Tesla, Lucid, Cloudfare, and NextEra: Trending Tickers

Tesla (TSLA) shares are trending lower as Deutsche Bank cut its price target from $300 to $285 citing growth and production concerns for 2024.

EV maker Lucid (LCID) will become the first automaker to open up a manufacturing facility in Saudi Arabia. To start it will have the capacity to assemble 5,000 new vehicles per year, but once finished can reportedly produce 155,000 new vehicles per year.

Cloudflare (NET) is launching a suite of products and apps to assist customers with deploying AI. The company will also partner with Meta (META) to make the Llama 2 open-source large language model available to developers building AI applications on Cloudflare's developer platform, Workers.

NextEra Energy (NEE) shares are falling after the company reduced its growth expectations through 2026. The company also announced a sale of its Florida city gas utility for $923 million.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

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JULIE HYMAN: Let's check in on some of today's top trending tickers now. Starting with Tesla, those shares are lower after Deutsche Bank cut its price target to $285 from $300. Analyst Emmanuel Rosner there says the EV maker could miss third quarter delivery and production expectations. The larger risk with Tesla, he says, is the downside expectations for 2024 on both growth and earnings.

And, Josh, I think safe to say, Rosner is one of the more closely watched analysts who covers Tesla here. And it is interesting when he says his base case for Tesla is that it will guide to about 2.1 million deliveries next year. Consensus is 2.3.

JOSH LIPTON: Yeah, what he says here is interesting. Because basically, the note summarizes how there was this Deutsche Bank Investor Day. And what he heard at that investor day was that Tesla may no longer plan to expand output in Austin and Berlin factories. So he thinks Tesla will forecast, as you said, 2024 deliveries below the street. But he kind of sees a silver line there. If they're going to, he says, put-- not push so hard on volume, maybe, he says, that could be less pricing pressure. So he still rates this a buy.

JULIE HYMAN: Right. So maybe he says those automotive gross margins that people are watching so closely for Tesla could start to improve a little bit. We'll see. Well, sticking with EVs, let's talk Lucid. Also, those shares are higher on the news that the company is going to open the first ever car manufacturing facility in Saudi Arabia. To start, it has the capacity to assemble 5,000 Lucid vehicles per year. Once finished, it's expected to have the capacity to produce a total of 155,000 EVs, Lucid EVs per year.

So that would be significant. You know, it's interesting, the location of this. Lucid are among-- I mean, they're a luxury EV. They're not-- they're priced above, say, a Tesla, for example. So they, obviously, see in the Mideast a potential for a big market.

JOSH LIPTON: And remember, interestingly, we saw those reports not long ago that Saudi Arabia was talking to Tesla as well about maybe setting up a manufacturing facility, though, of course, Elon Musk quickly shot that down.

JULIE HYMAN: Yeah, but I mean, you have to think about the backdrop as well for Lucid but also for Saudi Arabia. Many of the oil-dependent Mideast countries are now trying to expand, to diversify, and to pivot away from being so reliant just on oil. So this and the outreach perhaps to Tesla, even if it's not-- doesn't come to fruition looks like it's to that effort.

JOSH LIPTON: Exactly right. And the last one here, shares of Cloudflare moving higher today as the cloud and cybersecurity company is joining AI train by launching a new collection of products and apps. These will be aimed at helping customers build, deploy, and run AI models. And this name-- so really the headline here, Julie, is that the company has this partnership with Facebook parent Meta.

And the idea is, from what I understand, Meta will make its AI coding tool Llama 2, right, available to developers building AI apps on cloud for-- Cloudflare's developer program platform. So some are arguing that is good news. Maybe that means more recurring revenue. Maybe that means more usage.

JULIE HYMAN: Right, more usage, exactly. I mean, where we are sort of in this AI cycle is interesting, right? There's all the enthusiasm that happened in the beginning of the year. Now, we're squarely in the product development and monetization phase. And so the market seems to be reacting positively when you get actual products--

JOSH LIPTON: Yup.

JULIE HYMAN: --that are being introduced.

JOSH LIPTON: And then someday maybe actually fresh revenue.

JULIE HYMAN: Yes, making money from those projects. Exactly. All right, let's talk about NextEra Energy. It's sinking today after the company reduced expectations for its limited partner distribution, now estimating per unit growth rate to be between 5% and 8% per year through at least 2026 with a growth rate of 6%.

This company owns wind and solar projects. It's also a utility provider. And the company also announcing a sale today, by the way, also of its Florida City gas utility for $923 million in cash. But that's not, it seems, outweighing some of that other outlook news that the company came out with.

JOSH LIPTON: And by the way, just bring us back full circle talking fed, the CEO saying it is tighter monetary policy, higher interest rates affecting the financing needed to grow distributions at this 12%.

JULIE HYMAN: Yeah, really interesting there as we start to see some real concrete examples of the effect that higher rates are having.