- The Weekly Buzz 🐝 by Blossom
- Posts
- 📈 Tesla Soars 24% Despite a 20% Decline in Auto Sales
📈 Tesla Soars 24% Despite a 20% Decline in Auto Sales
Plus, Google jumps 9% after strong earnings amid a green week for the markets...
Maxwell Nicholson
April 27, 2025
Table of Contents
TOP STORY
📈 Tesla Soars 24% Despite a 20% Decline in Auto Sales
🤑 We’re back in the green!
😅 After early April gave us the worst 5 days in the markets since 2020, the last full week of the month delivered a much-needed turnaround, with the major indexes flying high:
The S&P 500 is up 5.6%
The Nasdaq-100 is up 7.8%
The Canadian TSX index is up 2.2%
Bitcoin is up 1.8%
📉 Now, the S&P 500 is still down ~3% over the month and ~6% for the year, but that’s a hell of a lot better than the -15% YTD performance we had as of April 8.
⭐️ The gains come just as big-tech earnings seasons kick off, with Tesla and Google both reporting earnings this week, and Meta, Amazon, Microsoft, and Apple reporting next week.
📈 Tesla ($TSLA) and Google ($GOOG) both soared after earnings, with Tesla up a massive 24% this week and Google up 9%…
🤔 But interestingly, despite the big stock increase, Tesla reported its worst quarterly results since 2022…
🤿 So, before we take a look at Google’s earnings, let’s dive into what’s going on with Tesla and why the stock jumped despite the poor earnings.
❌ Tesla Has Its Worst Quarter Since 2022
Before we get into the reasons why the stock increased, let’s take a look at the quarterly results:
❌ Revenue: $19.34B, 9% lower than last year and 9% lower than analysts estimated
❌ Automotive revenue: $14B, 20% lower than last year
❌ Net Income: $409B, 71% lower than last year
❌ 2025 Projections: In a rare move, Tesla didn’t even provide projections for the year, saying that they’ll “revisit the 2025 guidance in the Q2 update.”
The obvious reason for the drop? Elon’s heavy involvement in politics, which has turned buying a Tesla into a political statement.
Tesla acknowledged this as a culprit of the declining sales, saying:
“Changing political sentiment could have a meaningful near-term impact on demand”
(For more on this topic, see this edition of the Weekly Buzz, where I break down the impact in detail)
Tesla also pointed to the tariff uncertainty as another factor, saying:
“Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers”
📈 Despite the arguably pretty bad results, Tesla stock is soaring… but before we take a look at the reasons why, and what this means for Tesla moving forward, a quick word from this week’s sponsor Fidelity Investments!
PRESENTED BY FIDELITY INVESTMENTS
🎯 Stay on track with Fidelity All-in-One Growth ETF
🎢 We know – when markets start to imitate a theme park roller-coaster ride, you feel like you’re just holding on. Well, remember it’s all part of the investing journey. The ups, the downs and the ups again.
📊 Check out Fidelity All-in-One Growth ETF ($FGRO). This single-ticket solution is diversified across regions, market caps and investment styles to keep you on track during this roller-coaster ride, while outperforming similar products.
Source: Fidelity Investments Canada ULC and Morningstar Research Inc. All returns shown in Canadian dollars. Total returns shown using daily net asset values (NAV). All returns as at March 31, 2025. Since-inception date for FGRO is January 21, 2021. Since-inception date for VGRO is January 25, 2018. Since-inception date for XGRO is June 21, 2007. Since-inception date for ZGRO is February 12, 2019. Common inception date is January 21, 2021. By using a common inception date return, a consistent assessment can be made while seeking to reduce the impact of varying inception dates and offering a fair basis of comparison using the longest time horizon.
Disclosure: See disclosure at the end of the newsletter!
TOP STORY CONT.
📈 Despite Poor Earnings, Tesla Soars. Here’s Why…
🤔 If Tesla’s earnings were really so bad, then why is it soaring?
