Dow Jones Futures: Tesla Deliveries Due, Nvidia Forges New Buy Point

Dow Jones Industrial Average (DJIA) futures are trading lower today, with investors awaiting Tesla's (NASDAQ: TSLA) fourth-quarter delivery numbers and Nvidia's (NASDAQ: NVDA) new buy point. As of writing, DJIA futures are down 0.3% at 39,500, reflecting a cautious market sentiment ahead of these key events.

Tesla's EV deliveries are expected to be announced on Jan. 2, 2025, and investors are eager to see if the company can maintain its momentum despite a challenging year. Tesla's stock has soared by 86% year to date, driven by investor optimism surrounding Elon Musk's relationship with the incoming Trump administration and the potential for regulatory tailwinds. However, the company's core business performance has been lackluster, with EV deliveries on track to decline in 2024.

Analysts expect Tesla to report its fourth-quarter production and delivery numbers for its electric vehicles (EVs) on Jan. 2, 2025. If the decline in deliveries continues in Q4 2024, it could have a negative impact on Tesla's stock price, as EV sales still account for 79% of the company's total revenue. A decline in deliveries could make it difficult to justify further upside in its stock, especially given its current high valuation.

Nvidia, on the other hand, has been on a tear in 2024, with its stock soaring more than 180% thanks to tremendous demand for its graphics processing units (GPUs). The company's GPUs are the gold standard for training and deploying large language models (LLMs), and its success is seen as a reflection of the broader trend towards accelerated computing. Nvidia's addition to the high-flying Nasdaq-100 index in December 2024 further validated its strong performance and potential for continued growth.

However, Nvidia's recent momentum has been driven by several key factors:

1. Tremendous demand for its graphics processing units (GPUs): Nvidia's GPUs are in high demand due to their use in training and deploying large language models (LLMs) for AI applications. This demand has led to a significant increase in the company's stock price, with shares soaring more than 180% in 2024.
2. Shift from general-purpose computing to accelerated computing: Nvidia's CEO, Jensen Huang, argues that a major shift from general-purpose computing to accelerated computing is underway. While AI is a significant part of this trend, it would happen even if there wasn't surging demand for AI.
3. Strong financial performance: Nvidia has delivered solid and continually accelerating revenue growth in each reported quarter. This financial strength has contributed to the company's stock price momentum.

Nvidia's recent performance and new buy point align well with the broader AI and technology sectors. The company's success is seen as a reflection of the overall strength of these sectors and the continued demand for AI-related technologies. However, the sustainability of Nvidia's growth depends on several factors, including continued demand for AI and accelerated computing, innovation, and the company's ability to adapt to market conditions and competition.

In conclusion, while Tesla's EV deliveries are expected to be a key focus for investors in the coming days, Nvidia's recent performance and new buy point suggest that the company remains well-positioned to capitalize on the broader AI and technology trends. However, investors should remain cautious and monitor the market's reaction to these key events before making any investment decisions.