💰 The peak of earnings season for U.S. stocks is approaching.
💹 $Alphabet(GOOG)$/$Texas Instruments(TXN)$/$Seagate Technology PLC(STX)$: Optimistic quarterly performance outlook, higher certainty in investment returns.
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| The Future of Megapack
$Tesla Motors(TSLA)$ is set to release its Q2 2025 financial report on July 23, before the U.S. stock market opens. The debate around Tesla is intense, and during this earnings season, the investment returns for $Alphabet(GOOG)$/$Texas Instruments(TXN)$/$Seagate Technology PLC(STX)$ show higher certainty.
The outlook for electric vehicle sales remains cautious: market expectations forecast Tesla's Q2 revenue to be $22.83 billion, a year-over-year decrease of 10.46%, with adjusted net profit expected to fall by 15.38%. Additionally, the projected number of vehicle deliveries for Q2 2025 is 384,100, a year-over-year decline of 13.48%, also below market expectations.
What else should we watch? Given that Tesla's stock price has already diverged from the fundamental figures disclosed in the previous quarter's report, traders will pay closer attention to the company’s future growth points, including its energy storage business: Q2 revenue is expected to reach $3.014 billion, a 100% year-over-year increase. Indeed, Tesla has also become an AI energy storage company; the capacity expansion of its Megafactory effectively supports the strong global demand for energy storage. AI data center builders like Microsoft and Amazon are gradually replacing diesel generators with Tesla Megapack as uninterruptible power supply (UPS) systems, driving a new wave of significant energy storage demand.
In the artificial intelligence arena, Elon Musk’s xAI company is rapidly consuming funds at a rate of $1 billion per month, primarily for AI model development and data center construction. This burn rate has drawn widespread attention in the market, with projected expenditures reaching $13 billion in 2024, while revenues during the same period are expected to only be $500 million. Tesla shareholders are soon to vote on whether to invest in xAI. Previously, Musk transferred the priority buying rights for NVIDIA's H100 GPUs to xAI, paused research on Tesla's autonomous driving system, and recruited several key talents from Tesla, actions that have sparked dissatisfaction among some shareholders. The outcome of the upcoming vote will determine whether Tesla will allocate more resources to xAI, a decision that has garnered significant market interest.
| Market recap
The outlook for the U.S. economy is increasingly polarized. The Federal Reserve's "Beige Book" indicates that the economy faces uncertainties, with some sectors performing poorly, leading to heightened expectations for interest rate cuts. Additionally, frequent trade negotiations between the U.S. and China, Japan, and India may spotlight tariff policies, raising concerns over economic volatility risks.
Last Friday, $NASDAQ(.IXIC)$ has risen for the fifth consecutive trading day, reaching a new all-time high, with large tech stocks mixed; TSLA increased by over 3%, and $Amazon.com(AMZN)$ rose more than 1%. Most Chinese concept stocks gained ground, with $NASDAQ Golden Dragon China Index(HXC)$ up 0.6%, $JD.com(JD)$ rising over 3%, and $Alibaba(BABA)$ and $NetEase(NTES)$ each increasing by over 2%.
Megacaps - Tech war in China
Eventually, the "tech war" may ease profit pressures for leading internet companies ahead of schedule, as stock prices have rebounded: Today in HK market, $MEITUAN-W(03690)$ rose 2.75%, while $JD-SW(09618)$ and $BABA-W(09988)$ both increased by around 2%.
Chinese tech giants are employing various strategies to capture users, with the main battlefield not being AI, but instant retail, particularly food delivery. Alibaba, Meituan, and JD.com are in a strong competitive position, generating a significant number of ghost orders at very low prices, which has attracted regulatory attention. Last weekend, Meituan and Alibaba achieved daily instant retail order volumes of 150 million and 80 million, respectively, aiming to create new markets with substantial subsidies and digital strategies to capture user mindshare. Goldman Sachs estimates that Meituan, JD.com, and Alibaba will invest a combined 25 billion yuan in food delivery in Q2 alone. The result is significant downward pressure on profit margins in Q2 due to subsidy expenditures. With government intervention calling for a halt to the price war, we expect the intensity of the price competition to slow.
WSB, but Korean
As of July 17, 2025, the cumulative trading volume of South Korean investors in Chinese stocks has reached $5.514 billion, making it the second largest overseas investment market after the U.S. Among these, Hong Kong stocks have become a popular choice, with $XIAOMI-W(01810)$ holding the highest market value among South Korean investors in Hong Kong stocks at $251 million, and a net buying amount of $160 million over the past year. Additionally, South Korean investors have 66.7 trillion won in idle funds available for increasing their positions, showcasing their enthusiasm and potential for investing in the Chinese stock market.