🚘 Well, Tesla (which is more valuable than the next 10 car companies combined) is fundamentally not valued as a car company - a point which Elon hammers home repeatedly on nearly every earnings call:
“The future of the company is fundamentally based on large-scale autonomous cars and large-scale numbers of autonomous humanoid robots. So the value of the company that makes truly useful autonomous humanoid robots and autonomous useful vehicles at scale at low cost, which is what Tesla is going to do, is staggering”
As a result, investors are far more focused on the progress towards autonomous cars and autonomous robots, and on that front, there was some really good news this week:
👨⚖️ The DOT Rolls Out a New Tesla-Friendly Framework for Self-Driving Car Regulation
Back in December, Trump’s transition team recommended scrapping a crash reporting rule that Elon says “unfairly targeted Tesla.”
While it hasn’t been scrapped fully, this Thursday, Trump’s Transportation Secretary unveiled a new ‘ innovation agenda’ that he says will slash red tape and move the US closer to a single national standard, which is very good news for Tesla.
This Administration understands that we're in a race with China to out-innovate, and the stakes couldn't be higher
🚘 Tesla’s June Robo-taxi Launch is on Track
As a result, Tesla’s plan to start selling autonomous rides in June is on track, which is arguably more important for Tesla’s stock than the auto delivery and sales numbers, with one analyst going so far as to say:
Tesla’s delivery numbers are immaterial to the majority of the current Tesla bull case
🐶 Trump is Stepping Back from DOGE
Another big factor for the stock jump was Elon’s announcement that he would be significantly cutting back his time spent on DOGE, fueling investor confidence that he would be more focused on Tesla moving forward.
“We saw a dialed in Musk on the conference call we have rarely seen in the past”
🤔 How to Think About Tesla
With the big stock jump, you might be wondering whether you should invest/continue holding Tesla, and if you’re in that boat, I’ll say this: Tesla is not trading like a regular stock.
As Elon has said himself, Tesla’s valuation is heavily detached from the fundamentals of its existing car business and is instead based on the future potential of autonomous vehicles and robots.
You should only be investing in Tesla if you have high conviction that Elon can deliver on this future, and that it will justify Tesla’s forward price-to-earnings ratio of 130x - nearly 6 times higher than the average in the S&P 500.
As for me, I exited my Tesla position on December 17 for this reason - the stock was too speculative for my liking and had received a massive 73% bump since the election. This ended up being a good choice, as Tesla has fallen 40% since then, but I’m excited to see whether Elon’s increased focus + the launch of the autonomous taxi will prove me wrong!
Ok enough Tesla, let’s quickly cover Google’s earnings before wrapping up! But first, a quick note from Investor Breakout.
💡 On Blossom, the community leaned more ‘bearish’ on Tesla with the stock ranking as the #10 Most Sold and only the #27th Most Bought this week. Despite this, Tesla remains the 9th Most Held stock in Canada and the 6th Most Held in the US.
PRESENTED BY INVESTOR BREAKOUT
🏆 5 Companies Emerge As ‘Top Picks’ Chosen By 50+ Investors
🤝 6 times a year, 100s of influential investors and public companies get together for a series of 1-1 meetings to identify rising stars in the Canadian small-cap space.
⭐️ After the meetings, the investors make a list of their top 5 most promising companies, which are shared exclusively on the Investor Breakout newsletter.
💡 You can find a full breakdown of the 5 companies and why they were chosen here, but here’s the quick rundown:
Luca Mining Corp ($LUCA): a Canadian multi-asset producer operating two 100%-owned underground mines in Mexico’s highly mineralized Sierra Madre belt.
Relevant Gold Corp ($RGC): a US-focused gold exploration company with a portfolio of five district-scale projects across a 50,000-acre plot in Wyoming, one of the world’s most mining-friendly jurisdictions.
