Tesla and Nvidia Drag Markets Down

Tesla reported mixed Q1 results, with EPS down 40% to 27 cents per share and revenue falling 9% to $19.335 billion. However, the stock rose post-earnings due to CEO Elon Musk’s return to the company after his time with the Trump administration.

A new framework for autonomous vehicles introduced by Transportation Secretary Sean Duffy also provided a boost, lifting Tesla shares over 10% on the news. Since its earnings release on April 22, Tesla shares have risen around 10%, though Monday’s session is seeing some profit-taking after the recent rally.

Nvidia is the biggest laggard in the MAG 7 today. The Wall Street Journal reported that Huawei Technologies is testing its advanced AI processor to compete with Nvidia’s high-end offerings. Huawei's Ascend AI processors aim to rival Nvidia's H100, with sample shipments scheduled for late May. Growing competition from China is weighing heavily on Nvidia shares.

Elon Musk’s xAI is reportedly seeking to raise $20 billion in funding, which is a positive development for Nvidia. However, concerns about rising competition from Huawei are outweighing the good news.