Top movers
Real estate tech stock $Opendoor Technologies Inc(OPEN)$ surged, as retail investors bet on a possible hundredfold increase in the coming years. Opendoor rose over 188% last week, driven by retail enthusiasm and investor Eric Jackson's investment thesis, propelling this previously dormant real estate tech stock to new heights.
On July 18, Trump signed the "Genius Act," marking the implementation phase for U.S. stablecoin regulatory legislation. $Circle Internet Corp.(CRCL)$ initially surged nearly 12%, and $SharpLink Gaming(SBET)$ rose 10%, but both subsequently declined. The first phase of the stablecoin narrative has come to a close, requiring time to digest previously inflated expectations (and stock prices that have already risen). It is not yet time to rush into bottom-fishing. Reflecting on CRCL’s rise, it’s also time to pay attention to the next significant crypto IPO: Bullish, which boasts a trading platform and leading media in the crypto space, has submitted registration documents to the U.S. SEC, seeking to list on the NYSE. Bullish was established in 2021, incubated by blockchain company Block.one and Silicon Valley investor Peter Thiel, among others.
AI energy stocks also performed well, with $NuScale Power(SMR)$ up 7.3%, $Constellation Energy Corp(CEG)$ up 4.3%, $Energy Fuels(UUUU)$ up 2.2%, and $Cameco(CCJ)$ up 1.4%.
| Win big in the earnings season
There has never been a business that is "easy to profit from"; only operators who continuously adapt to changes survive. Even a strong player like Tesla must constantly adjust its business direction to gain customer trust and market share. During this earnings season, we will continue to uncover potential winners, so watch close.
GOOG
$Alphabet(GOOG)$ is set to report earnings after the market closes on Wednesday. Analysts are generally optimistic about the company, pointing to advertising and cloud activities as potential growth catalysts. Revenue is expected to reach $93.94 billion in Q2 2025, a year-over-year increase of 10.86%, while EPS is anticipated to be $2.18, up 15.24% year-over-year.
On the business front, Alphabet has improved the efficiency of ad distribution through artificial intelligence, enhancing the return on investment (ROI) for advertisers. The growth in YouTube users, particularly for short videos, is also promising. Recently, OpenAI began renting Alphabet's TPU chips to support products like ChatGPT, marking the company's first large-scale use of non-NVIDIA chips. TPU may become a driving force for accelerated growth in Google Cloud revenue, reflecting positively on future stock prices.
While antitrust sanctions could hinder the company's stock price growth, they do not affect the short-term bullish trend. As the first large cloud service provider to disclose earnings, Alphabet's CapEx also provides forward-looking guidance for capital expenditures in the U.S. data center sector, and strong spending will help boost market confidence and enhance the foundation for the entire AI ecosystem's development, thereby uplifting stock prices.
TXN
$Texas Instruments(TXN)$ is expected to report second quarter earnings on Tuesday, July 22, after the market closes. On Thursday, Texas Instruments announced a quarterly cash dividend of $1.36, payable on August 12, maintaining a dividend for over 50 years.
Texas Instruments stock is expected to show strong quarterly earnings and revenue growth, with analysts projecting a 13.8% increase in revenue and a 20.1% increase in EPS year-over-year.
Texas Instruments stock has rebounded 50% from its lows in April and is just 2% away from new all-time highs.
STX
$Seagate Technology PLC(STX)$ is a leading innovator in mass-capacity data storage. It will report its fiscal fourth quarter and fiscal year 2025 financial results after the market closes on Tuesday, July 29, 2025. Analysts expect the company’s revenue to grow by 27.5% year-over-year to $2.41 billion, with EPS reaching $2.43, more than doubling from $1.05 in the same period last year.
Seagate maintains a first-mover advantage and a leading commercial position with its HAMR technology, which allows hard drives to break through the physical limits of traditional magnetic recording, significantly enhancing storage density while reducing costs and power consumption. This is crucial for hyperscale data centers pursuing maximum capacity and cost-effectiveness. Earlier this year, Seagate launched the Exos M 36TB hard drive, once again pushing the limits of storage capacity.
Seagate's core business focuses on the enterprise and cloud storage markets. With the increasing prevalence of AI applications driving unprecedented demand for large-capacity data storage, it is a major beneficiary as companies and hyperscale clients expand their databases and train larger AI models.
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