The stock market has gotten off to a good start to the new week on Monday. Major market benchmarks are up as much as half a percent, building on big gains so far in 2023 that have helped to reverse a sizable portion of 2022's losses. Investors want to see more positive news that can keep Wall Street in a good mood and stock prices moving higher.
Two stocks will be instrumental this week in sustaining the market's bullish move. Both Tesla (TSLA -1.11%) and Netflix (NFLX -0.63%) will report their latest financial results during the week, and what they say will have implications far beyond their own stock prices. Here's an early look at what you can expect from Tesla and Netflix and why the future might look even brighter.
Will the Cybertruck lead Tesla still higher?
Shares of Tesla have soared more than 150% so far in 2023, recovering dramatically from huge losses in the stock price in the previous year. As the electric vehicle pioneer keeps building out its manufacturing capacity and taking advantage of demand, investors are excited to see a new product finally rolling off the lines and potentially providing another leg up for the automaker.
Shareholder expectations for Tesla's second-quarter financials are actually fairly low. The massive ramp-up in production and deliveries that the automaker has seen over the past year should help Tesla's top line soar, with most of those following the stock expecting a 45% jump in revenue year over year. However, ongoing concerns about narrowing profit margins are expected to keep earnings in check, with the consensus forecast looking for $0.82 per share, up just single-digit percentages from year-ago results. Results are due out after the market closes on Wednesday afternoon.
But Tesla is doing what it does best this week, capturing attention with high-profile media coverage of a key event. Tesla built its first Cybertruck electric pickup at its Austin Gigafactory facility. The long-anticipated truck is likely to see only limited production for the rest of 2023, but many are looking forward to a customer delivery gathering sometime in the next few months, and demand promises to be high.
New vehicles are just one part of Tesla's ongoing growth story, and in a market hungry for companies that have obvious avenues for expansion, Tesla stock has appeal. As the company once again approaches the $1 trillion market capitalization milestone, many shareholders see more great things ahead for Tesla.
Netflix looks to show a pretty financial picture
Shares of Netflix have also done very well so far in 2023, rising more than 50%. The streaming video company has more than doubled since its mid-2022 lows, and investors are happy about how a couple of key initiatives could help support sales and profits.
Expectations for Netflix and its Wednesday afternoon financial report are even lower than for Tesla. Investors see Netflix's earnings falling more than 10% year over year to $2.85 per share, on tepid revenue growth of just 4%.
Yet two things are just starting to play out favorably for Netflix. The rollout of its advertising-supported tier has generated a new revenue stream for the company, and the results to be released will give an important reading on just how lucrative ads are for Netflix. Meanwhile, the streaming video provider's crackdown on unpaid password sharing has led to a flood of activity, with some new subscriptions providing a nice bump in an environment in which heavy competition has put pressure on subscriber counts.
Perhaps most importantly, what Tesla and Netflix say will play a big role in either confirming the upbeat mood of market participants or throwing cold water in their faces. Either way, the direction of the stock market during the last six months of the year might well depend heavily on what Netflix and Tesla say this week.
