🤖 Tesla the AI Company?

MARKET UPDATE

Good Morning Investor! Over the 4th of July holiday, Crypto continued its slide with Bitcoin briefly touching $57,000 for the first time since February. Meanwhile, shares of Softbank ($TYO: 9984) reached their first all-time high in over 24 years, thanks to ARM ($ARM) and the AI boom.

Kudos to our Tickergeek Pro community! This month’s stock selection has surged a whopping 15%!

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TODAY’S BIG HEADLINES

Tesla the AI Company?

Shell Does a U-Turn on its New Biofuel Plant

Grill Sales are in a Post-Pandemic Glut of Note

ARTIFICIAL INTELLIGENCE

Tesla the AI Company? 🤖

Tesla Defies the Odds: Tesla ($TSLA) pulled a fast one on Wall Street this week by reporting better-than-expected delivery figures. While deliveries were down 4.8% year-over-year, they saw a 14.8% increase from the previous quarter. But what’s really revving up Tesla’s stock? Investors might be placing their bets on Tesla’s booming energy business.

• More Than Just Cars: Sure, Tesla dominates global electric vehicle sales, but it’s not just a car company. Tesla’s clean energy sector is shining brightly, thanks to a surge in AI-driven energy demand. This side hustle is doing more than just keeping the lights on—it’s sparking investor interest.

Optimus TIme: EElon Musk is ready to drop $10 billion on AI research this year alone, so expect some major sparks to fly. Tesla is set to showcase an autonomous robotaxi on August 8th, and the Optimus robot will enter limited production next year. With the developed world’s working-age population on the decline, the demand for robots is poised to explode.

• Musk’s robots might soon be hailed as heroes, stepping into industries with dirty, dangerous jobs like mining, nuclear reactor maintenance, and chemical manufacturing. These mechanical marvels could become indispensable, especially as skilled workers become a rare breed. Get ready for a future where robots might just save the day—again and again.

ENERGY & INDUSTRIALS

Shell Does a U-Turn on its New Biofuel Plant🛢️

Sticking to Their Guns: Shell ($SHEL) has decided to put the brakes on its major biofuel project in the Netherlands, one of Europe’s largest. Given the current state of the biofuel market, this move isn’t entirely surprising. The official reason? Shell's management gave a rather cryptic explanation about “addressing project delivery and ensuring future competitiveness given current market conditions.” Translation: the biofuel market isn’t looking too hot.

Oh, What Could’ve Been: When Shell first broke ground on the Rotterdam-based plant, it boasted that the project would eventually produce enough renewable diesel to take 1 million cars off Europe’s roads each year. Half of the plant’s output was earmarked for sustainable aviation fuel, with the rest going towards renewable diesel production. However, this latest halt is just another sign of Shell’s shifting priorities away from renewable energy.

• In June 2023, Shell reneged on its promise to steadily cut oil production by 2030, and in March, it announced a dilution of its energy transition goals. This biofuel project slowdown coincides with a broader stagnation in Europe’s biofuel market, characterized by a supply glut and tepid demand.

Biofuel Blues: Elsewhere in Europe, Finnish biofuel producer Neste has seen its share price plummet about 51% over the past year, while German producer Verbio is down 53%. The biofuel market is looking decidedly unattractive in 2024, making Shell's decision to hit pause seem all the more reasonable. As the renewable energy landscape shifts, it’s clear that biofuels are having a rough ride.

CONSUMER DISCRETIONARIES

Grill Sales are in a Post-Pandemic Glut of Note🥩

The Inevitable Pullback: Nothing screams American like grilling up a feast in the backyard. But despite nearly 80% of Americans owning a grill, the industry isn't exactly sizzling right now (pun intended). After the pandemic-induced sales surge, we're now seeing the inevitable cooldown as homeowners are no longer clamoring for the latest grill gadgets.

• During the pandemic, high-end grill manufacturers Traeger ($COOK), Solo Brands ($DTC), and Weber all went public in 2021, riding the wave of surging demand. But as the smoke cleared, growth tapered off and losses mounted, leaving shareholders sweating over the future.

• Sales of Traeger and Solo Stove grills have plummeted 51% from their 2021 highs, tanking their stocks by over 90%. Meanwhile, Weber was taken private last year after losing half its share value. That’s a lot of charcoal turned to ashes!

Fourth on a Budget: According to Rabobank’s BBQ Index, the cost of hosting a July Fourth barbecue has jumped 32% since 2019, hitting a record $99 for a 10-person gathering. These rising costs are leading brands to cook up deals to entice thrifty grill masters.

• Retail giant Home Depot ($HD) is rolling out promotions with intro-level grills like the $99 Weber kettle, plus free assembly and delivery.

• Meanwhile, Walmart ($WMT) and Kroger ($KR) are bundling popular BBQ products to attract cost-conscious Americans.

MORE NEWS

Additional market-moving events🌎

Change of Leadership: The United Kingdom’s general election took place yesterday with the Labour party expected to win over a large majority. (YouGov)

ChatGPT, but Make it French: French billionaire Xavier Niel is building a ChatGPT competitor with a ‘thick French accent’. (Fortune)

Figma the Copycat: Figma pulls AI tool after criticism that it ripped off Apple’s design. (The Verge)

OUR PICKS

Our selections performance👾

On Monday the 11th of March, we released our “two superperformers” stock picks which we believe will provide significant outperformance compared to the S&P 500. Then on the 12th of June we released our next stock selection.

Here’s how the three stocks have performed since:

• Evolution AB: 1,116.00 SEK (📉-14.90%)

• Hims & Hers Health: $20.49 (📈+41.60%)

• PayPal: $59.64 (📉-5.98%)

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