Nvidia stock (NASDAQ: NVDA) took a beating on Tuesday, falling below a key support level and wiping out roughly $340 billion in market value.

Investors are clearly jittery as tech in general has been shaky, and Nvidia’s run this year, which felt unstoppable, suddenly looks more fragile.

A week ago, everyone was talking about it as a top performer; today, the mood has shifted fast. No one’s claiming this is the end for the chipmaker, but it’s a sharp reminder that the market can turn on a dime.

Nvidia stock: Breaking below key technical levels

Nvidia stock had been flying high in mid-August, hitting new peaks, but lately the stock’s been taking it on the chin.

By September 2, it was hovering around $174, down over 6% from that $183 high just a couple of weeks back.

The drop pushed it under the 50-day moving average, a number traders obsess over (and for good reason).

Crossing that line usually sets off warning lights for some folks, suggesting the stock might drift lower or just hang around sideways for a bit.

Trading volume spiked on the sell-off, showing that a lot of investors were moving around fast.

Market chatter points to a broader tech slump as folks are worried about slowing semiconductor demand and the cyclical swings in Nvidia’s core GPU business, especially in gaming and data centers.

On top of that, some analysts are nervous that the AI-driven frenzy that fueled Nvidia’s rally earlier this year might be starting to cool off.

What analysts say?

Analysts are starting to get cautious after Nvidia stock sudden drop.

Morgan Stanley, for example, just moved the stock from “overweight” to “equal weight,” pointing to growing uncertainty around AI-driven sales and some inventory adjustments in the semiconductor supply chain.

The bank says the recent pullback looks like the stock hitting a valuation ceiling, prompting growth investors to take some profits off the table.

JPMorgan is sounding similar notes, flagging supply-demand mismatches and broader macro pressures as short-term but meaningful headwinds.

The bank expects Nvidia’s data center revenues could ease in the coming quarters as AI infrastructure spending starts to plateau.

Still, analysts are keeping a long-term positive view, pointing to Nvidia’s tech edge and diverse product lineup as buffers that could help the company ride out near-term volatility and cyclic swings, setting the stage for a potential rebound in valuation down the line.

A few technical analysts are flagging the break below $175 as a signal for investors to stay alert as there could be more downside, or the stock might stabilize if it finds support around $165–$170.

Nvidia has bounced back from short-term pullbacks before, but right now the backdrop isn’t exactly friendly: interest rate jitters and geopolitical issues affecting supply chains add extra risk to the mix.

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Some of the biggest finance news stories this week is the upcoming Gemini, Figure, and Klarna IPOs that will see them raise millions of dollars in the United States.

These companies join other major firms that have gone public this year, including Coreweave, eToro, Webull, Bullish, and Circle. This article looks at some of the potential companies that may go public after the Klarna IPO.

SpaceX 

Elon Musk’s SpaceX is one of the top companies that has always been watched in terms of going public because of its market share in the space industry and its valuation.

According to Forge Global, SpaceX stock price has jumped from $80 in 2023 to $239 today in the private market, with its valuation being $452 billion, making it the biggest privately owned company.

SpaceX has raised billions of dollars in the past few years from companies like Draper Fisher, Craft Ventures, and Fidelity. 

Owebrer, the company has not committed to go public any time soon, and chances are that it will not because of the Trump and Elon Musk beef. 

Read more: Klarna IPO is coming: will its stock be a good buy?

Stripe

Stripe is another top company to watch after the Klarna IPO. It is a top company offering payment solutions to some of the world’s largest companies. Its customers are the likes of OpenAI, Google, Anthropic, and Shopify. 

The company competes with some well-known brands in the checkout, like Klarna, PayPal, and Square. 

It has been one of the most popular companies among investors, which has brought the valuation to over $92 billion. It has raised fund from companies like Sequoia, a16z, Thrive Capital, General Catalyst, and Baillie Gifford. 

