TOP STORY
🚘 Rivian Up 19%, Tesla Down 8% After Delivery Numbers

🥳 Happy New Year everyone!!! 2025 is here, and the year kicked off with a roller-coaster week in the markets.

🎅 Unfortunately, Santa didn’t come this year, as the classic ‘Santa Claus Rally’ (a rise in stock prices during the last 5 trading days in December and the first 2 trading days in January), was nowhere to be found.

😰 Some see the ‘Santa Claus Rally’ as an indicator of how the year’s going to be, as in the past ~30 years, there have only been six times ‘Santa failed to show’ - and in 5 of those 6 times, the year ended in a loss.

📈 But not all hope was lost as after a 5-day streak of losses with the S&P 500 falling ~3% (the longest loss streak since April 2024), Friday gave us our first green day since Christmas with a small +1.3% jump.

👀 But for this edition of the Buzz, rather than try to ‘read the tea leaves’ of the markets (as remember, past performance isn’t always the best indicator of future results), let’s take a special look at two stocks that saw some of the biggest swings in the first week of 2025: Tesla ($TSLA) and Rivian ($RIVN).

🤿 Both EV start-ups reported on delivery numbers, with vastly different reactions from the market… let’s dive in!

📉 Tesla Slips 8% After Q4 Delivery Miss and First Ever Yearly Sales Decline

😭 I made a New Year’s resolution to talk less about Tesla in the Weekly Buzz this year, and Elon’s making me break my resolution in the very first week 😅, as with a -8.5% drop, you know we have to dig in.

💥 While Tesla was already in the headlines on New Year’s Day over the explosion of a Tesla Cybertruck outside of the Trump Hotel in Las Vegas, this wasn’t the reason for the stock drop…

📉 On Jan 2, Tesla reported its annual production and delivery numbers - announcing its first-ever drop in annual deliveries - with a -1.1% decline, compared to increases over the past 10 years ranging from +35.2% to as high as +138.1%.

⭐️ One bright spot in the otherwise weak report was China, where sales grew +8.8% and hit record highs. But the US and Europe’s weak performance more than counter-balanced the China numbers, leading to the overall decline.

😳 The annual decline is certainly a big shift for Tesla and solidifies the notion that Tesla is not being valued as a car company. As we discussed a few weeks ago, Tesla is ‘priced for perfection’ with a forward price to earnings of ~130x, over 4x the average Mag 7 company.

🤖 A huge justification for this nose-bleed valuation is Tesla’s future growth, but with vehicle delivery growth grinding to a halt, it’s become clearer than ever that to grow into Tesla’s valuation, Elon needs to make magic happen with robotaxis or the Optimus robot - and quickly. Whether Elon can pull this off, or how long until the market is willing to be patient with Elon’s promises - your guess is as good as mine.

💡 As I posted on Blossom and discussed in the Dec 15 Weekly Buzz edition, I opted to sell my Tesla position as the stock has become too speculative for my liking, but Tesla is still the 9th most held stock in Canada and the 6th most held stock in the US on Blossom, so many are still very bullish on the growth story.

In the words of an analyst at Barclays:

😎 Now before we turn our attention to the other EV-start-up making headlines this week, a quick word from this week’s sponsor and a long-time Blossom partner, Harvest ETFs!

PRESENTED BY HARVEST ETFS
🤖 An ETF That Provides Growth from Technology Giants and High Monthly Income

👀 Are you on the hunt for a leverage and technology ETF that offers enhanced growth potential and high income every month?

💸 The technology sector continues to shape and reshape our lives and deliver for investors. This ETF lets you access this burgeoning sector with the largest technology companies on the planet and provides high income every month through a covered call strategy and the application of modest leverage.

🤖 Make your hunt a success and consider HTAE. The Harvest Tech Achievers Enhanced Income ETF (HTAE) has increased its monthly cash distribution twice since the original per-unit distribution of $0.1063 in September 2023.

💡 This represents a current yield of 11.37% as of December 31, 2024.

💰 HTAE: Harvest Tech Achievers Enhanced Income ETF

• Access to core US Large Cap portfolio of 20 global technology leaders

• Covered call strategy to enhance portfolio income and lower volatility

• Modest leverage at around 25% to generate monthly cashflows and growth prospects

• Enhanced exposure to top tech stocks by investing in Harvest Tech Achievers Growth & Income ETF (HTA:TSX)

Harvest ETFs. Income Happens Here.

_{^{*Commissions, management fees and expenses all may be associated with investing in Harvest Exchange Traded Funds (ETFs). Read the prospectus before investing. The ETFs returns are not guaranteed, their values change frequently, and past performance may not be repeated. Distributions are paid in cash unless you request, that they be reinvested into Class A units of the Fund via a DRIP. If the Fund earns less than the amounts distributed, the difference is a return of capital.}}

TOP STORY CONTINUED
📈 Rivian Surges 19% After Better-Than-Expected Delivery Numbers

📈 While Tesla tumbled, another EV start-up soared. Rivian ($RIVN) also reported delivery numbers this week, and unlike Tesla, the numbers were much better than expected.

