Better Buy: Tesla or Apple?

Brit Ryle

Posted March 6, 2024

I don’t know who was in charge of sending out the invites to this stock market rally, but they seem to have left Apple (NASDAQ: AAPL) and Tesla (NASDAQ: TSLA) off the guest list. 

Pretty ballsy snub too, considering what Apple and Tesla have brought to stock market parties in the past. 

Apple started 2024 with a 5% gap lower to $185 on the very first trading trading day of the year. The stock has peeled off another 8% since to trade at $170 a share. 

Tesla has done even worse. It closed at $248 on January 2, 2024. As I write, the stock is trading around $177. That’s a 28% loss so far this year…

There’s a common thread for both Apple and Tesla, too: China. Domestic Chinese companies are stepping up their competition. 

If you’ve been reading Pro Trader Today for a while, then you’re aware of our concern about U.S. companies that do a lot of business in China. Roughly half of Tesla’s production comes from its Chinese factories. And Apple gets around 20% of its revenue from China. 

So when iPhone sales in China fall 25%, and Tesla has to cut prices, yeah, it’s a problem. 

China already heavily subsidizes its electric vehicle and semiconductor sectors. And support for these sectors is only going to increase because China’s government knows it has to have growth from technology to offset the rolling disaster of its real estate economy.

China’s push to foster its domestic economy will come at the expense of foreign companies.

But Wait, There’s More!

Apple and Tesla have something else in common too – EVs. Apple just announced that it was scrapping its 10-year effort to make EVs. It might seem like losing a potential competitor would be good for Tesla’s market share going forward…

Except that Tesla is already being forced to cut prices to maintain its market share as EV sales growth weakens. That’s taking a bite out of Tesla’s profit margins. And falling margins are a big reason Apple gave up on EVs.

Those are all fairly compelling reasons to leave Apple and Tesla off the 2024 Rally Party guest list. But the biggest reason for the snub is probably because of the theme of the Rally Party – AI. 

What are Apple and Tesla’s AI plans? Yeah, I don’t know either. Samsung already has an AI phone on the market. The most touted AI feature is real-time translation of 13 languages, which is cool, I guess…

I doubt that’s enough to pull iPhone users over to Samsung. But that’s not really the point. Apple just isn’t bringing much to the Rally Party right now. There’s little enthusiasm to buy the stock. 

If anything, sentiment towards Tesla is even worse. Tesla shares have fallen 13% – this week! 

This morning Tesla hit $175 a share, right at its lows from February 5. Tesla bounced strongly off of $175 last month, and it could do it again. That’s why I advised my Profit Windows subscribers to take the 122% profit we had going on some Tesla put options. We’re averaging 37.4% per trade so far this year. If you’d like to learn more about how Profit Windows uses an AI-powered trading agent to scalp quick profits, just click here.  I’m teeing up the next trade this afternoon.

Briton Ryle
Chief Investment Strategist
Pro Trader Today