Stripe has not revealed when it will go public. Like SpaceX, its listing will be popular because of its growing market share in the payment industry. 

Kraken

Meanwhile, Kraken Exchange could be one of the top IPOs as the company has confirmed that it will go public in 2026. Odds are that the IPO may happen this year after the success of Bullish and Circle. 

Kraken is a major player in the crypto industry as it ranks as the second biggest player in the United States after Coinbase. It made headlines recently when it acquired NinjaTrader, Capitalise, and Staked. 

The Kraken stock price has surged to $42 on Forge, with its current valuation being $13.1 billion. Its investors are companies like Bloom Capital, Digital Currency Group, and Blockchain Capital. 

Revolut

Revolut, a top British fintech company, made headlines when it made a secondary share sale at a $75 billion. This is a major improvement from the $45 billion it received last year.

The company made a profit of over $1.5 billion last year, helped by its booming crypto business. Its revenue jumped to £3.1 billion, up from £1.8 billion a year earlier. 

Revolut has not commented on its IPO, but industry analysts believe that the company will list either in London or in the United States. 

The other top companies that could go public are Databricks, Ripple, and Figure AI.

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A profound and dramatic divergence is splitting the global financial world on Wednesday, as Asian markets defiantly break ranks with a wounded Wall Street.

Instead of following America’s lead, the region is marching to the beat of its own drum, a rhythm dictated by a stunning geopolitical power play in Beijing, a brewing storm in the Japanese bond market, and a complex tapestry of local economic data.

Overnight, all three major US benchmarks ended in the red, a clear signal of risk-off sentiment.

But as a new day dawns in the East, that signal is being largely ignored, with a far more intricate and captivating story unfolding.

A spectacle of power in Beijing

The day’s most powerful spectacle is taking place in China, where President Xi Jinping is presiding over a grand military parade, a carefully orchestrated event to commemorate the 80th anniversary of the end of World War II.

The guest list itself is a geopolitical statement, with 26 world leaders in attendance, most notably Russian President Vladimir Putin and North Korean leader Kim Jong Un.

The sight of these three adversaries to the West standing together is a potent symbol of a shifting world order.

Chinese markets have responded with quiet confidence, with the CSI 300 ticking up 0.24% and Hong Kong’s Hang Seng index rising 0.86%.

A bond market warning flashes in Tokyo

While China projects military and diplomatic might, a financial storm is brewing in Japan.

The Nikkei 225 has lost 0.41%, but the real drama is in the bond market, where a dramatic sell-off is sending a powerful warning signal.

Yields on Japanese Government Bonds have surged, with the yield on the 30-year bond climbing to 3.279%, surpassing its recent high.

Meanwhile, yields on 20-year bonds have hit their highest level in 26 years, a significant and painful move that signals deep investor anxiety about the country’s fiscal future.

A day of contradiction down under

The day’s contradictory nature is perfectly encapsulated in Australia. The country’s second-quarter GDP data came in surprisingly strong, with the economy growing 1.8 percent year-over-year, decisively beating forecasts.

Yet, this bullish economic report has failed to inspire the stock market, with the S&P/ASX 200 benchmark falling a sharp 1.09%.

This disconnect highlights the deep uncertainty gripping investors, who seem more focused on global headwinds than on positive domestic news.

A bruising reversal on Dalal Street

This mood of uncertainty is also casting a shadow over Dalal Street. After a strong opening in the previous session, the Indian market suffered a brutal late-session reversal, with profit-taking overwhelming the bulls.

The Sensex ended nearly 600 points below its intraday high, a sign of deep fragility. Now, as a new day begins, the market is poised for a weak opening, with the GIFT Nifty indicating a bearish start.

The reversal has put traders on high alert, setting the stage for a volatile and unpredictable session.

