Tesla's sales slump, company preparing for tariff impacts, potential benefits from upcoming tariffs
From Nasdaq: 2025-04-09 09:46:00
In a podcast recorded on April 2, analysts discuss how companies are preparing for tariff impacts, Tesla’s sales slump, and the potential effects of President Trump’s tariff announcement.
Motley Fool contributor Jason Hall and host Ricky Mulvey analyze Texas Instruments and Taiwan Semiconductor for investment opportunities.
A “Double Down” stock recommendation is issued for three companies, highlighting past returns like Nvidia’s $249,730 if $1,000 was invested in 2009.
President Trump’s tariff announcement aims to boost US manufacturing and jobs, but the uncertainty surrounding the details has caused market anxiety. Short-term pain is expected in the market due to recent downward moves, but long-term effects like increased American manufacturing and jobs will take time. Business leaders need to analyze the impact of tariffs before making plans, as seen with companies like Johnson & Johnson and Walmart making moves to counter Trump’s tariffs.
Companies like Nike are adjusting margins to absorb tariffs, while others like Target and Best Buy are warning customers of price increases. CEOs should prepare their companies by making advanced purchases, running scenarios, and leveraging buying power like Walmart to mitigate the impact of tariffs on their business. Tesla’s first quarter vehicle sales fell short of expectations. Tesla’s sales slump may be due to Musk backlash and waning demand. A potential uptick in sales could come from the upcoming 25% tariff on all imported cars and car parts, as Tesla produces many vehicles in the US. Analysts believe Tesla could benefit from the tariff changes and see increased sales in the future.
Texas Instruments and Taiwan Semiconductor are two key players in the semiconductor industry. Taiwan Semiconductor, known as TSMC, manufactures leading-edge logic chips for smartphones and GPUs. Texas Instruments is a fully integrated semiconductor manufacturer, designing and producing its own chips. Analysts predict that Texas Instruments may outperform Taiwan Semiconductor in the next five years. Texas Instruments continues to sell chips designed in the 80s for industrial use through direct sales on their website, serving over 100,000 customers. Their analog and integrated chips interface electronic devices with the real world, contrasting with TSMC’s logic and memory chips for the virtual world.
Semiconductor stocks remain cyclical, driven by market demand. TSMC benefits from AI and cloud computing’s growth, leading to a super cycle. Texas Instruments is facing challenges in their analog business, with a downturn in demand offsetting gains in their integrated business.
TSMC’s success is tied to AI and smartphone demand, being a key contract manufacturer for advanced chips. The company’s role in national security for Taiwan adds a political risk factor. Expansion plans in the US and Europe aim to mitigate this risk, but individual risk tolerance is crucial for shareholders. Investors are considering reducing exposure to TSMC despite growth potential. Texas Instruments has underperformed indices but has shown a 14.7% annualized return. The company’s transition in leadership and steady investment during downturns suggest long-term potential. TSMC may face challenges as the market shifts to upgrade cycles. TXN’s structural cost advantages could lead to future outperformance.
TXN is seen as a more stable investment compared to TSMC due to its focus on analog processes and steady spending during downturns. TSMC’s CapEx spending is expected to increase after a period of monetization, potentially leading to oversupply in the market. TXN is nearing the end of its current CapEx cycle and could leverage cost advantages for future growth. Both companies have unique strategies for navigating the semiconductor market.
David Meier has no position in mentioned stocks. Jason Hall holds positions in Nvidia, TSMC, and Texas Instruments. Mary Long has no position in mentioned stocks. Investors should not solely rely on information for buying or selling decisions. Motley Fool Money team provides insights following editorial standards. 1. Ricky Mulvey, who has positions in Texas Instruments, discusses various stock positions in companies like Advanced Micro Devices, Apple, Best Buy, Nike, Nvidia, and more. The Motley Fool recommends Johnson & Johnson and has a disclosure policy in place.
2. The Motley Fool also holds positions in Taiwan Semiconductor Manufacturing, Target, Tesla, Texas Instruments, and Walmart. The views and opinions expressed in the article are solely those of the author and may not align with Nasdaq, Inc.
3. Investors can gain insights into stock recommendations and positions held by The Motley Fool, including top companies like Apple, Nvidia, and Best Buy. With a variety of stock positions in different sectors, readers can make informed decisions based on expert analysis and recommendations.
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