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Tesla Model 3 Reservations Hit 232,000, Draw Response From Google CEO

Loading the player…   Tesla Motors ( TSLA ) CEO Elon Musk tweeted Friday night “now 232k orders” for the Model 3 that was unveiled Thursday night after reservations for it opened around the world that morning. It’s far more than expected and Musk said Friday “definitely going to need to rethink production planning.” The strong reception for the Model 3 spurred a congratulatory tweet on Twitter Friday night from Sundar Pichai, CEO of tech giant Google, a unit of Alphabet ( GOOGL ). He replied to Musk’s update on Model 3 reservations with: “congrats, exciting times!” . @elonmusk congrats, exciting times! — sundarpichai (@sundarpichai) April 2, 2016 The Model 3, like Tesla’s Model S and Model X, will have some Autopilot self-driving capabilities. Google famously has its Google Self-Driving Car in development, expected to be more a people transporter than a car that a human would drive some of the time. Tesla stock rose on Friday after Thursday night’s Model 3 launch party in Los Angeles tallied ramped-up reservations and revealed a good-looking design with glass on the back half of the roof clear all the way to the trunk. A reservations odometer actually spun at times during the event, moving past 134,000 while the afterparty was still going strong, outpacing the estimates of Tesla analysts. At $35,000 per car, that would amount to almost $4.7 billion in potential revenue when the Model 3 is actually delivered. The deposits are $1,000 a pop and said to be fully refundable. “According to management, reservation orders surpassed 150K during the evening (and presumably still growing beyond our two incremental reservations early this morning),” Stifel auto analyst James Albertine said in an overnight research note. That “is roughly 10x the 15-20K we expected in the first days of the launch and 50% greater than the 50-100K we expected by the end of this year.” He added: “Thoughts. We are simply awestruck by the demand surfacing for the Model 3.” CEO Musk tweeted out in early afternoon that reservations had nearly hit 200,000. Thought it would slow way down today, but Model 3 order count is now at 198k. Recommend ordering soon, as the wait time is growing rapidly. — Elon Musk (@elonmusk) April 1, 2016 Musk’s comment about the wait time is key. Model 3 production will take time to ramp up. Even if the deliveries begin in late 2017, as scheduled, it could be well into 2018 or beyond before people reserving today actually get their Model 3. Shares rose as high as 247.90 on the stock market   Friday, the best since early October. But gains cooled, with Tesla stock closing at 237.59, up 3.4%. Tesla is not currently highly ranked by IBD, with a Composite Rating of just 34 out of a possible 99, factoring in its earnings growth record, stock market performance and other metrics. The Model 3 pre-order window opened around the world Thursday at Tesla stores. “Orders for the Model 3 in the last 24 hours have just passed 115,000,” Musk announced at the 8:30 p.m. Pacific Time launch on Thursday. Lines at some Tesla stores had stretched far. The rest of the Thursday reservations were racked up during the event, where a bevy of Tesla Model S, Model X and Roadster owners conversed over the din of a DJ. “Orders for the Model 3 in the last 24 hours have just passed 115,000,” Tesla CEO Elon Musk just said. $TSLA #Model3 pic.twitter.com/ZWWb9LmhGj — Donna Howell (@IBD_DHowell) April 1, 2016 Several people IBD spoke with who already own at least one Tesla also ordered a Model 3 at the launch party. PCs were set up to take reservations online, with the general window for online reservations opening shortly before Musk took the stage to introduce the new car. Sleek, fast (we took a test ride) and smaller than its siblings, the  Model 3 is slated to roll off the assembly line in late 2017. It’s seen competing with the BMW 3 Series and similarly priced entry-to-midrange luxury vehicles from Volkswagen ‘s ( VLKAY ) Audi,  Daimler ‘s ( DDAIF ) Mercedes-Benz and Toyota ‘s ( TM ) Lexus, as well as electrics like the General Motors ( GM ) Chevrolet Bolt and a variety of hybrids. Tesla’s challenge now is ramping up production to meet the better-than-expected demand on time, and pushing down battery costs enough to profit with a car half the price of its last two models. About half of the current Tesla owners that IBD spoke with at the launch event expect the Model 3 to come out on schedule. The others wouldn’t bet on it. Tesla’s last model unveiling, also at its design facility in Los Angeles, was the Model X crossover in February 2012. After delays, that finally started going to reservation-holders at the end of September 2015. Bob and Linda Ashmore of San Carlos, Calif., have a Roadster and a Model S, and just put in a reservation for a Model 3. “We ordered one today here, so we’re looking forward to seeing what it’s actually going to look like,” Bob Ashmore told IBD as the launch party was getting started. He expects it to be built on time, and he and Linda have visited the factory several times. “They’ve got plenty of capacity,” Bob Ashmore said. “This has been a dream and vision of Tesla from the beginning,” Linda Ashmore said. “To get an affordable car for the masses.” RELATED:  Tesla Motors Model 3 Revealed .