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A day of high drama and unexpected developments is unfolding across the Asia-Pacific, as the international debut of Kim Jong Un’s young daughter in Beijing fuels intense succession speculation, a mysterious trading delay hits the world’s premier metals market, and a surprisingly strong economic report from Australia upends interest rate expectations.

Here’s your one-stop stand to catch up on all the headlines you may have missed.

Kim Jong Un’s daughter makes her international debut in China

In a move that has sent shockwaves through the world of international diplomacy, North Korean leader Kim Jong Un’s teenage daughter has made her international debut, appearing at his side during his high-profile visit to China.

The young girl, thought to be named Ju Ae and aged around 12 or 13, emerged from her father’s bulletproof train in Beijing, intensifying speculation that she is being groomed as his eventual successor.

Her first appearance at an overseas diplomatic event draws a direct parallel to Kim’s own visit to China in 2010 with his father, a trip that was seen as a key step in his own path to power.

While the famously opaque regime has not confirmed her status, South Korean intelligence has stated she is receiving lessons to one day take over the country.

Copper retreats from a five-month high as China outlook wavers

After a powerful rally that saw it briefly touch its highest price since late March, copper has cooled, as traders weigh the uncertain outlook for supply and demand in the world’s top market, China.

The wiring metal, which gained 3 percent in August and started September strong by surfacing above $10,000 a ton, is now facing a more complex picture.

While a weaker dollar and the prospect of US rate cuts have provided support, the state of the Chinese market is now in sharp focus.

Optimists point to higher import premiums and the possibility of domestic supply constraints, with one analyst noting that reduced supply and stable demand should support prices.

London Metal Exchange delays start of Asia trading by 90 minutes

The London Metal Exchange (LME), the world’s center for industrial metals trading, experienced a mysterious and unexplained delay to the start of its Asian trading session on Wednesday.

The electronic platform, which usually opens at 8 a.m. Beijing time, did not begin trading until 9:30 a.m. Brokers circulated messages about the 90-minute postponement without providing a reason, according to LME traders.

After the late start, copper futures in London climbed to their highest level since March.

The exchange did not immediately respond to a request for comment on the cause of the delay.

Australia’s economic growth beats forecasts, boosting case for RBA to hold

Australia’s economic growth accelerated in the second quarter, a surprisingly strong performance that has reinforced the case for the Reserve Bank to keep interest rates on hold later this month.

Gross domestic product advanced 0.6 percent in the three months through June, faster than the predicted 0.5 percent and double the pace of the prior quarter.

The 1.8 percent annual expansion also decisively beat forecasts. The robust figures, led by strong household consumption, “should put to bed fears around growth tailing off,” said one analyst.

Money markets are now sticking with their expectation that the central bank will stay on hold in September before potentially cutting rates in November.

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Scottish Mortgage stock price has surged in the past few months as technology companies have rebounded. It rose from a low of 776p in April to a high of 1,106p. Recently, it has retreated to 1,077p as some large technology companies slumped. This article explores whether SMT is a good buy today.

SMT share price is benefiting from the tech boom

Scottish Mortgage is one of the top players in the technology industry in the UK. While its name has mortgage in it, its business is not involved in the industry. 

Instead, it invests in top publicly traded and private companies, with most of its portfolio names being in the United States. Its most recent results showed that it had over £14.7 billion and a market capitalization of £12.1 billion, giving it a discount of 10.3%.

Elon Musk’s SpaceX is the biggest company in the fund, accounting of it portfolio. It is followed by Mercadolibre, Amazon, Meta Platforms, TSMC, Bytedance, NVIDIA, and Spotify.

This portfolio means that the fund is exposed to some of the biggest themes globally. For example, TSMC is a key company due to its significant presence in the semiconductor industry. 

Chip companies like NVIDIA and AMD would struggle to exist without TSMC. Scottish Mortgage also owns a stake in ASML, another equally important company that makes machines used in making chips. 

The other top parts of Scottish Mortgage’s portfolio are PDD Holdings, Wise, Tempus AI, Stripe, Roblox, Adyen, and Shopify. 

