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      Tesla's earnings caused fluctuations, what's your market outlook?
      Views 6.6M Contents 447

      Tesla's $440 Call Options Still Dominate Even Amid Stock Slide: Options Chatter

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      Luzi Ann Santos joined discussion · Jan 28 20:14
      Tesla's $440 Call Options Still Dominate Even Amid Stock Slide: Options Chatter
      $Tesla (TSLA.US)$'s outstanding contracts of call options remain heavily concentrated in the $440 strike price, signaling optimism for a potential share price rebound before the contracts expires on Friday.
      Shares swung between gains and losses Tuesday, as they struggled to recover from five straight sessions of declines. The stock has been under pressure as investors assess the growth prospects for the electric vehicle maker and the impact of potential tariffs that President Donald Trump has been threatening to impose against shipments from China and the Chinese government's response.
      Tesla's $440 Call Options Still Dominate Even Amid Stock Slide: Options Chatter
      (To see Tesla's options chain, click here. For the U.S. options ranking led by Nvidia, click here.)
      The stock of the EV giant wasn't spared from the broad-based selloff Monday that sent the wider $Nasdaq Composite Index (.IXIC.US)$ declining 3% after Chinese start-up DeepSeek's artificial intelligence (AI) assistant overtook ChatGPT as the top-rated free application on $Apple (AAPL.US)$'s App Store.
      "Tesla aims to become a market leader in autonomous driving and Robotaxi services, where the value comes from autonomous driving software," Seth Goldstein, a strategist at Morningstar, wrote in a note yesterday. "The R1 entrance into AI creates a competition risk for Tesla's autonomous software subscription and Robotaxi businesses," he said, referring to DeepSeek's open-source reasoning model.
      Amid yesterday's stock market selloff, Wall Street likened DeepSeek to the Sputnik moment in 1957 when Soviet satellite Sputnik 1, the first artificial Earth-orbiting satellite, was launched, triggering a technological race between the U.S. and Russia.
      This time, the DeepSeek moment highlighted China's ability to compete with U.S. in the AI race even with trade restrictions that limited the Asian nation's access to advanced semiconductors that power AI applications.
      While Goldstein acknowledged that DeepSeek's R1's entry into AI creates competition risk for Tesla's automonous software subscription and Robotaxi businesses, he said "we think Tesla's advantage in autonomous driving software comes from the billions of miles of full-self-driving software testing and Tesla's ability to process that data to improve the software, not the AI cost."
      Tesla's $440 Call Options Still Dominate Even Amid Stock Slide: Options Chatter
      The EV maker is due to report earnings tomorrow. Analysts, on average, expect Tesla's adjusted earnings to rise 31% to 75 cents in the three months that ended on Dec. 31, estimates compiled by Bloomberg showed. Revenue is seen rising to $27.14 billion, from $25.17 billion a year earlier.
      "More attention will be paid to comments on the outlook including a reiteration (or not) of the 20 to 30% FY24 delivery growth target, Model Y ‘Juniper’ ramp, FSD rate of change, AI infrastructure expansion, Cybercab deployment targets, Optimus milestones, and a potential (and long overdue) deep-dive AI Day," Morgan Stanley analysts including Adam Jonas wrote in its earnings preview released on Jan. 24, days before the DeepSeek news sent fueled declines for the stock and the rest of the market. FSD refers to the full-self driving capability.
      In early January, Tesla disclosed that its production declined to 1.77 million vehicles in 2024, from 1.85 million a year earlier.
      "The DeepSeek 'moment' ultimately brings forward the market's appreciation of what Tesla brings to the table in the emerging AI/robotics 'Embodied AI' arena," Morgan Stanley analysts wrote in a separate note yesterday.
      The advancement in generative AI and large language models directly impacts the advance of foundation model training for robotics, the analysts said. Tesla has played an evolving role in building out the West's physical AI infrastructure, they said.
      "EVs are the 'sockets' for the forthcoming physical ('embodied') AI," the analysts said. "In a future where geopolitical rivals demonstrate increasing competency/rate-of-change we would expect to see an acceleration of government/lawmaker and investor attention on the embodied theme. In our view, this could enhance the market's appreciation for what Tesla brings to the table beyond the EV market."
      Share your thoughts on Tesla in the comments section. What do you expect to be the share reaction when earnings are released tomorrow? Let your voice be heard by voting below.
      Are you bullish or bearish on Tesla
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      • 73241263 : $Bitcoin (BTC.CC)$

      • 73821642 : DEEPSEEK was just a taste. Its about tie regular folks get a fighting chance, this is not just a shiny object, time to spread our wings hopefully without censorship or any hostility. This is whats coming.

      • BearBear98 : of course with all the h1b and rump handing him money. Did you know he was an h1b. H1b steals 100000 well paid jobs from Americans. Also Musk has them working on SpaceX. Isn't this a national security issue!!!!

      • MM2028 : Tesla’s stock remains under pressure following five consecutive down sessions, driven by investor concerns over growth prospects, potential tariffs from a future Trump administration, and rising AI competition from China’s DeepSeek. However, outstanding call option contracts remain heavily concentrated at the $440 strike price, signaling optimism for a rebound before expiration on Friday.

        The recent market selloff, exacerbated by DeepSeek’s emergence as a top-rated AI app, has fueled fears about Tesla’s competitive edge in autonomous driving and Robotaxi services. Despite this, analysts argue that Tesla’s advantage lies in its extensive real-world driving data rather than AI costs alone.

        With earnings due tomorrow, analysts expect Tesla’s revenue to rise to $27.14 billion and adjusted EPS to increase 31% to $0.75. Key areas of focus include delivery growth targets, AI infrastructure expansion, and autonomous vehicle progress.

        From a technical perspective, the stock is poised for a rebound after five straight losing sessions, a pattern historically associated with short-term recovery. Combined with bullish positioning in options and upcoming earnings, Tesla could see a bounce in the near term.

      avatar
      Luzi Ann Santos
      Moomoo Senior News and Community Manager
      Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.
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