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Breakfast News: Tesla Spies India Opportunity

February 18, 2025

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Illustration of a car driving past a road sign that says Next Stop India.

Source: Image created by JesterAI.

1. Tesla Set To Break Into India

Tesla (TSLA -16.26%) is looking to enter the Indian market, with job postings in Mumbai coming less than a week after Elon Musk sat down with Indian PM Narendra Modi. Roles including a store manager and other customer-facing positions is a clear sign that Tesla is trying to open a showroom in the city.

  • India is the world's third-largest auto market: Musk has pushed to enter India in the past, but high import tariffs of almost 100% for electric vehicles have made it difficult to do so. The market is projected to grow at a compound annual growth rate of 40.7% through to 2030, highlighting the expansion potential for the business and stock alike.
  • Stuck between a rock and a hard place: Over in China, Tesla is anticipating a delay in getting local approval for autonomous driving tech. Authorities have said there's no definitive timetable for approval, with the move being seen by some as a bargaining chip in the escalating U.S.-China trade war.

2. Baidu Results Highlight AI Potential

Baidu (BIDU 1.31%) released fiscal 2024 annual results earlier, with the stock falling ahead of the market open. Although revenue fell and costs increased, AI investments are expected to deliver more significant results in 2025.

  • "We are confident that our strategic AI investments will drive meaningful progress": Interim CFO Junjie He steered shareholders toward appreciating the 26% Q4 revenue growth from the AI Cloud business, with momentum that's expected to keep going this year.
  • Testing and approvals for robotaxis are going well: Apollo Go, Baidu's autonomous ride-hailing service, provided over 1.1 million rides in Q4, up 36% year over year. As of this month, it has begun 100% fully driverless operations across China.

3. Arista Networks Powers Up

Rule Breakers recommendation Arista Networks (ANET 0.67%) is due to release quarterly earnings after the market closes. Both revenue and earnings are expected to rise versus last year, with a focus on information on new product developments.

  • Dominance in the higher-end networking equipment niche: Last quarter, the business announced a partnership with Alabama Fiber Network and its advances with its CloudVision platform. The update today should provide better data on how these projects are progressing and any immediate financial benefit being felt.
  • Up 2,219% since first recommended in 2014: Investors will be keen to see if key client spend from Microsoft (MSFT 0.90%) and Meta (META -0.50%) has increased. Both contribute to Cloud division revenue, with Meta using Arista hardware in its AI clusters.

4. Layoffs Signal Corporate Shift

News from Southwest Airlines (LUV 0.62%) of a 15% layoff to help cut costs comes at a time when other sectors are following suit, with the impact of AI and a post-pandemic workforce restructure being key factors at work.

  • "The environment we're operating in today demands a new approach, particularly given our size and scale": Workday (WDAY -0.17%) CEO Carl Eschenbach has said hiring would continue selectively in areas related to AI, but the 8.5% workforce cut was needed as the business evolves and becomes more tech driven. In the long run, this could lead to higher efficiency and larger profits.
  • "We need to meaningfully change how our support teams are organized and how we work": Starbucks (SBUX -0.79%) is implementing layoffs, with CEO Brian Niccol recently announcing wide-ranging strategy shifts as it seeks to deal with the rise of cafe culture and remote work that has spiked since the pandemic.

5. Foolish Fun

Three of the four Stock Advisor recommendations for Tesla are currently beating the S&P 500 (the original by 16,199%).

Which two stocks do you believe can outperform Tesla over 5 years, and why? Debate with friends and family, or become a member to hear what your fellow Fools are saying.