Top catalysts and risks for the Scottish Mortgage

There are potential catalysts for the Scottish Mortgage stock price are the ongoing AI boom and the ongoing initial public offering (IPO) boom in the tech space. 

There are signs that the AI boom is continuing, as evidenced by the recent Nvidia earnings. The company’s revenue jumped by 53% in Q2 to $46 billion. Analysts believe that its revenue will rise to over $200 billion this year, and over $500 billion in the next few years. 

Meanwhile, there are signs that more private companies are considering going public this year. Some notable names like Circle and CoreWeave have already launched their IPO, while Klarna’s listing will come this month. 

A strong IPO boom may push more companies, including those in its portfolio higher. Some of the top firms in its portfolio that may go public in the next few years are SpaceX, OpenAI, Stripe, Databricks, Revolut, and Canva.

The stock may also receive a boost from Federal Reserve interest rate cuts, which normally benefit companies in the tech industry. 

There is a risk to SMT though. The biggest one is the potential slowdown in the AI space, which Nvidia has warned is happening. Such a move would drag its performance over time. 

Scottish Mortgage share price technical analysis

The daily chart shows that the SMT stock price has pulled back in the past few days. Most of the weakness happened after the recent Nvidia earnings.

It has formed a double-top pattern at 1,106p and a neckline at 1,060p, its lowest level on August 14. Top oscillators like the MACD and the Relative Strength Index (RSI) have pulled back and formed a bearish divergence. 

Therefore, the stock will likely have a pullback, with the next point to watch being at 1,000p. A move above the resistance at 1,106p will invalidate the bearish outlook.

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Leading agricultural consultancy SovEcon has revised upwards its projection for Russian wheat exports during the 2025-26 marketing season. 

The firm now anticipates Russia to ship a robust 43.7 million metric tons (mmt) of wheat, an increase of 0.4 mmt from its previous forecast.

This upward revision underscores Russia’s growing dominance in the global wheat market.

Revised forecast and growth

The new forecast for 2025-26 highlights a significant year-on-year increase in export volumes.

In the preceding 2024-25 season, Russia successfully exported 40.8 mmt of wheat, a figure that already established its position as a major supplier. 

The projected 43.7 mmt for the upcoming season represents a substantial 7.1% growth over the previous year’s performance, indicating strong production capabilities and competitive pricing from Russian suppliers.

The US Department of Agriculture projects Russian wheat exports at 46.0 mmt.

SovEcon scaled up its forecast for wheat exports for the 2025-26 season. However, shipments continue to remain historically low in the first months of the season. 

Factors influencing upward revision

This optimistic revision is primarily attributed to highly favorable crop prospects, suggesting robust growth and a strong harvest.

This positive outlook for exports has outweighed the current low shipment figures, leading to an improved forecast for the season as a whole.

The export forecast has been adjusted upwards after the production estimate rose to 85.4 mmt from 83.6 mmt in July. This compares to 82.6 mmt harvested by Russian farmers a year prior.

Crop prospects in the Urals and Siberia improved, leading to an upward revision, SovEcon said.

The consultancy said:

Despite relatively good crop prospects, we are not ready to raise the estimate more significantly given the sluggish start of the export campaign.

According to SovEcon, cumulative wheat exports for July and August reached 6.1 mmt.

This figure is notably lower than the 9.9 mmt exported during the same period last year and falls short of the five-year average of 8.1 mmt.

September export figures are also expected to be historically low.

Challenges and market dynamics

This season has seen a decrease in Russian wheat purchases by major importers.

Shipments to Egypt totaled 1.1 mmt in July–August, a decrease from 1.5 mmt in the previous year. Similarly, Algeria’s imports fell from 0.5 mmt last year to 0.1 mmt. 

Importers might look to Argentina and Australia for new crops in the coming months, as the outlooks in those regions are getting better, SovEcon said. 

