News and analysis

International Business Machines (IBM) income growth seemed unshakable until today, so solid that shares of this well-known company had even managed to recover to levels seen before Donald Trump's first and severe official tariff announcements in early April, but the prosperity seems undermined by the contracts that DOGE cancelled. The Department of Government Efficiency, or DOGE, under the U.S. sitting administration is indulging in massive cost cuts, which affected 15 IBM contracts amounting to about $100 million. This represents less than 1% of the order backlog in IBM’s consulting unit, according to its finance chief James Kavanaugh, who appeared to Reuters TV on Wednesday night for comments.

However, those contract cancellations created a rather deep and previously hidden trap that sent the surviving computer-age dinosaur's share price down by more than 7.5% compared to a daily range of $245-$250 per share on April 23, hours before the company's quarterly report, to below $230 in pre-market trading the following day. The news became the final straw of fretfulness to turn investors' negativity mood exactly at a time when tariff battles already clouded the crowd's outlook for the global economy.

To jolly up Wall St confidence, IBM even broke from its long-standing practice of not revealing further guidance ranges. Now its inner April to June sales projections lie in the range between $16.40 billion and $16.75 billion, well above the analyst pool's average estimate of $16.33 billion. "We felt incumbent upon ourselves to give as much transparency as possible to our investor group," James Kavanaugh commented. IBM CEOs also maintained their previous target of achieving quite a solid 5% sales surplus on a constant currency basis before the end of 2025.

Somewhat better-than-expected Q1 2025 sales, 0.9% up YoY to reach $14.54 billion vs $14.41 billion in consensus estimates could not decrease the extent of downward pressure, when it became known that IBM's consulting segment revenue fell 2% to $5.1 billion, even though this was roughly in line with nominal expectations, according to LSEG data. Earnings per share in Q1 was at $1.60, was more than twice lower than the company's absolute record at $3.92 in the Christmas quarter, but this should not be a one more cause for regrets, as the current number was also much better than preliminary analyst pool estimates of $1.40 per share, helped by high-margin software segment.

There are moments when a market sell-off, once started, cannot be calmed down overnight. Irrational reactions cannot be influenced in an instant coffee style, but soon the dust will settle. What is worrying now may soon turn into an opportunity to buy deals. One just needs to be attentive and monitor the dynamics of the asset day by day. Despite today's mess, we remain goal-oriented with the door open to IBM's next target area between $275 and $300.

What other reasoning behind a positive mid-term stance? IBM is supposed to be impacted minimally under U.S., China's or other countries' tariff horse-trading, as the company has very limited direct exposure outside the US. As an example of new opportunities for IBM's expansion is its so-called AI Book of Business, which is a cross sales combination of bookings and actual orders across various products. It stood at more than $6 billion from inception to date, as much as $1 billion up from the calculations made three months before.

For the first time ever I am making a turning glance to this chipmaker, which didn't set the world alight unlike some others did. What led me to look over there, being rather excited with my find, was alleviating tariff concerns by the company, which predicted the current quarter's delivery well above estimates. Texas Instruments (TXN) has climbed as much as 8.5% in the pre-market trading on April 24 to touch $165 a share, with a bottom at $140 this April to follow its mid-February highs above $205, offering a nice reward/risk profile of 1.6:1. This is now a prominent ratio even for the attractive semiconductors equipment industry, with room for growth of approximately 25% upwards. Even the downtrend line readings, if plotted for the entire downward correction since early November 2024, are at almost $195 per share, which is about $30 per share from today's opening price.