Pine Cliff Energy Ltd. ($PNE): a Canadian natural gas and crude oil company focused on delivering long-term shareholder value through disciplined capital management, low-risk operations, and strategic acquisitions.
Integra Resources Corp. ($ITR): a growth-focused precious metals producer operating in the Great Basin of the Western U.S
Northern Dynasty Minerals Ltd. ($NDM): a Vancouver-based mineral focused on advancing the world-class Pebble Project in Southwest Alaska, which it claims is one of the largest undeveloped resources of copper, gold, molybdenum, silver, and rhenium globally.
If you’re interested in small-caps and want to get this list delivered to your inbox, you can subscribe to the Investor Breakout newsletter here!
*🚨 Note small-caps carry a much higher degree of risk than blue-chips so if you’re unfamiliar make sure you complete my Learn & Earn lesson about small-cap investing on the Blossom app!
BIG TECH EARNINGS
📈 Alphabet Up 9% After Beating Profit Expectations by 40%
In contrast to Tesla’s poor earnings, Alphabet ($GOOG) beat all expectations, reporting an incredibly strong Q1:
✅ Revenue: $90.23B, 12% higher than last year and 1% higher than expectations
✅ Earnings per Share: $2.81, 49% higher than last year and 40% higher than expectations
🎯 Drilling into the specific revenue lines:
Advertising (both YouTube and Search) grew 9.8% to $59.6B
AI-driven Google Cloud grew 28% to $12.3B
📣 Alphabet’s Ad Business Continues Strong Growth Despite AI Competitors
The biggest threat to Alphabet’s ad business has been increased competition from AI platforms like ChatGPT, so the strong growth in the ad business was an important signal to investors that Google isn’t going down without a fight.
One way Alphabet has been responding to the AI threats is through AI Overviews - an AI tool placed at the top of Google’s search page results, which reportedly now has 1.5B users per month (up from 1B in October).
🤖 Google Cloud Grows 28%, A Strong Signal for the AI Market at Large
The growth in Google Cloud - Alphabet’s competitor to Amazon Web Services and Microsoft Azure, also posted strong growth - up 28% year over year - and nearly doubling profitability.
3 years ago, Cloud was only 7% of Google’s revenues, but has since doubled to nearly 14%.
The growth in this segment is a strong signal not just for Google, but for the AI infrastructure players like Nvidia, who are heavily reliant on tech giants continuing to spend billions on GPUs to power their growing cloud businesses.
👀 To see whether this growth is unique to Google Cloud, or common across the tech giants, all eyes will be on Microsoft, Apple, Amazon, and Meta, who all report earnings this week.
🐝 (stay tuned to a special edition Weekly Buzz on Thursday where I’ll cover Microsoft and Meta and then Sunday where I’ll cover Apple and Amazon!)
FROM THE BLOSSOM COMMUNITY
⭐️ Featured Discussions this Week
👇 Click to see the full post!
Fidelity Disclosure:
Commissions, trailing commissions, management fees, brokerage fees and expenses may be associated with investments in mutual funds and ETFs. Please read the mutual fund’s or ETF’s prospectus, which contains detailed investment information, before investing. The indicated rates of return are historical annual compounded total returns for the period indicated including changes in unit value and reinvestment of distributions. The indicated rates of return do not take into account sales, redemption, distribution or option charges or income taxes payable by any unitholder that would have reduced returns. The compound growth rate chart is used to illustrate the effects of the compound growth rate and is not intended to reflect future values of a fund or returns on investment in any fund. Mutual funds and ETFs are not guaranteed. Their values change frequently, and investors may experience a gain or a loss. Past performance may not be repeated.
