On Thursday, Chinese electric vehicle firm Nio posted a loss of $0.30 (non-GAAP EPADS). Revenue soared by 98.9% Y/Y to $2.4 billion. NIO stock gained 14.39% on the day.
Investors should beware of chasing Nio’s rally. The strong sales growth has yet to lead to profitability. Only Li Auto (LI) and BYD (BYDDY) are profitable EV firms in China.
Nio could report profits sooner if it curtailed its heavy advertising spending levels. Selling, general, and administrative expenses increased by 31.5% Y/Y to $517 million (RMB3,757.5 million).
Applied Digital (APLD), which attracted an 11.96% short interest from bears, spiked by 65.74% yesterday. Nvidia joined other investors in a financing round that raised $160 million. Nvidia may need start-ups like Applied Digital to buy more AI servers.
Wary investors may avoid AI-related stocks if this firm fails to achieve profitability.
Intel (INTC) attracted strong buying volumes to keep the stock close to $20.00. However, costs are rising from building Gaudi AI servers. It must also offer a refund or exchange for customers who bought its expensive i9-14900K CPU.
Intel needs to cut its debt. It may sell its 88% stake in Mobileye (MBLY).
Unfortunately, MBLY stock lost over 70% YTD. The stock closed at $12.62. Intel should avoid selling this stock until shares rebound back to the $20 - $40 range within a few years.
