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GM orders recall on EVs, JD.com’s record-setting growth, Robinhood’s stock rides a wave of potential

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Brian Sozzi and Julie Hyman break down some of Monday’s early market movers, which include: JD.com beating estimates fueled by a record-setting quarterly growth of new users, GM's ordering a recall on all Chevrolet Bolt EVs over battery concerns, and Robinhood seeing a bump in its stock as analysts emphasize the potential of the company’s growth.

Video Transcript

JULIE HYMAN: And let's check on some stocks that we are watching today that have to do-- that are on the move. We talked earlier, Brian, about Traeger because it's getting a bunch of analyst initiations. There's another company that is very closely watched that just came public that is getting initiations, and that is Robinhood.

And when you're looking across the different initiations that we're seeing here this morning, it's a fairly mixed picture, I would say. There's definitely, you know, I would say it's kind of split between the three. What's standing out to you and some of the commentary that we're seeing this morning?

BRIAN SOZZI: Well chief among these takes, Julie, on Robinhood, and I was talking with Myles about this last week, is, who is covering Robinhood? It seems to be more of the tech analysts covering this company instead of that analyst that covers a Goldman Sachs and a Charles Schwab. Just an interesting little tidbit there for investors to keep in mind, because I would say the tech analyst might be a little more bullish on a Robinhood than, let's say, the banking analyst. That's just my take.

But again, Deutsche Bank out this morning talking a little bit about Robinhood's potential, coming out with a hold rating on Robinhood $45 price target. Of course, that is well below the $85 a share we saw in Robinhood a couple of weeks ago when it got really taken or swept into that meme stock frenzy.

But again, Deutsche Bank $42, up $45 price target here, a hold rating on Robinhood saying we view Robinhood's growth potential as being exceptionally attractive with the founders and management team not only pioneering simple brokerage trading but also positioning the company to leverage its creative app. But again, also calling out some risk to the business, of course, crypto and a lot of those legal lawsuits that it's involved with.

JULIE HYMAN: You know, it's interesting as I look across these different initiations is that whether the analyst is a financial analyst or a tech analyst doesn't seem to necessarily inform how bullish they are on the stock. Just to take a handful of examples here, Devin Ryan over at JMP who is a financial analyst, he has a market outperform on the stock. He says the company has already established itself as a category leader and a cultural phenomenon. And he says that they are battle-tested.

Then you got Dan Dolev over a Mizuho who more covers the fintech side of the equation. He says it's not a meme stock phenomenon, but is a singularity-- wow-- that captures Generation Z zeitgeist. And he's got a buy rating on the stock also. So the people who like this thing, they really like it, it sounds like.

BRIAN SOZZI: Yeah, they're really putting every adjective in there in these reports. Really makes you want to just go out there and empty out your savings account, right, Julie? Just go all on to Robinhood.

JULIE HYMAN: I want to talk about something else that has been in the zeitgeist as of late, and that is the intense attention that is being paid to Chinese stocks. And we got a company this morning that actually beat estimates. That's JD.com, sales there beating estimates, even though we are seeing this regulatory crackdown happen in China. Its numbers-- the equivalent, if you look at it from yuan to dollars, about $39 billion, which is above what analysts had anticipated, 26% growth in sales there.

It is, though, the slowest. It's a slowdown, just like we are seeing here in many of the e-commerce companies. It is a slowdown in growth. The stock is trading a little bit lower here this morning, although in general, Brian, we're seeing something of a bounceback in the China-related trade, whether it's Chinese stocks themselves, or looking at commodities that are so heavily dependent on that market.

BRIAN SOZZI: Yeah, this JD corridor really put me to bed, Julie, so I won't say much on it, except that their costs grew faster than their sales, and that is not a good look when you're a tech company, and especially not a look when you're a Chinese-focused stock that is probably-- it's really been hammered. You can see the chart right there has been hammered, swept into this pressure on China stocks across the board. JD, Alibaba, DD, you name it. And it is interesting to see this move.

Shares were initially higher in the pre-market. We were seeing a big reversal here as investors, again, just don't like the quarter and unlikely-- unlikely-- trust the results here, just given everything that they've seen on the China-- on the China regulatory front. Very much looking forward, Julie, talking to Carson Block later on in the 1:00 to 2:30 PM hour. He made-- he has made, essentially made his name shorting or recommending short positions on these China stocks. So it'll be interesting to see what he has to tell us in the afternoon.

JULIE HYMAN: Yeah, although I don't know if he's talked on JD specifically. He definitely is-- sort of brings to the fore some of the more obscure Chinese names at times. But yeah, it's always very interesting to hear what Carson has to say. Deeply, deeply researched when he comes out with his various calls.

One more mover that I want to mention this morning is General Motors, and that's because this company came out late Friday and expanded its recall of its Volt electric vehicles. This is the third they've done this in nine months. It has to do with the risk of battery fires, and it's such an interesting situation here, because you have all these automakers pushing for EVs. GM certainly is spending like its competitors to get there.

And then you have a situation like this. And I don't know if it is-- if we can apply that to its other EV programs, but it's-- I think it's safe to say it's not a good look. And maybe that's reflected in the stock this morning.

BRIAN SOZZI: No, you're also learning, too, that it's great to tout that you're going to roll out-- in the case of GM, you're going to roll dozens of new electric vehicles over the next five years. But do you have a service plan in place? Do you have the balance sheet to service cars that really are fundamentally different than the cars you've been making for the past 50, 60 years?

And I think you're learning that, at least from a General Motors standpoint, perhaps they don't have that service standpoint just down just yet. And that raises balance sheet questions, I think. And not just General Motors, it's a Ford and every other player in the auto industry that is really touting the push to

JULIE HYMAN: Yeah, we'll have to see if they can actually deliver on this stuff. I think that that is going to be interesting to see. We hear about, for example, a lot of orders for Lightning F-150. I'm going to be really curious to see what delivery looks like, and what performance looks like for those trucks once they do get out.