Shesa's Weekend Stock Market Updates - 10|26|25

Welcome to my Weekend Updates

This week, the Dow Jones Industrial average rose 472.51 points, or 1.01%, to 47,207.12, securing its first close above the 47,000 level ever. The S&P 500 added 0.79% to 6,791.69, while the Nasdaq Composite climbed 1.15% to 23,204.87. All three major averages closed at records.The consumer price index (CPI) showed a 0.3% increase on the month, putting the annual inflation rate at 3% vs. 3.1% expected by Wall Street. Also, Core CPI was less than expected. The Market Fell Wednesday because of Disappointing Earnings: Netflix shares dropped 10% after a profit miss, dragging tech stocks. Tesla’s stock fell 1% post-earnings (EPS $0.50 vs. $0.55 expected). The quantum computing stocks and many AI related stocks were thrashed early in the week but bounced back after the news that Trump administration would take stake in some of the companies. Market was impacted by: 

• Trade Tensions: U.S.-China trade concerns intensified after reports of potential U.S. export of software. 
• Government shutdown entering its fourth week
• Good earnings from some DOW companies boosted sentiment, despite Netflix's lackluster earning

Tesla (TSLA) 

Revenue: $28.10 billion vs. $26.37 billion (beat)

EPS: 50 cents vs. 54 cents estimated (miss)

Cash Position: $41.6B cash equivalents 

Catalysts:

• Cybercab production will begin in Q2 2026 will no steering wheel, or pedals
• Optimus V3 or humanoid robot will be unveiled in Q1 2026
• Energy, new affordable Model 3/Y launches

My View: Despite Tesla's profits short-fall, I am a long term investors on this company. I want to be remain invested and add on the pullbacks, trim some on the dip. But the core positions will remain. I invest not on its current profit, rather for Tesla's future potential. I am and will remain a Tesla investors as long as I have confidence on the company. Hence, the shareholders vote is critical. If we are Tesla investors, we must vote before 11/6.

Netflix (NFLX)

• Revenue: Actual $11.51B vs. Expected $11.51B (met expectations).

• EPS: A$5.87 vs. $6.94 (missed by $1.07, due to $619M Brazilian tax expense).

• Operating Margin: Actual 28% vs. Expected 31.5% (below guidance)

Lam Research (LRCX) 

• Revenue: $5.32B, +3% QoQ, +27.7% YoY, beat estimates of $5.23B.

• GAAP EPS: $1.24, -8% QoQ, +44.2% YoY, beat estimates of $1.19.

Guidance was slightly lower than Street estimates.

My View: I will hold and add on pullback

Some key news

• Nvidia (NVDA) CEO Jensen Huang will be delivering the keynote address at Nvidia’s GTC event (12PM ET next Tuesday, 10/28).
• Apple (AAPL) is in talks with TSLA CEO Elon Musk's SpaceX to bring Starlink satellite service to future iPhone possibly on iPhone 18 Pro in 2026.
• META lays off 600 people from the AI Unit, Rivian to cut more than 600’people.
• U.S China trade talks concluded with preliminary consensus on some key issues over the weekend. Donald Trump and Xi-Ping will meet in South Korea on 10/30.
• There was news that U.S may cut India tariffs from 10-15%. We will see..

Key Economic News this week

WED, 10/29: FOMC interest-rate decision: Fed is expected to cut another 0.25% interest rate.

THU, 10/30: Q3 GDP

FRI, 10/31: Consumer spending, PCE Index

Earnings this week

10/28: ENVX

10/29: META, CVNA, HOOD, MSFT, GOOG

10/30: AMZN, AAPL, RDDT

What to expect?

This will be the super bowl week for tech earnings where we will see all big tech companies except Nvidia will release their earnings this week. If the earnings are good, which I think it should be, then the market may hit new highs. Furthermore, the FOMC is expected to cut another 0.25% interest rate on Wednesday, 10/29. If so, that would be a good news for the market to add some fuel. There will be other important economic reports as well. Nvidia (NVDA) CEO Jensen Huang will be delivering the keynote address at Nvidia’s GTC event and that would be very important. 

Stocks to watch

NVDA, META, MSFT, GOOG, AMZN, AAPL, CVNA, AVGO, TSLA, NBIS, CRWV, APLD, AMD, HOOD, HIMS, TEM, TSM, SOXL, TQQQ, ENVX, ORCL, DASH, IONQ, QBTS.

A few words about Exit Strategy

A few times some of the friends keep asking me about exit strategy. I always write my strategy. I exit whenever I see a major red flag and think that this stock does not have the potential or opportunity that I visualized while buying the stock. Under such circumstances,  I get rid of the stock and utilize the resources in another stock which has better potential. What is the RED FLAG? It can be related to revenue growth, earnings, litigations, lack of momentum or due to some unknown facts that was/were unknown while buying it.  I do not keep hanging with losers, unless there is/are some compelling reasons. I never take a decision based on analysts comment or someone said or run around the hype. After the due diligence/research, I determine whether to add more or trim or pull the trigger and get out of it. In case, it's speculative buy then I can take the opportunity and get out. If we know why we are buying the stock then it's very easy to EXIT. But if we have no clue why we bought then it's very hard to EXIT. For more on my strategies, pls read my AUG, SEPT 2025 blog from the Archive.