Lucid Rallies, Rivian Drops Upon Contrasting Earning Reports

Good morning. It's November 8th, and in today’s edition, we are exploring Lucid and Sony’s positive earnings, Rivian’s continued supplier shortage problems, and an AI stock that’s surging by more than 40% in premarket trade today.

Previous Close 📈

The S&P 500 and Nasdaq Composite hit record highs on Thursday, with the S&P 500 gaining 0.7% and the Nasdaq jumping 1.5%, closing above 19,000 for the first time. The Dow saw a marginal decline, though all three major averages reached intraday highs during the session.

Futures

U.S. stock futures are slipping slightly this morning. S&P 500 and Dow futures are down 0.1%, while Nasdaq 100 futures have dipped by 0.3%.

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What to Watch

NRG Energy (NYSE: NRG), Baxter International (NYSE: BAX), CNH Industrial N.V. (NYSE: CNH), and Lamar Advertising Company (NASDAQ: LAMR), will announce their quarterly results in the premarket session.

After the market closes, Paramount Global (NASDAQ: PARA) will also announce its results.

On the economic calendar, preliminary Consumer Sentiment for November will be released at 10:00 a.m. ET. Following that, Fed Governor Michelle Bowman is scheduled to speak about banking regulation at 11:00 a.m. ET, and St. Louis Fed President Alberto Musalem will give welcoming remarks at 2:30 p.m. ET.

Automobiles

Rivian Misses on Q3 Revenue But Sticks to Delivery Goals Amid Supplier Issues

Rivian reported a third-quarter revenue shortfall, posting $874 million against the $980 million analysts expected, while also announcing a wider-than-anticipated loss due to a supplier shortage impacting its R1 and RCV platforms on Thursday.

Rivian’s stock is trading 1.35% below yesterday’s close in premarket trade today.

Despite these obstacles, the electric vehicle manufacturer expects to turn a modest gross profit in the fourth quarter, aided by operational improvements.

The company’s adjusted loss per share came in at $0.99, missing estimates of $0.92, with an EBITDA loss of $757 million, higher than the anticipated $657.5 million.

These results come amid disruptions in Rivian’s supply chain, which have led to an increased full-year adjusted EBITDA loss projection of $2.82 billion to $2.87 billion, up from a previous $2.7 billion forecast.

Rivian maintained its annual production guidance of 47,000 to 49,000 vehicles and reaffirmed its delivery forecast of 50,500 to 52,000 units, showing a commitment to its targets despite ongoing challenges.

CEO RJ Scaringe highlighted progress in refining the Gen 2 R1 cost structure and expressed optimism for the upcoming R2 midsize SUV, positioned as a significant growth driver for Rivian.

Rivian’s cash reserves stood at $7.85 billion at the end of Q2, supported by a recent partnership with Volkswagen, which includes a $1 billion initial investment with the potential for up to $5 billion by 2026.

Automobiles

Lucid’s Record Deliveries and Gravity SUV Progress Fuel Positive Q3 Results

Lucid Motors reported third-quarter results exceeding Wall Street expectations yesterday, with revenue hitting $200 million, surpassing estimates of $196.3 million, and marking a significant increase from $137.8 million a year ago.

The electric vehicle maker also narrowed its loss per share to $0.28, better than the expected $0.31, and reported an adjusted EBITDA loss of $613.1 million, outperforming analysts' expectations of $634.4 million.

Lucid is rallying 5.76% in premarket trade this morning.

In Q3, Lucid produced 1,805 vehicles and delivered a record 2,781 units, aligning with its annual production goal of 9,000 vehicles. CEO Peter Rawlinson emphasized Lucid's strong delivery momentum and confirmed that the Gravity SUV, a crucial addition to Lucid’s lineup, remains on track for production later this year.

The Gravity, expected to start at around $80,000, is positioned to compete in the high-demand SUV market and is eligible for the federal EV tax credit.