Chipmaker Intel Floats On Amazon, Google, Facebook Cloud Sales

No. 1 chipmaker Intel ’s ( INTC ) “winning lottery tickets” — Super 7 and Next 50 clients — will push continued double-digit sales for its Data Center Group, Jefferies analyst Mark Lipacis said Friday. But Intel’s “Cloud Day” event on Thursday didn’t lift Intel stock much on Friday; it closed up only a fraction, at 32.45. Intel stock is down 6% year to date, but it’s been on a three-week run since hitting a seven-month low of 28.22 on Feb. 11. On Thursday, at its Data Center Group (DCG) conference, Intel unveiled a new Xeon processor and a 3D Nand chip — the tech was developed with Micron Technology ( MU ) — and reiterated its commitment to help install “the next 10,000 clouds.” Lipacis wrote in a research report, “Intel’s new products and ongoing initiatives are making it easier to deploy clouds.” Easier cloud deployment should drive incremental demand for Intel’s high-margin microprocessors, he noted. Lipacis has a buy rating and 39 price target on Intel stock. Intel refers to its big DCG customers as the Super 7. They are  Alibaba ( BABA ), Amazon.com ( AMZN ), Baidu ( BIDU ), Facebook ( FB ), Alphabet ( GOOGL ), Microsoft ( MSFT ) and Tencent ( TCEHY ). Intel’s Super 7 sales rose at a 30% compound annual growth rate between 2012 and 2015, RBC Capital analyst Amit Daryanani wrote in a research report. Its Next 50 customer base grew at 40% compound annual growth rate (CAGR) over that span. Daryanani figures that the Super 7 comprised 75% of cloud sales in 2015, but Lipacis says that the Next 50 are growing twice as fast. Although PCs continue to represent 60% of Intel’s total sales, the chipmaker is making a smart grab for the cloud market, Daryanani wrote. “Intel is positioning itself at the center of cloud development,” Daryanani wrote, hiking his price target on Intel stock to 33 from 31 and maintaining his sector perform rating. DCG sales are slated for 20% growth through 2019, with a third stemming from the cloud business, Daryanani said. Assuming that DCG is 30% of sales in 2016, cloud revenue alone will account for 10% of Intel’s total revenue. On Thursday, Intel announced its builders program to accelerate adoption of network functions virtualization, and highlighted its nine-month-old Cloud for All initiative. Cloud for All aims to make it easier to deploy agile and scalable cloud platforms. It could be “a potentially positive driver for enterprise server spending (about 35% of DCG revenue),” Credit Suisse analyst John Pitzer wrote in a report. Pitzer rates Intel stock an outperform and has a 40 price target.

These 5 Leading Tech Stocks Have Major Hurdles To Clear

Loading the player… The market has been in a confirmed uptrend for weeks now, but leading tech stocks still have some hurdles to clear: Apple ( AAPL ) and Amazon ( AMZN ) are hitting resistance at psychological price levels, while Netflix ( NFLX ) has yet to clear its 200-day line. And Facebook ( FB ) and Google parent Alphabet ( GOOGL ) are in bases, but they’ve yet to break out of them. Apple shares are hitting resistance at the 110 price level for a third session in a row, rising 0.9% Friday. And the stock is still trading below its 200-day moving average, a critical level. But Apple has been able to climb about 19% from its late January low. It’s now trading 18% below its all-time high, set at the end of last April. Amazon is also hitting resistance, with shares struggling to break above the 600 price level. The stock’s 50-day and 200-day lines recently crossed but are moving nearly in sync as shares move higher. Amazon is trading 14% below its all-time high of 696.44 and a buy point that’s 10 cents above the high, rallying 0.8% Friday. Meanwhile, Netflix has yet to clear its 200-day line, though it has been trading near that level for the past few sessions. Shares are about 21% below their high, which they reached last December, but they’re 31% above their February low. The stock was up 3.4% Friday. Facebook is trading about 1% below a 117.69 buy point and rose 1.7% Friday. In Wednesday’s session, the stock came within 70 cents of the pivot. And Alphabet has been steadily moving higher for about two months, but it’s still 5% below an 810.45 buy point. Alphabet edged up 0.9% Friday.