Investors who buy ETFs through a registered dealer may be subject to trading fees or account fees and may pay their dealer an account fee for financial advice services in addition to ETF management fees and expenses charged by Fidelity. ETFs are traded on stock exchanges. In the event of a disruption or a halt in trading of the ETF on a stock exchange or marketplace on which the ETF is traded, the ******trading price of the ETF may be affected. As a result, the disruption or halting of such trading may cause a performance variance between the ETF market price and the NAV, because the ETF may trade in the market at a premium or discount to the NAV per unit. There can be no assurance that the ETF’s trading price will behave similar to their NAV per unit. The trading price of the ETF will fluctuate in accordance with changes in a fund’s NAV, as well as market supply and demand on the exchange or marketplace on which the ETF is traded. Accordingly, the performance between the ETF market price and the NAV of the ETF may vary.
The ETFs were chosen for comparison because they closely align from an investment objectives, investment strategies and asset mix perspective. Specifically, the ETFs employ a similar strategic asset allocation approach, and all use other ETFs in a fund-of-fund structure to achieve their strategic asset allocations. Additionally, the ETFs compared share the same Canadian Investment Funds Standards Committee category; FGRO, VGRO, XGRO and ZGRO are all in the Global Equity Balanced category.
Growth portfolio comparisons
Fidelity All-in-One Growth ETF (FGRO) aims to achieve capital growth through total returns by using a strategic asset allocation approach. It invests primarily in underlying Fidelity ETFs that provide exposure to a diversified portfolio of global equity and fixed income securities. In order to achieve its investment objective, the ETF follows a neutral mix guideline of approximately 82% global equity securities, approximately 15% global fixed income securities and approximately 3% cryptocurrencies. Additionally, if the portfolio deviates from its neutral mix by greater than 5% between annual rebalancings, the portfolio will also be rebalanced. In the case of the Fidelity ETF’s allocation to cryptocurrency, if the portfolio weight exceeds twice its neutral weight, the allocation will be brought back to its neutral weight, with any proceeds being reallocated to the other Underlying Fidelity ETFs at their approximate strategic allocations. The ETF has a risk rating of medium. The MER of this ETF is 0.42% (as at September 30, 2024).
Vanguard Growth ETF Portfolio (VGRO) seeks to provide long-term capital growth by investing in equity and fixed income securities. It may do so either directly or indirectly through investment in one or more underlying funds. In seeking to achieve the investment objective (under normal market conditions), the subadvisor will strive to maintain a long-term strategic asset allocation of equity (approximately 80%) and fixed income (approximately 20%) securities. The portfolio asset mix may be reconstituted and rebalanced from time to time at the discretion of the subadvisor. The ETF has a risk rating of low to medium. The MER of this ETF is 0.24% (as at September 30, 2024).
iShares Core Growth ETF Portfolio (XGRO) seeks to provide long-term capital growth by investing primarily in one or more iShares ETFs that provide exposure to equity and/or fixed income securities. The ETF will invest in iShares ETFs that are generally expected to employ indexing strategies that provide exposure to broad-based equity and fixed income markets. The ETF will be managed in accordance with a long-term strategic asset allocation of approximately 80% equity exposure and approximately 20% fixed income exposure. XGRO’s portfolio will be monitored relative to the asset class target weights and will be rebalanced back to asset class target weights from time to time at the discretion of the advisor. Generally, XGRO’s portfolio is not expected to deviate from the asset class target weights by more than one-tenth of the target weight for a given asset class. The ETF has a risk rating of low to medium. The MER of this ETF is 0.20% (as at December 31, 2024).
BMO Growth ETF (ZGRO) seeks to provide the potential for long-term capital appreciation, primarily by investing in ETFs that provide exposure to a diversified portfolio of global equity and fixed income securities. The ETF will employ a strategic asset allocation strategy, and its asset class weightings will be approximately 80% in equity securities and 20% in fixed income securities. The ETF has a risk rating of low to medium. The MER of this ETF is 0.20% (as at December 31, 2024).
© 2025 Fidelity Investments Canada ULC. All rights reserved. Fidelity Investments is a registered trademark of Fidelity Investments Canada ULC. Third-party marks are the property of their respective owners*.*