🚙 While analysts expected 13,400 deliveries, the actual number came in 6% higher at 14,200.

🔥 This is great news for Rivian after an incredibly rough 2024 - with the stock falling nearly 40% as the company continues to lose money quarter after quarter and even loses money on every car sold. 

😥 In Q3, falling delivery numbers made matters even worse, and while Rivian blamed this on a temporary component shortage, investors were spooked, and the stock continued to fall. But now, in the words of RBC Capital Markets analyst Tom Narayan:

🚧 Despite the good news, Rivian still has many challenges left to overcome. As I detailed in the November 24 edition of the Weekly Buzz:

• Rivian loses over $30,000 on every car it sells and still looks a ways off from profitability, despite the CEO’s repeated promises that this would be achieved in Q4

• As of Sep 30, Rivian’s cash balance was $6.7B, and with a cash burn of -$1.1B

👀 While the delivery numbers were a step in the right direction, the real test for Rivian will be its Q4 earnings (reported Feb 20), when we’ll see whether Rivian has been able to achieve the promised profitability or at least close the gap on its loss per car.

ALSO IN THE NEWS
🚨 Other Key Headlines This Week

A few other big stories broke this week, and while I don’t have time to dive into detail here’s the exec summary and a link to the full story!

🤖 Microsoft Announces Plans to Spend $80B on AI Data Centers

• In a blog post by Microsoft President Brad Smith, Smith says we’re in a ‘golden opportunity for American AI’ and details plans to increase spend on data centers to $80B - 60% more than the $50B spent in 2024.

• Smith likens AI to the invention of electricity and says the next four years will set the foundation for America’s economic success for the next quarter century.

• The announcement is good news for Nvidia and other AI infrastructure players as it signals the AI arms race is on track to heat up even more this year.

💡 Read the full story here

⚠️ Carvana Falls 20% After Hindenburg Research Calls It a ‘Grift for the Ages’

• Hindenburg Research is a high-profile short-selling firm known for exposing companies like Nikola - the EV start-up that turned out to be an ‘intricate fraud’ - and many others like the Adani Group in India, via its feared ‘short reports.’

• The new company in Hindenburg’s scope is Carvana ($CVNA), which Hindenburg alleges has engaged in insider trading and accounting manipulation, including $800 million in loan sales to a suspected undisclosed related party.

• Carvana says the report is ‘intentionally misleading and inaccurate’ and are the same arguments that have already been made by other short sellers seeking to profit off a stock decline.

• JP Morgan defended Carvana, saying they “do not see Carvana’s reported economics as inflated” and suggesting investors should “buy the weakness.”

💡 Read the full story here

📲 Apple Battles to Stay Relevant in China as Foreign iPhone Sales Fall 47%

• According to official Chinese data, foreign phone sales in China plunged by 47% in November - a sign of trouble for Apple which accounts for the majority of these sales.

• Apple is struggling with intense competition in China from Huawei, whose new high-end smartphones in China have proved popular with local buyers.

• In Q3, Huawei’s sales grew 42% in China, while Apple’s fell 0.3%.

• While Apple hopes its new AI Apple Intelligence features will spur a strong upgrade cycle, Apple Intelligence is not yet available in China due to complex regulations around AI in the country.

💡 Read the full story here

SPONSORED BY WEBULL CANADA
🎆 A New Year, A Milestone: Celebrating Webull Canada’s First Anniversary

🍾 As we step into 2025, we’re excited to not only ring in the New Year but also celebrate a significant milestone—Webull Canada’s first anniversary on January 2nd!

It’s been an incredible year, and we’re thrilled to continue providing Canadians with the tools and resources to invest confidently and build their futures.

Here’s what sets Webull Canada apart:

• 💸 90 Days Commission-Free Trading: Trade without commission fees on cash and margin accounts.

• 📊 Advanced Tools: Access real-time market data, detailed charts, and professional-grade analytics.

• 💹 Low 1.5% FX Rate: Exchange currencies easily with one of the lowest rates in the market.

🎉 Anniversary Offer 🎉

Start your 2025 investment journey and earn a CAD $100 Cash Reward: Make an initial deposit of CAD $100 and receive CAD $100 in rewards*

Rewards Breakdown:

• Receive 50% of the reward immediately upon deposit.

• Receive the remaining 50% after maintaining the deposit for 90 days.

Thank you for being part of our first year—we couldn’t have done it without you. Here’s to another year of growth and opportunity.

Join Webull Canada today and make this year count!

_{^{*Offer valid for new users during the promotion period. One reward per user. Webull Securities (Canada) Limited is regulated by CIRO and a member of CIPF. Explanatory brochures are available upon request or available at https://www.ciro.ca, http://www.cipf.ca}}

FROM THE BLOSSOM COMMUNITY
⭐️ Featured Discussions this Week

👇 Click to see the full post!