Please ensure Javascript is enabled for purposes of website accessibility

Tech Stocks This Week: Netflix, Inc.'s Price Increase, Google's Product Launch, and More

By Daniel Sparks - Oct 7, 2017 at 3:03PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Netflix, Alphabet, and Tesla stole the show this week. Here's what investors need to know.

Tech didn't fail to deliver some interesting fodder for investors this week. Netflix (NFLX 5.03%) decided that customers are willing to pay more, Alphabet's (GOOGL 5.11%) (GOOG 5.20%) Google launched a huge new lineup of its Made by Google products, and Tesla's (TSLA 4.53%) Model 3 production missed management's target by a mile.

Here's what investors should know.

Netflix raises prices

On Thursday, streaming-TV giant Netflix surprised investors when news surfaced that the company planned to raise prices on several of its plans. Beginning in November, it will charge $10.99 a month for its standard service, which currently costs $9.99 a month and allows for two screens to use the service simultaneously. In addition, the monthly price for Netflix's four-screen, top-tier plan will increase from $11.99 to $13.99, Mashable reported. The basic plan, which allows for only one screen to watch Netflix at a time, is expected to remain the same, at $7.99.

Investors loved the news. Shares shot up to record highs on Thursday and continued to climb on Friday. The stock rose a total of 7% between when the news surfaced and the end of the trading day on Friday.

NFLX Price Chart

NFLX Price data by YCharts.

Netflix confirmed the price increase with press, citing more quality content, new product features, and an improved overall experience as reasons for the higher prices. The price increase will occur in the U.S. and customers will begin to be notified as early as Oct. 19.

Alphabet goes all in on hardware

Just after the news of Alphabet's purchase of part of HTC's business, Google proved it's not messing around with its growing hardware business. It launched a total of eight new products last week (nine if including the Pixelbook Pen made for Google's new Pixelbook).

Google Pixelbook with its folding keyboard in various positions

Google Pixelbook. Image source: Google.

Some of the most notable new products included second-generation Pixel smartphones, a thin and light Pixelbook laptop with a keyboard that can fold underneath, and Pixel Buds to compete with Apple's AirPods.

Alphabet's hardware business has been thriving, serving as one of the primary drivers in the "Google other" segment, whose revenue was up 42% year over year in Alphabet's second quarter.

Tesla whiffs on Model 3 production

Electric-car maker Tesla made headlines during the week when the company released its third-quarter deliveries. Overall deliveries were higher than expected; Tesla even raised its full-year guidance for combined Model S and X deliveries. But where Tesla ran into trouble was the production of its important Model 3.

Tesla said it produced only 260 Model 3 -- 1,240 short of its target of 1,500 units. The company cited production bottlenecks for the shortfall but said it is confident it can address these bottleneck issues "in the near-term."

These Model 3 manufacturing bottlenecks are apparently a major priority at Tesla right now, as it said on Friday that it is delaying its semi truck unveiling partly so it can divert resources to fix Model 3 production (the company also wants to transition more resources to Puerto Rico hurricane relief efforts).

Investors will be on edge until Model 3 production picks up. Tesla management has said it believes that it can increase total vehicle production from a run rate of about 100,000 units today to 500,000 units next year, and it expects most of this growth to come from Model 3.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$190.85 (5.03%) $9.14
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,359.50 (5.11%) $114.66
Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$737.12 (4.53%) $31.91
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,370.76 (5.20%) $117.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.