News and analysis

Ontology (ONT) has surged by 4.5% to reach $0.422 this week. This comes after an impressive 27.0% spike to $0.514, marking its highest level since April 2022. Such a significant increase stands out against the backdrop of 20-40% declines seen in other altcoins. Despite experiencing a correction during the Iran missile attack on Israel, which saw ONT drop by 36.0% to $0.250 on April 13, prices managed to stabilize due to both technical and fundamental factors.

The performance of Ontology in the crypto market has been remarkable. It has maintained its position above the support level at $0.400 and appears poised to continue its upward trajectory. There is potential for ONT to test the resistance level at $0.500, or even surpass it in the near future.

Shares of Tesla spiked to near $160 after showing a double-digit percentage growth in after-hours trade on Tuesday night. The most inspiring manufacturer of electric cars said it is ready to accelerate the rollout of a more affordable model, usually known as the Model 2. Tesla plants may offer these new vehicles in the first months of 2025, which is ahead of previously announced timeframes. During a conference call after the company's quarterly report, its founder and CEO Elon Musk mentioned production could be launched "early in 2025, if not late this year", compared to his own words in January when he had cited the second half of 2025. The news followed media reports, which claimed only about two weeks ago that Tesla management allegedly paused its plans for the Model 2. And now potential consumers and shareholders revived their bets on paying about $25,000 for a mass-market electric car soon.

Neither Elon Musk, nor his colleagues did not directly respond to those freeze-of-the-project gossips. They also didn't name a potentially affordable car as the Model 2, rather discussing the launch of some unidentified “new vehicles, including more affordable models,” that would “be able to be produced on the same manufacturing lines” as Tesla’s current line-up, partially using “aspects” of its current platform as well as a next-generation platform. Looking from the other side of the issue, Musk cautioned that it might lead to "achieving less cost reduction than previously expected”. Besides, Tesla mentioned a “purpose-built robotaxi product” that it planned to build with a “revolutionary” manufacturing process, without offering a timeline for its release. Reuters reported in early April that Tesla planned to continue developing a self-driving and robotaxi-based ride-hailing service, without discussing any particular timeline for this release. Musk reiterated his well known sentence that Tesla is the AI company, not just an automotive market player, this time adding that Tesla is in talks with “one major automaker” to license its driver assistance system.

These bright stories overshadowed all negative aspects, like that Tesla's Q1 2024 revenue declined to $21.30 billion from $23.33 billion YoY, compared to $25.17 billion in Q4 2023. It was also notably lower than $22.2 billion of consensus expectations. This represented the biggest decline since 2012, worse than the negative pace in the first pandemic year of 2020, according to CNBC news. Tesla deliveries degraded to 386,810 vehicles all over the world, down from 433,371 in the first three months of 2023. This happened in sync with ongoing price discounts for Tesla cars in various regions of the world. Net income lost 55% to $1.13 billion YoY, with EPS (earnings per share) amounted to $0.45 vs $0.50 expected, compared to $0.85 a year ago and $0.71 in the Christmas quarter. A pessimistic view for the rest of 2024, when the “volume growth rate may be notably lower than the growth rate achieved in 2023”, was repeated once again.

This sounds a little bit strange that all the listed obstacles did not prevent Tesla stock from soaring by 12.5% higher after the closing bell. Worries about currently weaker deliveries, especially because of Chinese competitors, may cool the ardour of newly-minted Tesla bulls and even its older fans. It still can regress to falling down again at every moment, at least before the weekly closing price would not exceed the technically critical resistance area between $160 and $163 per share.

PepsiCo reported quite a bit better figures than what the market consensus expected for the first quarter. The soft drinks and snacks giant delivered $1.61 of EPS (equity per share) in the Q1 2024 against $1.52 in Wall Street analyst pool estimates. Despite this was less than 80% of a $2.04 average income during the previous three quarters of 2023, the situation with a poorer start from January to March is very ordinary. It is repeated year after year. Instead, the focus is usually shifted to a year-on-year comparison, particularly with Q1 2023 and Q1 2022 results, and such a fair comparative study gives an unbiased observer a 7.3% and a 24.8% growth from reference plans, which were calculated one and two years ago, respectively.

