GOOG
) (
NASDAQ:GOOGL
) and Meta Platforms (
NASDAQ:META
).
IVV holds 502 stocks, and its top 10 holdings also make up 30.3% of its holdings. Take a look at
IVV’s top 10 holdings below.
Lastly, VOO is unsurprisingly similar, with 504 holdings, and its
top 10 holdings make up 30.4% of the fund.
As you can see, the funds are largely the same, although there are some minor differences based on when the funds rebalance.
Dividends
SPY, IVV, and VOO all pay dividends, and they currently all yield roughly 1.5%. Because of the S&P 500's strong performance in 2023 (it's up about 14% year-to-date), this yield is a bit low for dividend investors to get excited about, but holders will not be complaining.
Long-Term Performance of S&P 500 ETFs
Unsurprisingly, because these funds all invest in the S&P 500, there is a high degree of correlation in their long-term performances. However, most importantly, all three have delivered strong long-term returns for investors.
As of the end of May, SPY had a three-year annualized total return of 12.8%, a five-year annualized total return of 10.9%, and a 10-year annualized total return of 11.9%. Meanwhile, IVV provided annualized total returns of 12.9% over three years, 11% over five years, and 12% over the last 10 years. Lastly, VOO posted annualized total returns of 12.8%, 11%, and 11.9% over the same time frames, respectively, so all three funds provided investors with very similar double-digit annualized returns over the course of the past decade.
Expense Ratios
One area where there is some difference is when it comes to the fees they charge. IVV and VOO
both have expense ratios of just 0.03%. Meanwhile, SPY comes in at 0.09%.
While 0.09% is a fantastic expense ratio in the overall ETF landscape, it is quite a bit higher than that of IVV and VOO in this comparison. Investors in SPY are paying three times as much in fees as investors in IVV and VOO.
See below for
a comparison of SPY, IVV, and VOO based on their fees as well as other criteria using TipRanks' ETF Comparison Tool, which lets you compare up to 20 ETFs at a time based on a variety of customizable factors.
Hard to Go Wrong
Investing in the S&P 500 has historically delivered strong results for investors for a long time, and investing in an S&P 500 ETF allows you to add the power and future growth of 500+ of the U.S.’s top companies to your portfolio with one investment vehicle.
As you can see in the comparison above, SPY, IVV, and VOO all feature identical ETF Smart Scores of 8. The
Smart Score is TipRanks’ proprietary quantitative stock scoring system. It gives stocks a score from 1 to 10 based on eight market key factors. The score is data-driven and does not involve any human intervention. A Smart Score of 8 or above is equivalent to an Outperform rating.
It's hard to go wrong with any of these ETFs, and picking between the three is a good problem to have. All three look like great choices for investors. Also, for investors just starting out, these ETFs are nice for instantly diversifying portfolios.
With similar portfolios and long-term track records over the past decade, the key difference between these ETFs is their fees. While all have favorable expense ratios, SPY’s comes in three times higher than that of IVV and VOO, making those the best buys.
SPY has the longest track record (it launched in 1993, long predating IVV and VOO, which launched in 2000 and 2010, respectively), the most assets under management, and incredible liquidity (it accounts for 20% of ETF trading volume on a daily basis), so there’s certainly nothing wrong with choosing it over its counterparts. Nonetheless, the fees will be a bit higher over time.
Disclosure
U.S. Federal Trade Commission Chair Lina Khan is set to testify on July 13 before the House Judiciary Committee led by Republicans who have sharply criticized her leadership of the antitrust enforcement agency, the committee and commission confirmed on Friday.
Shares of Tesla (
NASDAQ:TSLA
) have been red-hot lately,
soaring more than 137% year-to-date. Undoubtedly, as the AI wave spreads to Tesla, the stakes (and investor expectations) are climbing higher again. For years, many upbeat investors have viewed Tesla as more of a high-tech innovator than just another run-of-the-mill auto company.
CEO
Elon Musk is a genius pioneer and a visionary, and if he says robotaxis are coming, investors have every reason to believe the man. After all, those who doubted him have been left sitting on the sidelines as the
EV juggernaut saw its market cap swell in size.
Though I believe Tesla stock is worthy of a tech multiple, I'm not so sure the recent blast of
AI enthusiasm is warranted. Tesla's self-driving ambitions are really nothing new. The rise of
ChatGPT and other AI innovators may have caused money to chase anything remotely touching AI, and if those much-awaited autonomous Tesla robotaxis aren't dominating the roads in a sufficient timeframe, Tesla stock may be in a spot to backtrack on recent gains.
Elon Musk himself said Tesla's market cap is tied to autonomy. For years, self-driving cars have been one of the holy grails of AI technology. Thus far, it's proven quite difficult to shift gears to full autonomy. Though Tesla has the data advantage and competent tech talent to get the job done, the robotaxi timeline, I believe, remains as hazy as ever. Personally, I wouldn't chase Tesla stock after a hot run on old news that seems to be getting new life. For that reason, I'm taking on a neutral stance on shares of Tesla.
Tesla Stock: AI Hype May be Getting Out of Hand
Tesla could have a lot to gain in the AI race if it can get self-driving tech where it needs to be. Just ask
Cathie Wood, who touted Tesla as "one of the biggest AI opportunities out there." Tesla certainly deserves some "AI premium" on its share price, but how much remains the billion-dollar question.
Tesla isn't the only competitor in the space. AI kingpin and ad-tech behemoth Alphabet (
NASDAQ:GOOGL
) has Waymo, which may or may not be in a spot to pull ahead of Tesla and the rest of the pack.
The real question is whether an AI-heavy software company can outcompete an auto company with unmatched tech savviness. I'm unsure which firm has the edge at this juncture. However, I do find the valuation of GOOGL stock (27.4 times trailing price-to-earnings) to be far more attractive.
At writing, TSLA stock trades at 77.8 times trailing price-to-earnings. That's steep for an auto company or a technology company. At $256 and change, there's a pretty high bar set ahead of Tesla stock. With a high bar comes a high risk of coming short.
Tesla Looks Like a Top Firm That Could Solve Autonomous Driving
Even if Tesla is one of the first to solve the autonomous-driving problem, rivals may not be too far behind. Further, the race for full-autonomous driving may not be over once we have self-driving cars dominating the streets. Though I do not doubt Tesla's autonomous-driving tech, it's hard to tell whether the robotaxi service will take off in just a few years or if it'll take a while longer than that.
Without greater clarity on the autonomy timeline, I find it tough to value Tesla stock. RBC analyst
Tom Narayan believes 70% of Tesla's valuation is centered on autonomous tech. Indeed, there could be a lot to gain if Tesla is able to keep up with such upbeat analysts.
After such an impressive run, even Cathie Wood — one of Tesla's biggest believers — appears more than willing to trim her stake. Just last week, news broke that ARK Invest sold around
393,000 worth of Tesla shares.
Is TSLA Stock a Buy, According to Analysts?
Turning to Wall Street, TSLA stock comes in as a Moderate Buy. Out of 31 analyst ratings, there are 14 Buys, 12 Holds, and five Sells. The
average Tesla stock price target is $216.46, implying downside potential of 15.6%. Analyst price targets range from a low of $85.00 per share to a high of $335.00 per share.
The Bottom Line on TSLA Shares
It's not just AI hype that's driven up Tesla stock of late. Undoubtedly, excitement over the company's charging network and bullish analyst notes have also been rally fuel. For the most part, though, I believe any additional upside from here could be the result of AI FOMO (fear of missing out).
Disclosure