Wall Street is getting nervous about Tesla

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Good morning! In a list that's sure not to upset anyone, a blogger who visited all 50 states decided to rank them.

In today's big story, we're looking at why Wall Street is getting nervous about Tesla.

What's on deck:

• Markets: New data means another potential delay to rate cuts.

• Tech: Your fears about AI might have already been realized for a while.

• Business: He wanted to create a "TikTok killer." It ended up costing investors millions.

But first, the red flags are flying.

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The big story

Tesla trouble

Earnings season is approaching, and Wall Street's already ringing the alarm on a high-profile company.

Analysts are concerned about Tesla's Q1 deliveries, writes Business Insider's Beatrice Nolan. One survey by Bloomberg has analysts' delivery estimates for the most recent quarter down 6% compared to Q4. Tesla is expected to release the figure today.

Tesla won't report its full earnings until later this month, but Wall Street is preparing for trouble. Last week, at least three firms lowered their price targets for Tesla. One analyst called it a "nightmare" quarter for the company, while another firm labeled Tesla "a growth company with no growth."

It's been that type of year for Tesla, which is down 30% in 2024. A shift in EV demand in the US has been a part of the problem, but that's not the only issue.

China, a key partner and market for Tesla, is becoming one of the biggest threats to its business. And Tesla's polarizing CEO, Elon Musk, has given shareholders headaches with an ultimatum.

It doesn't help that the group Tesla has been associated with is largely having a strong year.

The Magnificent Seven was one of the biggest stories in the stock market in 2023. Share prices in the world's biggest tech companies couldn't stop climbing.

This year, results have been a bit more mixed. Nvidia has remained a rocket ship, up over 85% this year. Meta and Amazon have also put up eye-popping returns, rising more than 41% and 20%, respectively, in 2024.

Microsoft and Alphabet's share prices haven't been as extreme, but both have outperformed the S&P 500, which is up more than 10% this year.

Even Apple — down more than 8% for the year — is still far from Tesla's woes. (Apple's main issue, not unlike Tesla, is tied to its drop in a once-favorable market: China.)

It'll be an uphill battle for Tesla. Its newest product, the Cybertruck, is exactly the type of EV shoppers aren't interested in. Instead of big and expensive, data shows the average customer wants smaller, cheaper vehicles.

That doesn't mean Musk doesn't have any tricks up his sleeve. One strategy is getting more Tesla drivers subscribed to its Full Self-Driving software, which can run $199 monthly. It could beef-up Tesla's profit margins and get it back in Wall Street's good graces.

3 things in markets

1. Trump Media takes a nosedive. The share price of former President Donald Trump's media company tumbled as much as 26% after an initial surge. The drop came as a new SEC filing showed a net loss of $58.2 million last year compared to $4.1 million of revenue.

2. Hotter-than-expected factory data cast doubts on a June rate cut. The bond market's expectation of interest rate cuts coming in June dropped below 50%, according to Bloomberg data. It's the result of the ISM manufacturing index expanding for the first time since 2022, another example of the US economy's ongoing strength in the face of high rates.

3. Check out Ken Griffin's first investor letter in years. The Citadel CEO warned investors that 2024 is likely to be "challenging," slammed the US's $34 trillion debt mountain, and laid out the "player-coach" model that shapes his firm's top talent. You can read the full letter here.

3 things in tech

1. It's too late to stop the AI apocalypse. There's a growing fear that AI will upend our lives and put people out of work. But what many people don't realize is just how deeply computerized decision-making has already ingrained itself in every part of our existence.

2. Microsoft downsized its Teams chat app to focus on its Copilot AI tools. According to a leaked memo, the reorganization reduced the number of people working on Teams and created a new central Copilot and "future of work" team.

3. AI giants are scrambling to get their hands on reliable data. Companies like OpenAI and Anthropic are struggling to find enough high-quality data that can be used to train their chatbots. The Wall Street Journal reported that they're mulling synthetic alternatives instead.

3 things in business

1. How the businessman who blew up MoviePass tried to create a "TikTok killer" — and cost investors millions. People close to MoviePass chairman Ted Farnsworth said his playbook was to get involved with a publicly traded company, help raise funding, and drive up the company's stock. Then it would all implode.

2. More Sports Illustrated drama. The owner of the iconic magazine filed a lawsuit against its old publisher on Monday. Authentic Brands Group is seeking $49 million from 5-Hour Energy Drink mogul Manoj Bhargava, who defaulted on a multi-year deal to publish SI in January.

3. Russia's central bank helped Putin secure another term. Experts told BI that Bank of Russia governor Elvira Nabiullina's policies have helped to stabilize Russia's economy in the face of aggressive Western sanctions. However, the former international central-banking star has become as much a pariah in the Western world as Putin because of her support for his regime.

In other news

• Donald Trump posts $175 million appeal bond he owes in NY civil fraud case.

• How vast swarms of drones could transform the future of war.

• 6 things you should never do in a job interview — and what to say instead, according to recruiters.

• McKinsey is offering some staff 9 months of pay and career-coaching services to leave the firm: report.

• Fast-food chains like Burger King, Shake Shack, and KFC are doubling down on digital order kiosks — but watch out, you'll probably end up spending more.

• 7 of the most unique national parks in the US, according to someone who's been to all 50 states.

What's happening today

• Forbes' World Billionaires List will be announced.

• The US presidential primary elections will be held in Connecticut, Delaware, New York, Rhode Island, and Wisconsin.

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. George Glover, reporter, in London.