Lucid closed the quarter with a substantial cash reserve of $5.16 billion, bolstered by an additional $1.75 billion from a recent share sale. This funding, backed by major investors including the Saudi Public Investment Fund, provides a runway to support production goals and cost-cutting efforts as the company scales up.

Rawlinson projects that the Gravity SUV could address a market six times larger than that of Lucid Air, with plans to eventually produce up to 90,000 units per year at its Arizona plant.

Electronics

Sony Revises Forecast Upward as Games and Music Drive Earnings, Stock Surges

Sony Group Corp. is increasing its revenue outlook for the fiscal year, now expecting ¥12.71 trillion ($83.2 billion), driven by strong performance in its music and gaming divisions.

The Tokyo-based company noted a 73% surge in operating profit for the September quarter, attributing gains to the popularity of hit PlayStation titles and a boost in streaming-driven music sales.

Sony’s U.S.-listed shares are surging 5% in premarket trade.

A surprise hit, Black Myth: Wukong, added momentum to PlayStation sales, pushing the forecast for the game and network services division up by 11%. Sony sold 3.8 million PlayStation 5 units during the quarter, with in-house titles like Astro Bot helping offset losses from big-budget flops such as Concord.

This week, the company also launched the PlayStation 5 Pro, aiming to secure market share during the holiday season.

Sony's music division continued to thrive, benefiting from the popularity of streaming services like Spotify, while the anime and smartphone gaming segments gained traction internationally.

However, the company maintained its operating profit outlook due to a slowdown in image sensor demand in North America, primarily impacting its hardware segment.

Challenges remain for Sony’s movie division, which is still recovering from last year’s Hollywood strikes and declining ad revenue in India. Looking ahead, Sony anticipates further growth in gaming with upcoming releases like Monster Hunter Wilds and Grand Theft Auto VI.

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Li-Cycle Holdings Corp. [LICY] - Last Close: $3.61

Li-Cycle Holdings Corp. is seeing a major stock jump, up 46.5% in premarket trading today.

The company reported much better earnings than expected yesterday, with earnings per share at $2.43.

Revenue rose nearly 79% to $8.4 million, beating predictions.

They also managed to cut their operational losses, reporting an adjusted EBITDA loss of $21.7 million compared to a $41.4 million loss last year.

Moreover, the firm also announced that it has gained a significant $475 million loan from the U.S. Department of Energy to advance its Rochester Hub project in New York.

These financial improvements have boosted investor confidence, driving up the stock.

Doximity Inc. [DOXY] - Last Close: $43.42

Doximity is surging 46% during premarket trading today.

The digital platform for medical professionals reported a 20% increase in revenue, reaching $136.8 million yesterday.

Net income rose 44% year-over-year, while operating cash flow surged by an impressive 430% to $68.3 million.

Additionally, the company achieved a high adjusted EBITDA margin of 55.7%, indicating effective cost management.

Doximity also provided optimistic guidance for the coming quarters. It expects revenues between $535 million and $540 million for the full fiscal year.

Innodata Inc. [INOD] - Last Close: $24.34

Innodata's stock is up 44% in premarket trade due to impressive third-quarter results highlighting its success in the booming AI sector.

The company reported a 136% year-over-year revenue increase, reaching $52.2 million, alongside a big jump in net income.

With strategic partnerships and expanding contracts with major tech companies, especially in generative AI, Innodata also raised its revenue forecast for 2024, leading to investor optimism.

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Everything Else

• Fed Chair Powell responded to Trump’s potential firing threats, stating it’s “not permitted under the law.”

• Amazon may tie a new Anthropic investment to increased use of its Trainium AI chips.

• Embraer’s Q3 profit soared as net revenue climbed to 9.39 billion Reais.

• Cybertruck leasing options were unveiled by Tesla, with monthly payments starting at $999.

• The World Food Price Index climbed to its highest level since April 2023 as staple costs increase.

• China unveiled a $1.4 trillion stimulus and will target debt reduction, but it has limited focus on consumer demand.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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