Nasdaq loses 245 points as Tesla, Citrix sell after gains

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Thursday was a bad day on Wall Street, and the Composite Nasdaq (NASDAQINDEX: ^ COMP) and Nasdaq-100 suffered the largest declines among major benchmarks. With declines of around 2.5%, the Nasdaq indices suffered much greater losses than the Dow Jones Industrials and the largest S&P 500 – not to mention the flat performance of the small cap Russell 2000.

Investors had anticipated the results Tesla (NASDAQ: TSLA) for months, and in the classic way of selling the news, shares of the electric vehicle maker fell even after shareholders got the profit they hoped to see. Meanwhile, Citrix Systems (NASDAQ: CTXS) also posted earnings, and while its numbers were strong, they couldn’t meet investors’ high expectations of the tech company.

Tesla is almost certainly tied to the S&P 500

Tesla shares were down 5%, helping to push down Nasdaq indexes. Interestingly, the stock traded higher in the after-hours session Wednesday night immediately following its earnings report, but investors apparently had their doubts as regular trading ended on Thursday.

Image source: Tesla.

Tesla’s results were generally better than most had expected. Revenue for the second quarter of 2020 was $ 6.04 billion, and while that was down from last year’s second quarter numbers, the top line held up well in the face of the pandemic of coronavirus. The company wrote off a loss a year ago with solid adjusted earnings of $ 2.18 per share.

Mainly for the purposes of including the S&P 500, Tesla also posted positive GAAP earnings of $ 0.50 per share. This marked four straight quarters of profits, which was the last remaining hurdle for the electric vehicle maker to qualify to join the S&P 500.

However, opponents have taken a close look at some things. Gross margin benefited from a one-time sale of zero emission credits, which added to revenue. In addition, Tesla is still not sure whether it will be able to meet its target of delivering 500,000 vehicles in 2020. For a stock that was arguably priced perfectly, it was apparently a little too many wild cards for shareholders. adopt.

Citrix can’t satisfy growth-hungry investors

Elsewhere, Citrix Systems saw its inventory drop 13%. Even though the virtualization company’s second quarter went fairly well, investors didn’t see it that way, which clearly showed their disappointment with the stock price reaction.

Citrix sales increased 7% from the previous year quarter, driven by a 54% increase in annual recurring revenue from subscriptions. This produced adjusted earnings of $ 1.53 per share. Both numbers were stronger than the consensus forecast among those watching the action.

However, some expected Citrix to deliver overwhelming results for the consensus that investors saw other companies capitalizing on the big shift to remote working. With many corporate customers focusing on the fixes they need immediately to keep operating in the COVID-19 world, Citrix has failed to attract customers to its cloud platform as quickly as it l ‘had initially hoped. This could affect revenue growth later in 2020 and beyond.

In the long term, Citrix’s business remains healthy. But with the stock having climbed 50% since the start of the year just before the announcement, today’s pullback appears to be just a break in a long bull run for the tech company.



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