The day before Fed Chair Jerome Powell’s speech at Jackson Hole, Nvidia (NVDA) and Tesla (NVDA) led the market declines. Nvidia (NVDA) fell by 3.7% and is at risk of testing the $120 support line. Tesla lost 5.65% to close at $210.66.
Between the two firms, Tesla has more risk. Markets largely ignored the electric vehicle supplier’s deteriorating profitability. Profit margins are shrinking as Tesla cuts prices for its core products. The Cyber truck should enjoy strong operating margins since consumers are willing to pay a premium.
Unfortunately, the lack of robotaxi developments is a bigger risk for Tesla shareholders. Earlier this week, Waymo, formerly known as Google Self-Driving Car Project, reported a milestone of 100,000 trips per week. This is double the levels reported in May.
Tesla needs more than camera sensor-based self-driving. It needs LiDar technology. That would enhance the sensor capabilities in ADAS systems.
In the AI hardware sector, Nvidia will trade in a range until its quarterly earnings report. Markets expect the GPU supplier to beat expectations. Demand for AI servers is not falling. In the near term, economic policies will move NVDA stock. Powell’s comments on the job market, inflation, and the Fed’s interest rate levels will matter more for the stock and the technology sector.
