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Investors Business Daily

Dow Jones Futures: Tesla, AI Play Surge On Earnings, Meta Looms

Dow Jones futures were little changed early Wednesday, while S&P 500 futures and Nasdaq futures climbed modestly. EV giant Tesla and AI play Vertiv surged on earnings. Dow Jones giant Boeing rose as well.

A stock market rally attempt continues, but hasn't proven itself.

Meta Platforms, ServiceNow and Chipotle Mexican Grill headline earnings after the close. Meta stock rose modestly before the open while ServiceNow and Chipotle edged higher.

Nvidia rose modestly as the AI leader nears key levels.

Meanwhile, Uber Technologies and Lyft fell on fears of a Tesla ride-hailing service.

Nvidia stock and Meta Platforms are on IBD Leaderboard. Vertiv stock is on the IBD 50. Vertiv, ServiceNow and Meta stock are on the IBD Big Cap 20.

Dow Jones Futures Today

Dow Jones futures were even with fair value, even with Boeing stock providing a small boost. S&P 500 futures climbed 0.25%. Nasdaq 100 futures rose 0.7%. Tesla stock is a big S&P 500 and Nasdaq holding.

The 10-year Treasury yield climbed to 4.64%.

Crude oil futures fell slightly.

Remember that premarket action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.

Market Rally Attempt Gains Steam

Wednesday will be day three of a nascent stock market rally attempt, following strong gains in the prior two sessions.

The Dow Jones Industrial Average rose 0.7% in Tuesday's stock market trading. The S&P 500 index gained 1.2%. The Nasdaq composite leapt 1.6%. The small-cap Russell 2000 jumped 1.8%.

Investors should look for a follow-through day starting late this week. A FTD involves one or more of the major indexes showing strong gains on higher volume than the prior session.

Tesla Earnings

Tesla earnings dived 47% vs. a year earlier while revenue fell 9% to $21.3 billion, the biggest decline since 2012. Both fell short of lowered estimates. The EV giant burned $2.5 billion in cash, even as it took longer to pay its bills.

But shares surged for three reasons:

First, Tesla said production on new "affordable vehicles" will start in late 2025. CEO Elon Musk, on the conference call, said output could begin in late 2024 or "early 2025."

That eased fears that a cheap EV could be shelved for years in favor of a robotaxi.

However, the "affordable" EVs will not be next-generation vehicles but only use next-gen "aspects," built on existing production lines. Musk previously pitched huge savings from a next-generation platform using "revolutionary" manufacturing techniques.

The quick timeline and less-ambitious goals suggest Tesla may offer stripped-down EVs based heavily on the Model 3 or Model Y, but Musk declined to give more details.

Second, Tesla and Musk dusted off plans for a robotaxi ride-hailing service, though it would start with human drivers. Attracting a critical mass of riders and drivers in major cities could be expensive, competing with long-established Uber and Lyft.

Finally, Musk predicted higher Tesla deliveries in 2024. That's ambitious given the dismal Q1 deliveries and indications of a weak start to Q2.

Still, Tesla stock soared more than 11% in premarket trade. Shares rose 1.85% to 144.58 on Tuesday, rebounding from a 52-week low. TSLA stock is down 41.8% in 2024 as of Tuesday's close, the worst performer in the S&P 500.

Uber stock edged lower before the open. Lyft stock sank more than 1%. Both are below their 50-day lines after tumbling last week.

Vertiv Earnings

Vertiv earnings surged 79% to 43 cents a share, comfortably beating though growth slowed for a third straight quarter. Revenue rose 8% to $1.64 billion, slightly topping. Organic orders jumped 60% in constant currency

As a maker of coolant systems for data centers, Vertiv is a de facto AI play.

Vertiv stock skyrocketed 17% before the open, signaling a new high. On Tuesday, shares jumped 4% after testing the 50-day line on Monday.

So its earnings and guidance are a positive sign for AI demand.

Boeing Earnings

Boeing reported a smaller-than-expected first-quarter loss following 737 Max woes. Revenue fell less than expected.

Boeing stock advanced 3% in premarket trade. Shares dipped 0.8% to 169.18, near recent 52-week lows.

Meta Earnings

Analysts expect Meta earnings to jump 95% to $4.32 a share. Revenue should swell 26% to $36.14 billion, which would be the fifth straight quarter of faster growth.

Meta's online advertising growth, AI efforts and spending plans will be key.

Meta stock climbed more than 2% early Wednesday. Shares rose 3% on Tuesday to 496.10, reclaiming the 50-day line.

ServiceNow Earnings

ServiceNow earnings are expected to rise 32.5% to $3.14 a share. Revenue is seen climbing 23% to $2.588 billion.

ServiceNow is the first major software maker to report for the current earnings season. It has a number of AI-related efforts, and has partnerships with Nvidia. So results and guidance will help set the tone for software as well as AI.

ServiceNow stock edged higher in premarket action. Shares gained 2.6% on Tuesday to 740.95. NOW stock has an 815.32 buy point from a flat base, but is below a falling 50-day line after tumbling last week.

Chipotle Earnings

Chipotle earnings should climb 11% vs. a year earlier, with revenue up 13% to $2.676 billion.

CMG stock tilted higher early Wednesday. Shares rose 1.1% to 2,915 on Tuesday. Chipotle stock has a 3,023.98 buy point from a three-weeks-tight that could turn into a flat base after this week.

Nvidia Stock

Nvidia stock rose nearly 2% before the open, continuing to rebound after plunging 10% on Friday. Shares are close to reclaiming the 50-day line. NVDA stock has a consolidation buy point of 974.

Tesla on Tuesday disclosed heavy spending on AI chips for its Full Self-Driving efforts.

Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.

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