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The Chinese EV company has an SUV with its own Turing chip. (0:14) Tesla slumps as Elon Musk presses on politics. (1:32) BofA resumes telecom coverage. (3:52)
This is an abridged transcript of the podcast:
Our top story so far, XPeng (XPEV) is creating some waves in the electric vehicle sector after unveiling its Turing chip in its latest electric vehicle model.
The Turing chip is XPeng's groundbreaking, self-developed artificial intelligence processor that the company designed to power the next generation of smart electric vehicles and advanced mobility platforms.
Developed internally by XPeng, the Turing chip is said to represent a major leap in automotive AI, offering unprecedented computing power and efficiency tailored for autonomous driving and intelligent cockpit systems. The 40-core processor and two proprietary neural processing units set the chip up to run large-scale AI models through its impressive computing capability of 700 trillion operations per second per chip.
Along with its 40-core processor, the chip integrates two proprietary Neural Processing Units. The specialized architecture of the chip is optimized for neural networks and large AI models.
The Turing chip debuted this month in the G7 SUV. The new G7 electric SUV in China entered the fiercely competitive electric crossover market with a starting price of just 195,800 yuan ($27,325) and is seen as positioned squarely to compete with the Tesla Model Y (TSLA) and the new Xiaomi (OTCPK:XIACF) YU7. Early reviews of the AI-enhanced G7 have been positive, especially with the Turing chip seen as a competitive edge.
Also in the EV sector, Tesla (TSLA) is the weakest performer in the S&P following CEO Elon Musk’s announcement of plans to launch a new political party.
The America Party could concentrate its efforts on “just 2 or 3 Senate seats and 8 to 10 House districts,” Musk said.
Wedbush analyst Dan Ives said: “Very simply, Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story.”
"Given the limited success independents have seen politically in the US historically, this will be viewed as a disruptive (for Tesla) and political gamble by Musk heading into competitive congressional races in 2026 and create some agita for investors," he added.
In addition, William Blair downgraded Tesla to Market Perform from Outperform.
Analyst Jed Dorsheimer pointed to the elimination of the $7,500 tax credit for the purchase or lease of a new electric vehicle in the Republican tax and spending bill as a clear negative.
"While the $7,500 tax credit is likely to affect demand, the combination of a demand headwind and over $2 billion in profit from regulatory credits at risk may be too much for investors to bear," he said. "Unlike the EV tax credit, we expect the reduction in regulatory credit revenue to result in a direct hit to profitability, prompting yet another across-the-board reset to Street models."
Among other active stocks, Jefferies upgraded Constellation Brands (STZ) to Buy from Hold.
Analyst Kaumil Gajrawala said the market is challenging, but noted that it is not a brand issue. He pointed out that the company's guidance implies that negative trends will turn positive, and the wine business will become profitable.
Piper Sandler downgraded CrowdStrike (CRWD) to Neutral from Overweight with an unchanged price target of $505 on the stock.
Analysts noted that they do not see a near-term scenario that would meaningfully increase numbers or its terminal multiple. But they noted that their disposition toward CrowdStrike and its longer-term opportunity as a security and IT consolidator remains favorable.
Both stocks are under pressure.
Under the merger agreement, Core Scientific stockholders will receive 0.1235 newly issued share of CoreWeave Class A common stock for each share of Core Scientific common stock based on a fixed exchange ratio.
And in the Wall Street Research Corner, BofA reinstated its coverage of AT&T (T), Verizon (VZ) and T-Mobile US (TMUS).
Analyst Michael Funk writes that the telecom sector is often viewed as homogeneous, with stocks being under-owned by institutional investors and overlooked as being in a sleepy, mature industry. But he believes the top three U.S. telecoms have "unique characteristics tied to strategy, M&A, metric prioritization, return of capital, and estimate upside/risk."
AT&T was reinstated with a Buy and $32 price target. Funk said the company has a balanced strategy to drive growth.
"Fiber is a key element of AT&T’s long-term strategy,” he added.
Verizon was reinstated at Neutral and a $45 target. In the near term, they expect Verizon to face competitive pressure that will likely increase promotional spending and impact margins.
The "see risk to postpaid net add growth in the short term as cable companies ramp competitive intensity and TMUS likely follows to defend net add guidance."
T-Mobile US was reinstated at Neutral with a $255 target. Funk says the company is executing well and leading the industry in subscriber growth, but its reliance on subscriber growth to drive earnings growth leaves it more exposed to increasing competition.
They "believe TMUS is most likely to follow cable companies with more competitive pricing and promotional offers based on the company’s commitment to its highest ever postpaid net addition guidance of 5.5-6mn and the importance of this metric to investors."
Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
