It’s been a rather volatile week for investors in Tesla (NASDAQ:TSLA). Some of that has to do with the Nasdaq 100 rebalancing set to take place later this week, which we reported on yesterday. Accordingly, shares of TSLA stock have sagged in recent days before recovering some of those losses today.
That’s because, as part of the so-called “Magnificent 7,” index funds will be forced to sell a portion of their Tesla holdings and re-allocate those funds to other technology companies. The weightings of Tesla and its mega-cap counterparts have simply provided too much concentration risk for the index. Thus, many investors are looking forward to this rebalancing and selling mega-cap tech while buying mid-cap names in the sector.
That said, there’s another key catalyst investors will want to keep an eye on next week. Let’s dive into what this July 19 catalyst is and why it’s a key date.
Investors in TSLA Stock Eagerly Await July 19
Tesla is set to report earnings on July 19, marking the next key day of likely volatility for the stock. Earlier this month, the company reported its production & vehicle deliveries data to investors. On this release, shares of TSLA stock popped but have since given up much of their gains.
Indeed, Tesla has been a difficult stock for investors to predict over the past two years. Following a very aggressive rate hiking program from the Federal Reserve, TSLA stock plunged in 2022. However, on a year-to-date basis in 2023, Tesla is among the biggest outperformers on the Nasdaq 100. Thus, many investors in index funds may not want to see the weights rebalanced.
That said, this upcoming earnings report will be key for long-term investors. That’s because more light will be shed on the company’s margins and how price cuts may have affected the company’s bottom line. Ultimately, rising deliveries and production levels are encouraging, as that should bleed into revenue growth. But in this market, investors clearly want to see profitable (or increasingly profitable) growth. That’s unclear right now.
So, brace for volatility on July 19. I’m betting options activity is likely to pick up over the next week or so. Tesla should be a fun stock to watch.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
