Wall Street Lunch: Tesla’s Big Bull Run

Summary:

• Goldman hikes target amid Tesla’s 10-day winning streak.
• Treasury yields are under a little pressure as Fed chief Jay Powell speaks to Congress again.
• Samsung employees walk out in attempt to pressure company for higher wages and better benefits.

Listen below or on the go on Apple Podcasts and Spotify.

Goldman hikes target, but Bill Gross says Tesla trades like a meme stock. (0:16) Samsung’s ‘indefinite’ strike. (3:20) Citi says take AI profit. (4:03)

This is an abridged transcript of the podcast.

Our top story so far. Is today the day the Tesla (NASDAQ:TSLA) streak ends?

The Bulls are looking for an 11^th straight winning session, and it’s touch and go with shares slightly lower.

Goldman Sachs boosted its price target to $248 after factoring in the better-than-expected Q2 deliveries report.

Analyst Mark Delaney says: “The reduction in inventory levels is a positive sign for future pricing, all else equal. He still has a Neutral rating on the stock amid concerns about weak market conditions, Q3 production numbers, valuation, and tariff risk.

Investors have been bidding up Tesla, and it now trades higher for the year after crossing the $250 level. Short interest on TSLA stands at only 3.3% of the total float.

On Tuesday, bond guru Bill Gross said Tesla is “acting like a meme stock” with “sagging fundamentals and straight-up price action.”

There “seems to be a new meme stock every other day now,” he said, of which “most are pump and dump.” He also mentioned Chewy (CHWY), Zapp Electric (ZAPP), and “old favorite” GameStop (GME).

Speaking of winning streaks, the S&P (SP500) hasn’t had a losing session in the second half. The benchmark index is slightly higher, with the Nasdaq (COMP.IND) performing better.

Treasury yields are under a little pressure as Fed chief Jay Powell speaks to Congress again, this time before the House Financial Services Committee.

Powell said he believes that current Fed monetary policy is restrictive and that the neutral interest rate has moved up, at least in the short term.

On the data front, May Wholesale Inventories rose +0.6% M/M, in line with consensus and up from a +0.1% rise in April. On a Y/Y basis, though, inventories fell 0.5%.

Among active stocks today, Needham upgraded Carvana (CVNA) to Buy from Hold, calling it a secular growth story with a cyclical recovery kicker.

Analyst Chris Pierce says Carvana can grow unit sales and industry share by leveraging its digital-first customer experience and underutilized physical footprint.

In addition, Carvana announced the launch of new features that it said will make shopping for and buying a used electric vehicle or plug-in hybrid easier and more accessible. The streamlined process highlights vehicles that qualify for the Clean Vehicle Tax Credit in the search experience and allows eligible customers to apply for up to $4,000 in savings from the credit at checkout.

Baidu’s (BIDU) stock jumped in Hong Kong after Beijing authorities said they will support the introduction of robotaxis in ride-hailing and car-rental fleets in the city. Baidu operates the robotaxi Apollo Go. Its sixth generation was launched in Wuhan in May.

Bloomberg says draft guidelines posted by the Beijing Municipal Bureau of Economy and Information Technology indicate that autonomous vehicles should have drivers or safety officers on board or be able to intercept remotely while robotaxis are working.

Redburn Atlantic cut Spotify (SPOT) and Warner Music Group (WMG) to Sell, citing a competitive environment for the industry and structural challenges that will curb broad-based price hikes.

Redburn said, “While Spotify’s operating momentum has been impressive, consensus is simply forecasting too much growth,” while “the industry’s looming structural risks have started to show in (Warner’s) share price performance.”

In other news of note, what was initially a three-day strike has turned “indefinite” as unionized workers at Samsung (OTCPK:SSNLF) attempt to pressure the company to provide higher wages and better benefits.

Members of the National Samsung Electronics Union, which accounts for roughly 30,000 Samsung employees, say the company has not been willing to negotiate with them. Of the 30,000 employees, roughly 6,500 have walked out, including 5,000 of those in the company’s semiconductor division.

The AP says Samsung has said no disruptions to production have been incurred and that “the company remains committed to engaging in good faith negotiations with the union.” The union said there have been certain disruptions to production in an effort to get management to negotiate.

And in the Wall Street Research Corner, Citi says investors should take some gains in AI highfliers—specifically those that are enablers, such as semiconductors — to redistribute them more broadly across other AI value stocks.

Analyst Drew Pettit says, “This is predicated on our estimates of what market prices imply about future fundamental growth relative to consensus estimates, outright price action relative to historical Growth index moves, and put versus call options market pricing.”

Analysts said that, although AI is not considered a bubble, certain names “could be concerning,” with unusually strong upside price action and options markets that are “uncharacteristically pricing in greater near-term upside than downside volatility.”

Citi estimates that markets are pricing about 19–27% free cash flow growth annually for the next five years for the market cap weighted aggregate of high AI exposure stocks.

Some of the best AI performers this year are Nvidia (NVDA), Procept BioRobotics (PRCT), AeroVironment (AVAV), Helix Energy Solutions Group (HLX), Intuitive Surgical (ISRG), Pegasystems (PEGA), MicroStrategy (MSTR), and Meta Platforms (META).

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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