When analysts pressed CEO Haviv Ilan on whether customers may be stockpiling chips ahead of higher levies barriers, his answer was "I would guess that at times like this, when there is a little bit of anxiety, do you want to have a little bit more inventory on your shelves?" He believes that customer inventories are "at low levels across all end markets" while "the industrial market increased upper single digits after seven consecutive quarters of sequential decline" and the automotive market also "increased low single digits" to offset mid-teens decline in the personal electronics segment. "We are in an up cycle... there is nothing I would call specifically versus Q1 other than the continued strength in industrial... The industrial signal is now, I would say, probably five months or so... I don’t see right now at least any slowdown there", Haviv Ilan, when answering a clarifying question. His business typically gets nearly a fifth of its total sales from China, so that it could be potentially exposed to tit-for-tat tariff battle between Beijing and Washington, but the company is relying on its fabrication facility based in China if needed, Ilan added. This may help Texas Instruments to properly address China's domestic demand in case of high import levies for US-rooted chips when brought in China.

With a market cap above $135 billion, Texas Instruments not only reported much better-than-expected earnings per share for the first three months of 2025, hitting $1.28 vs the average analyst estimate of $1.06 (i.e. beating forecast by 20.75%) on quarterly revenue reaching $4.1 billion instead of $3.91 billion in consensus opinion, but also projected its Q2 profit between $1.21 and $1.47, on revenue between $4.17 billion and $4.53 billion, compared with analyst pool’s $4.10 billion. The company's CEOs marked robust demand on analogue chips to keep a strong competitive position, including China's market, a moderate level of debt but strong liquidity with a current ratio of 4.12. During the earnings call, questions were raised, of course, to know more about potential tariff impacts and Texas Instruments’ potential of adjusting its supply chain because of this challenge, but the company's management reassured that flexible manufacturing allows quick adjustments to minimize immediate tariff damage, at least.

As Haviv Ilan said on Wednesday, they "spent some time looking at previous events, including the global financial crisis, and the COVID-19 pandemic... while no two scenarios are identical, these recent examples help inform our decisions as we prepare for a range of market scenarios", so that Texas Instruments "will adapt and succeed in a world that is ever changing". Well, as a very adoptable investor, I too will likely try to adapt and thrive in the rapidly changing market dynamics and will be willing to buy this stock happily if the high prices are sustained and not wasted by this week's close.

Coin 98 (CNE) is up 5.0% this week to $0.0583, underperforming the broader crypto market where Bitcoin (BTC) has gained 8.6% to $92,238. While the crypto space remains in rally mode, momentum has paused slightly following Bitcoin's breakout above the critical $90,000–92,000 resistance. The move to $94,618, driven by easing U.S.-China trade tensions, is now being tested. A successful retest would likely renew bullish momentum, supporting further gains across altcoins.

CNE, however, is showing relative weakness. It’s hovering near key support at $0.0500, a level that has historically provided a floor but offers little cushion should prices fall further. The lack of strong support below this threshold is concerning, though it may also signal the formation of a bottom if the token stabilises here.

The Coin 98 community remains on alert amid concerns surrounding the DeFusion sell-off between April 24–25. However, there is no current indication that this event will materially impact CNE prices. For now, holding above the $0.0500 level remains critical.

Tesla stock is picking up steam, adding nearly 12% over the past 24 hours. A 4.6% gain on growing hopes before the EV maker's quarterly earnings and web call during the regular session on April 22, was followed by over 7% more in the afterhours and pre-market trading the next Wall Street morning, to touch $255 per share. However, this still leaves 22% headroom for a further highly likely upside move, even if we measure the potential by the modest standards of Reuters' average expert estimates of $311 only the day before, while targets in the $400+ range seem more realistic, even abandoning claims for re-testing historical peaks around $480, which were on the table before a general correction in tech assets.

The market crowd responded enthusiastically despite a nominal miss on both the top and bottom lines after electric car sales dropped as much as 20% QoQ vs the same period a year ago. Tesla's EPS (earnings per share) from January to March was $0.27 on revenue of $19.34 billion, while analyst pool "officially" anticipated EPS of $0.42 per share on revenue of $21.4 billion. The main point was that the numbers were substantially better than deep-end estimates, based on irrational fears.

