Trending tickers: Tesla, Alphabet, LVMH, Spotify and IBM

Tesla shares were muted in pre-market trading after climbing 5% during Monday’s session as the EV maker is set to report its second-quarter results after the US market close on Tuesday.

Tesla’s profit margins are expected to have fallen 0.9% YoY to $24.7bn (£19.12bn) as the company struggled with the delivery figures.

Earnings per share (EPS) are estimated to have dropped 41% YoY to $0.46. Over the last couple of years, Tesla has cut vehicle prices multiple times, which has taken a toll on its once industry-leading margins.

Meanwhile, CEO Elon Musk said the company will have humanoid robots in production for internal use in 2025.

“Tesla will have genuinely useful humanoid robots in low production for Tesla internal use next year and, hopefully, high production for other companies in 2026,” Musk said in an X post.

Alphabet (GOOGL)

Google owner Alphabet is expected to report a fourth straight quarter of double-digit revenue growth on an uptick in the advertising market. It will announce its results to the markets after the US closing bell on Tuesday.

The company’s stock is near all-time highs and continues to benefit from strong Search and YouTube revenue growth. Google’s progress in GenAI, coupled with better-than-expected ad revenue, has boosted investor sentiment.

Read more: Stocks to watch this week: Tesla, Microsoft, Alphabet and Amazon

“We view current valuation as undemanding given the strength of the underlying digital ad market and the considerable optionality for Google across advertising and cloud, as AI monetization continues,” wrote Wedbush analyst Scott Devit.

At its recent price of $182, Alphabet goes for 21-times the consensus forecast for 2025 earnings.

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Google on Monday scrapped plans to remove user-tracking cookies from its Chrome browser, under pressure from advertisers who use cookies’ data to target advertisements.

Google’s talks to acquire the cybersecurity startup Wiz for a planned $23bn have fallen apart, according to the Wall Street Journal.

Investors are closely watching the upcoming earnings report from Louis Vuitton, set to be released after the market closes. This report is anticipated to offer critical insights into the current state of consumer demand in China.

On Monday, luxury stocks experienced a lift following unexpected rate cuts by the Chinese government. Despite this boost, the luxury sector has been grappling with a prolonged period of reduced spending in China, the world’s second-largest economy. Louis Vuitton’s performance will be a key indicator of whether this trend is beginning to reverse.

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LVMH, The world’s largest luxury-goods conglomerate, is anticipated to report revenues of €42.22bn (£35.56bn/$45.95bn) for the first half of the year, according to a poll of 16 analysts compiled by Visible Alpha. This figure is slightly down from the €42.24bn reported in the same period last year.

Analysts predict that the French luxury firm, which includes brands such as Dior and Louis Vuitton, will post a net profit of €7.45bn, a decline from the previous year’s €8.48bn.

Spotify (SPOT)

Spotify is scheduled to report its fiscal second-quarter earnings on Tuesday before the US market opens. Wall Street anticipates that the music streaming company will once again achieve a profit on an adjusted basis, reflecting the impact of its recent “efficiency” strategy .

“Spotify is at an inflection point with recent price changes highlighting its commitment to expanding gross margin and profit,” noted Geetha Ranganathan, senior media analyst at Bloomberg Intelligence.

The company is expected to report revenue of €3.81bn, up from €3.18bn in Q2 2023. Adjusted earnings per share are projected to be €1.04, an improvement from the adjusted loss of €1.55 reported in the same period last year. Total monthly active users are forecasted to reach 631 million, compared to 551 million in Q2 2023, while premium subscribers are expected to increase to 245 million from 220 million.

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The stock has surged, with shares gaining more than 50% since the start of the year and up about 70% on a yearly basis, Yahoo Finance writes.

“We continue to see a long runway for growth in music streaming,” Morgan Stanley analyst Ben Swinburne said in a note published earlier this month.

“This view is supported by paid subscription streaming penetration of global smartphones of just ~15% at year-end 2023 and service offerings that remain in our view underpriced when compared to historical consumer spending on music.”

Shares of International Business Machines (IBM) rose on Tuesday after an analyst recommended buying the stock ahead of its upcoming earnings report on Wednesday, citing several positive factors.

Evercore ISI analyst Amit Daryanani added IBM to the firm’s Tactical Outperform list, maintaining a price target of $215. This target represents an 18% increase from Monday’s closing price of $182.88.

“Our call is based on improving fundamentals in Red Hat and Consulting, combined with the stock’s relatively muted performance compared to the broader market,” Daryanani wrote in a research note. “Since IBM last reported earnings on April 24, the stock has been flat while the market is up 11%, suggesting that expectations could be tempered.”

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Analysts expect the company to announce earnings of $2.17 per share for the quarter. IBM’s Q2 sales are expected to be slightly up to $15.58bn versus $15.48bn in the prior-year quarter.

IBM has surpassed earnings expectations for five straight quarters posting an average earnings surprise of 5.2% in its last four quarterly reports.

Goldman Sachs analyst James Schneider wrote in a note in late June that IBM stock could continue to “rerate higher as software business mix improves, and the company continues to demonstrate consistent financial performance.” Schneider rates IBM stock at Buy with a $200 price target.

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