As you know, the markets have been surging... They finished the most recent full week with a bang. On Friday, the S&P 500 Index, Nasdaq Composite Index, and Dow Jones Industrial Average all hit new all-time highs.
The Power Gauge Is Still Cautious on This 'Magnificent Seven' Stock
By Ethan Goldman, junior analyst, Chaikin Analytics
As you know, the markets have been surging...
They finished the most recent full week with a bang. On Friday, the S&P 500 Index, Nasdaq Composite Index, and Dow Jones Industrial Average all hit new all-time highs.
I noticed that six of the "Magnificent Seven" mega caps closed with an average gain of about 2% that day.
But the other one didn't fare as well. In fact, it was the only Magnificent Seven stock to lose value on Friday. So that caught my eye...
I'm talking about electric-vehicle maker Tesla (TSLA). That day, it fell more than 3%.
Overall, the stock has had a wild year...
Tesla kicked off 2025 trading at about $379 per share. Over the next few months, the stock collapsed. On April 8, TSLA shares bottomed at just less than $222.
That's a more than 41% wipeout.
But since then, it has been a different story. Even with the drop this past Friday, Tesla's stock still closed at about $434 per share. That's a staggering 95% increase from the lows in April.
This week, Tesla has moved even higher. It closed yesterday at nearly $462 per share. In the chart below, you can see the stock's wild ride this year...
On the surface, this is an amazing turnaround. But a look at Tesla's quarterly reports tells a different story. And it's one that the Power Gauge agrees with...
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Tesla's Stock Has Grown Despite Weakness Under the Surface
Keep in mind that the Power Gauge hasn't given Tesla a "bullish" or better rating since January.
Toward the end of that month, Tesla reported an earnings miss for its recent fourth quarter. Despite the miss, the stock ticked higher the next day... but then resumed its slide toward the April low.
Since then, the Power Gauge hasn't been optimistic on Tesla. The stock has still spent most of this year in "neutral" territory in our system.
Folks, there's good reason for this...
To start, Tesla has a price-to-earnings ratio of about 292 times. That's a steep valuation, regardless of what the company does.
The story continues when we look at the stock's earnings history. Tesla hasn't beaten its quarterly expectations since the third quarter of last year.
And even worse, Tesla's yearly revenue growth has sharply declined...
In 2021, Tesla grew its annual revenue by about 71%. Since then, that growth rate has been falling. Last year, Tesla grew its annual revenue by a mere 1%.
For 2025, analysts expect that the company will post revenue of a bit less than $96 billion. That would be roughly a 2% decline from last year.
Additionally, the U.S. government has ended an important electric-vehicle tax credit. Without this, prospective buyers might be less likely to purchase Tesla's vehicles. Keep in mind that in the most recent quarter, automotive sales represented roughly three-quarters of the company's total revenue.
Looking ahead, the future for Tesla's stock looks bleak. And the Power Gauge agrees...
Yes, the stock has surged. But it's important to note that the fundamentals behind Tesla are still poor.
Meanwhile, the recent boom in the share price might look attractive to some investors. However, the company's growth doesn't support this surge. And if you look back at the chart above, you'll notice that the stock's move in recent months wasn't a one-way ticket higher. You can see some deeper swings to the downside.
So today, the Power Gauge is sending us a message with its current "neutral" rating... Investors still need to be cautious with Tesla.
Good investing,
Ethan Goldman
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
-0.16%
10
11
9
S&P 500
+0.05%
122
233
148
Nasdaq
+0.45%
31
48
21
Small Caps
-0.85%
458
1056
400
Bonds
-1.01%
— According to the Chaikin Power Bar, Small Cap stocks have become somewhat more Bullish than Large Cap stocks. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Information Technology
+6.53%
Industrials
+1.45%
Consumer Discretionary
+0.78%
Communication
+0.56%
Energy
+0.24%
Utilities
-0.33%
Financial
-0.65%
Materials
-1.11%
Health Care
-1.36%
Consumer Staples
-3.96%
Real Estate
-4.44%
* * * *
Industry Focus
Bank Services
13
72
16
Over the past 6 months, the Bank subsector (KBE) has underperformed the S&P 500 by -13.33%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #14 of 21 subsectors and has moved down 1 slot over the past week.
Indicative Stocks
BANF
BancFirst Corporatio
INDB
Independent Bank Cor
FFIN
First Financial Bank
* * * *
Top Movers
Gainers
TER
+20.47%
STX
+19.11%
WDC
+13.18%
CNC
+12.5%
CAT
+11.63%
Losers
FI
-44.04%
CZR
-15.21%
ENPH
-15.15%
SW
-12.18%
GRMN
-11.48%
* * * *
Earnings Report
Earnings Surprises
CNC Centene Corporation
Q3
$0.50
Beat by $0.66
BA The Boeing Company
Q3
$-7.47
Missed by $-5.09
VTR Ventas, Inc.
Q3
$0.12
Beat by $0.07
GOOGL Alphabet Inc.
Q3
$3.09
Beat by $0.82
EXR Extra Space Storage Inc.
Q3
$0.78
Missed by $-0.41
* * * *
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