The company's sales amounted to $18.25 billion vs $17.85 in Q1 2023 and $16.2 in Q1 2022, a 41.7% above the pre-pandemic record of $12.88 for the first quarters. In fact, Q1 2024 was the best in any financial aspect, including profit margins, among all initial quarters ever for the business of PepsiCo. Because of smart regional diversification, international demand for most of its sodas and snacks (Cheetos, Doritos etc), including Europe, Asia Pacific and China, served as a reliable driver for growth even though a slowdown in North America took place. Globally distributed business is now about 40% from the whole revenue of PepsiCo. New items like its Celsius energy drink flavored and Quaker instant oats help further global expansion, while Quaker Foods sales in North America lost 24% due to a sudden product recalling there because of a potential salmonella contamination risk. The company's financials are moving forward showing a very good pace, despite all these odds and temporary headwinds.

"We've had three years of ... massive consumer inflation and that has to be absorbed and I think the cumulative impact of that puts a bit of strain on the consumer. But we expect that to abate as time goes on," PepsiCo CFO Jamie Caulfield commented on the results. PepsiCo's organic volume sold is 2% lower YoY, against a higher 4% drop in Q4 2023 vs Q4 2022, yet the company got better income despite a rather reasonable price increase of nearly 5% in Q1 2024 vs Q1 2023. The way how its management coped with the inflation pressure challenge, improving efficiency and return by successfully raising selling prices and competitiveness in its product line, deserves respect at least, if not immediate appreciation of the crowd.

Based on strong and growing fundamentals, an actual 2.25% decrease in PepsiCo share price seems not absolutely logical in the first five hours after the release. The only normal explanation for this effect could lie in reaching technically a 7-month ceiling after the price climbed by almost 6% already in the previous week. Combined with edging higher two slowly in terms of the S&P 500 broad market index recovery after last Friday's nervous stress and expectations of more clear overall direction from the top giants like Meta, Microsoft, Google, Apple and Amazon, the delay in further growth of successfully reported consumer businesses like PepsiCo could be justified but temporary. If so, we consider that more jumps to retest widely expected target prices within the range of $185-$195 are only a matter of time.

The generative AI (artificial intelligence) segment's darling, NVIDIA, has suddenly provided an outstanding opportunity to buy its shares on local dips below $760 at some point of a sharp technical correction last Friday, April 19. A situational sell-off in banking and energy stocks led to another round of decline in the S&P 500 broad market indicator, but only within a couple of percentage points during the day. However, when combined with a much smaller Super Micro Computer company's stock crashing by 23%, which announced its next earnings date without providing any preliminary financial results, as well as a simultaneously negative background from Taiwan Semiconductor Manufacturing, this caused a massive profit taking among NVIDIA shareholders.

The bullish camp could be a little tired from the lasting AI rally, yet a more than 20% price discount compared to the all-time highs at $974 in March, immediately sparked a wave of renewed optimism. As a first result, NVIDIA price added more than 5% after the weekend and surfaced above $800 per share. Growing, and then easing geopolitical concerns over the Israeli-Arabian conflict also contributed to this volatility on Wall Street. One may guess that ship has sailed, yet NVIDIA stock is still trading with a pretty large discount, which makes it an attractive speculative object.

Few private investors in this market may dare to expect a re-test of substantially deeper lows for NVIDIA at $600, while chances of exceeding $1,000 per share is still being considered by all major investment houses that continue to maintain their Buy ratings for the absolute world leader in graphics chip manufacturing, without even changing it to Hold or Overbought. We adhere to exactly this point of view, feeling NVIDIA and some of its satellite chip stocks, including AMD, as the best group of assets to pick up, using each and any lower price opportunity.

A shift change, starting from May and ending in mid-summer, is another possible scenario for NVIDIA and other semiconductor stocks, but only to extend these buying chances. GPU (graphic processing units) shortages may ease to some extent during the product transitional period from NVIDIA's "old" (2022) and H100-based Hopper generation of microarchitecture to the new one on the newest Blackwell chip series. "As Blackwell ramps, starting in August, it is likely to be in short supply for several quarters," Morgan Stanley client's note says. “This still leaves Hopper doing some heavy lifting through early 2025 as we still see the majority of revenue from Hopper until next year, and there is, of course, some anxiety about a Blackwell pause... but we simply are not hearing about that right now, as our contacts assure us that Hopper demand continues to grow and that the company can manage the transition to Blackwell effectively,” the reputable group added.

Meanwhile, the Bank of America said semiconductor stocks have been "dented but not deterred", as “we are only in quarter 3 of what is usually an average 10 quarter upcycle”. “We continue to believe some semis will face a headwind until June/July when it could become apparent estimates are about to go up again and we believe this is a buying opportunity for our buy-rated names,” Citigroup echoed. If so, the last but not the least is simply that nobody abolished the principle of doing things which most billionaire funds advised the crowd to do. We believe that buying dips in NVIDIA could make investing portfolios even stronger.