Concerns around brand damage lessened when Tesla CEO Elon Musk commented on a web call that he would cut back his occupation in the so-called Department of Government Efficiency, or DOGE, as a close adviser to U.S. president Donald Trump. DOGE was designed "in addressing waste and fraud" to downsize the federal government but also caused a backlash to Musk's business interests sometimes, when Tesla cars encountered widespread vandalism at its showrooms, slowing normal sales. "If the ship of America goes down, we all go down with it, including Tesla and everyone else. So I think this is critical work... Those who were receiving the wasteful dollars and the fortunate dollars will try to attack me and [the] Doge team and anything associated with me... the protests that you’ll see out there, they’re very organized. They’re paid for...", Musk said, adding that his time with DOGE will "drop significantly" in the coming months. So, he is going to spend just a day or two per week on government matters "to make sure that the waste and fraud that we stop does not come roaring back" during the remainder of the president’s term, yet being more focused on Tesla "probably in next month, May". Starting next month, Musk would be "allocating far more of my time to Tesla", now that "the major work of establishing the Department of Government Efficiency is done". Many breathed a sigh of relief at these words, so that Tesla share price immediately began to move confidently upwards.

Tesla's founding father also verbally reassured the doubters: "At Tesla, we’ve gone through many crises over the years and actually been through many near death experiences... We’re probably on the ragged edge of death at least on maybe a dozen times. It’s been so many times. This is not one of those times. We’re not on the ragged edge of death. Not even close". Still, we would pay more attention to strategic announcement on product innovation and market expansion, like launching Tesla's Robotaxi in Austin, Texas, as early as in June, related to targeting millions of FSD (full self-driving) autonomous vehicles by the second half of 2025 "at scale at low cost" and 1 million Optimus humanoid robots annually by 2029. Tesla expects to have "thousands" of these Optimus robots working in Tesla factories by the end of 2025. Further localizing supply chains on the continent in which the car is built and would be sold, in both America, Europe, and Asia, is another top priority to remain the least affected car company with respect to tariffs. Musk will continue "to advocate for lower tariffs rather than higher tariffs", even though "this decision is fundamentally up to the elected representative of the people being the president of The United States".

Besides, Tesla's energy business is doing well, with the Megapack system buffering the energy at night to enable utility companies, which are buying the system to output far more total energy than would otherwise be the case. Tesla said many orders in the hopper for gigawatt and beyond batteries, but the exact number was not named, Musk only mentioned that the stationary energy storage business would scale ultimately "to terawatts per year".

In terms of robotaxis, the whole system should ultimately work in a way where a customer can pay rides fully autonomously with no one else in the car in one city, which later becomes a very scalable thing in other places. What is important, the "prosperity" of autonomous rides "move the financial needle in a significant way" is going to take effect in a material way "around the middle of next year", according to a web call transcript. That's probably why Musk also mentioned some sort of bumps and potholes of Tesla's road "immediately ahead of us", but keeping his gaze "to the bright shining, you know, sort of down on a hill". As for more precise growth figures, here's another helpful quote from Musk that sheds some light on the matter: "It’s difficult to predict the exact ramp sort of week by week and month by month, except that it will ramp up very quickly. So it’s gonna be like some basically an “S” curve where it’s very difficult to predict the intermediate slope of the s curve, but you kinda know where the s curve is gonna end up, which is the vast majority of the Tesla fleet being autonomous". You won’t find more specifics in the entire transcript.

In our view, this could mean in practice that the annual low for Tesla's stock price has probably passed, with higher peaks ahead: well above $300, but possibly below $400 for a while and bouts of increased volatility in this midterm journey as it happened many times with Tesla stock before. What Tesla has also managed to do over Q1 2025, and what can be called an outstanding achievement, which at the same time explains some decline in business for a while, was updating all its factories in the world for producing its best-selling and rather affordable car, Model Y. And this could also point to a fast increase in sales volumes soon. Well, "it’s never a dull moment these days", but "every day is gonna be exciting", according to Elon Musk, and it's hard to disagree with him at least in this matter.