TOP STORY
🥊 Broadcom Knocks Tesla Out of the Magnificent 7

🚀 For the past 5 years, the Magnificent 7 (aka the 7 largest tech stocks in the US) have significantly outperformed the S&P 500 - growing 271% from 2019-2023, compared to 90.3% for the S&P.

🏠 The ‘Mag 7’ are household names - including Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, and until now - Tesla.

👑 But Tesla has significantly lagged behind the others in the past 3 years and has now officially been dethroned by a lesser-known tech company ‘Broadcom' ($AVGO) - a designer, developer, and manufacturer of semiconductors.

👀 So let’s take a look at Broadcom’s silent rise and whether Tesla can regain its spot in this elite and coveted list…

🤫 Broadcom’s Silent Rise

📈 Over the past 3 years, Broadcom has grown +258% while Tesla has fallen -4.5%, but despite this, the semiconductor stock is much less widely known. While Tesla has over 6,000 holders on Blossom, Broadcom has only 913.

🍎 Broadcom’s biggest customer is Apple, which uses Broadcom chips to power Wi-Fi, Bluetooth, and other components built into Apple devices.

But Broadcom has also silently become one of the world's most important AI chip companies, designing chips specifically for AI computations and selling them to OpenAI, Tesla, Google, and more.

📈 What’s driven Broadcom’s success?

🤖 The Rise of AI

• The most obvious factor driving Broadcom’s success is the same as Nvidia’s - AI.

• In the past 3 quarters alone, Broadcom’s AI-related revenue has skyrocketed from $1.5B to over $3.1B - growing from 15% of revenue to 24%.

🤝 Smart Acquisition

• But it hasn’t all just been the luck of the draw. Broadcom has made a number of smart acquisitions - recently acquiring VMware, which has “significantly enhanced Broadcom’s position in the AI space,” enabling it to sell software that complements its hardware solutions.

😎 A Great CEO

• Many analysts also say that CEO Hock Tan has been a critical element of the company’s success. At the helm since 2006, Tan has transformed Broadcom from a mid-sized semiconductor company into a global tech powerhouse.

🚀 Altogether, Broadcom has been on a meteoric rise - all the while Tesla has been struggling.

🚘 Before we dive into Tesla, its recent delivery miss, and whether it can regain its spot, a quick word from this week’s sponsor, Frontfundr!

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TOP STORY CONTINUED
🚘 Tesla Misses Deliveries - can the Robotaxi Save the Stock?

🥲 While Broadcom has been flying, Tesla has been struggling.

🚘 This week, Tesla missed delivery estimates for the third quarter in a row, delivering 462,890 vehicles, 420 shy of the 463,310 analysts were expecting.

😰 While that may seem insignificant, it means unless Tesla can pull off a miracle fourth quarter (with 516,344 vehicle deliveries), 2024 will mark the company’s first-ever year of declining sales as competition ramps up in the EV space.

🤞 In its most recent earnings on Jul 23, 2024, Tesla had its biggest slump since 2022, but has since recovered 16%, with investors crossing their fingers for big announcements on Thursday at the Robotaxi Event.

The Robotaxi is so important to the Tesla story that Elon has said:

🚖 Will the Robotaxi Turn Things Around?

The Tesla Robotaxi has been a story of broken promises. For example, in 2019, Elon claimed that “by next year for sure we’ll have over 1 million robotaxis on the road.”

And it’s not even that the tech isn’t there yet - when I was in SF recently, I traveled around the city via Waymo - Google’s self-driving car that you can call as easily an Uber. Waymo received it’s “driverless deployment permit” in August last year and recently passed 100,000 weekly rides.

All this has led to a general feeling among analysts that Tesla is falling behind.

😬 As a result, the event will be a make-or-break moment for Tesla, with Musk saying it is “the most significant moment for Tesla since unveiling the Model 3 nine years ago.”

👋 Even so, there are good reasons to be worried, this week Tesla announced the departure of it’s CIO Nagesh Saldi, just days before the event.

🍿 In any case - I'm very excited to hear everyone’s thoughts on Blossom, and I’ll be watching with popcorn on Thursday to see if Tesla can regain its spot in the Mag 7 from Broadcom!

EVENT RECAP
🎙️ Recap of the Blossom Creator Livestream!

🤩 On Friday, over 500 of you tuned into our first Blossom live stream where me, The Plain Bagel, Canadian in a T-Shirt, Brandon & Marc Beavis, Joyee Yang, and BD Investing had a lively discussion (and sometimes debate 👀) about:

• 🐣 Getting Started and Common Pitfalls

• 🥊 Stocks vs ETFs

• 💸 How Important are Dividends?

• 🌍 Geographic Diversification + China

• 🔥 And much more!

If you missed it, here is the video recap from the session! Big thank you to everyone who tuned in! 👏

SUPPORTED BY CBOE CANADA
🚨 New ETF Alert: Two New ETFs from Guardian Capital

🔥 We’ve partnered with Cboe Canada to keep you updated on all the exciting new ETF listings! Here are two new ETFs from Guardian Capital to put on your radar:

🇺🇸 GSIF - Guardian Strategic Income Fund

• GSIF seeks to generate capital gains and make monthly distributions by investing primarily in North American fixed income securities that can benefit from changes in interest rates and credit spreads. The fund aims to maintain low volatility and low correlation with traditional equity and fixed income markets.

🌍 GIQI - Guardian i3 International Quality Growth Fund

• GIQI aims to offer long-term capital appreciation by investing in equity securities listed outside of North America. The fund’s holdings are broadly diversified by issuer, sector and geography, with a bias towards mid-large capitalization stocks.

💡 You can easily find these ETFs on Blossom and add them to your watchlist from the ETF Alerts widget on the Markets tab!

FROM THE BLOSSOM COMMUNITY
⭐️ Featured Discussions this Week

👇 Click to see the full post!