Now it's Tesla's turn to face its "DeepSeek moment"
Tesla's recent decline mirrors NVIDIA's situation from two weeks ago. BYD held a "Vehicle Intelligence Strategy" conference, unveiling their "God's Eye" advanced intelligent driving system and 21 new models.
Autonomous driving systems available in vehicles under $70,000 - essentially unmatched in the industry.
The Morgan Stanley analyst who previously hyped Tesla to $800 now calls BYD's "God's Eye" autonomous driving update the "DeepSeek moment" for autonomous vehicles.
While not explicitly naming specific autonomous vehicle companies, which other companies maintain high valuations based on autonomous driving promises?
The hype that even earnings couldn't break was shattered by BYD, leading to a delayed earnings-related decline.
Last earnings, some bet on a drop to 340-350, which we're now approaching.
Tuesday's institutional bull spread strategies shifted to 365-377.5 and 370-382.5 ranges.
Both institutions and retail(?) opened large call positions, with this week's calls outweighing puts, suggesting a rebound. Longer-term puts still target 300.
However, hype is just hype - Tesla and BYD aren't direct competitors, and the market can support multiple automakers. This sharp decline reflects panic selling.
While a rebound is likely, repairing broken sentiment will take time. A quick return to 400 is unlikely, so manage expectations.
Institutions moved long calls to 350 $TSLA 20250417 350.0 CALL$ $TSLA 20250417 355.0 CALL$ . The stock will likely consolidate around this level for a while.
I have sell puts at 320 but see no urgency to add positions. Near-term trend remains choppy, better to let time decay work.
Major positive news: The $200M trader rolled up their strike price from 110 to 120, increasing position by 20,000 contracts.
Rolled into $NVDA 20250417 120.0 CALL$ with 100,000 contracts, transaction value $203M.
Other long call strategies moved to 130 $NVDA 20250417 130.0 CALL$
Tuesday's option activity shows positioning for positive earnings, with bullish volume focusing on longer-dated out-of-money calls up to 140. Notable put activity suggests positioning for next week's short-term pullback, creating potential buying opportunities on dips.
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