Australia’s farm ministry increased its 2025-26 wheat production forecast in September to 33.8 mmt, a 22% rise over the 10-year average and an increase from June’s estimate of 30.6 mmt.

Market participants anticipate that Argentina’s wheat production will surpass 20 mmt, an increase from 18.6 million metric tons last year.

Meanwhile, despite a sharp drop in energy prices, the ruble has remained relatively stable, hovering around 80 per dollar since early August.

Falling FOB prices are exacerbating the challenges faced by Russian exporters, the consultancy said. In fact, export prices dropped by $7/mt to $233/mt from mid-to-late August alone.

“We expect some growth in exports as domestic wheat prices in ruble terms continue to decline,” Andrey Sizov, managing director at SovEcon said. 

In recent weeks, exporters’ bids have fallen sharply. Against this backdrop, we expect to see further declines in export prices and a gradual recovery in shipments.

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A fragile sense of calm has returned to European markets on Wednesday, with stocks staging a tentative rebound from a brutal sell-off that was driven by deep-seated fears over the region’s fiscal health.

This quiet recovery is being led by a stunning display of defiance from the luxury sector, but the ghosts of yesterday’s bond market rout still linger, casting a long and anxious shadow over the session.

In the opening hour of trade, the pan-European Stoxx 600 was 0.1 percent higher, a modest gain that nonetheless stands in stark contrast to the previous day’s turmoil. Most sectors and all major bourses are posting gains, a sign that the market is, for now, finding its footing.

A watchmaker’s triumph in a tariff storm

The day’s undisputed star is Watches of Switzerland, whose shares have skyrocketed 8.3 percent in early trade.

The surge came after the company issued a confident trading update and received a crucial stock upgrade from Deutsche Bank, a powerful combination that has sent a jolt of optimism through a nervous market.

In a remarkable show of resilience, the company confirmed it was on track to deliver its results in line with expectations, masterfully navigating the crushing US tariffs that have been levied on its products.

“We have seen consistently strong trading throughout the period, particularly in the US despite the announcement of increased tariffs on Swiss imports,” the company said in its trading update.

It added that it did not anticipate a material impact from the tariffs in the first half, as its brand partners had strategically increased inventories ahead of the levies.

This bullish outlook was validated by Deutsche Bank, which upgraded the stock to a “buy.” 

“We believe the downside risk to WOSG earnings driven by US import tariffs is much more contained than the shares are reflecting,” analyst Alison Lygo said in a note.

The lingering ghost of the bond rout

This pocket of corporate strength, however, cannot entirely erase the memory of Tuesday’s turmoil.

The previous session’s sell-off was triggered by a dramatic spike in government bond yields, a clear sign of growing investor anxiety about the fiscal stability of Europe’s major economies.

The UK’s 30-year bond yield surged to its highest level since 1998 as the market braced for a contentious Autumn Budget.

At the same time, France’s 30-year yield hit its highest point since 2009, a direct reaction to a looming no-confidence vote that could topple the government over a fierce budget dispute.

This is not just a European problem.

The sell-off is part of a global phenomenon, exacerbated by a bombshell US court ruling that President Donald Trump’s global trade duties are illegal.

The decision raises the unsettling prospect of the US government having to repay billions in collected duties, putting even more pressure on an already stressed fiscal situation and sending a ripple of fear through the entire global bond market.

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The United States has revoked Taiwan Semiconductor Manufacturing Co.’s authorization to freely ship essential equipment to its main Chinese facility, tightening restrictions on Beijing’s access to advanced chip-making gear.

TSMC said Washington informed it of the decision to remove the “validated end user” (VEU) status for its Nanjing plant effective December 31.

The designation had allowed suppliers to ship semiconductor equipment covered by US export controls without requiring individual licenses.

The step mirrors a similar move taken last week against Samsung Electronics and SK Hynix, whose memory chip plants in China had also benefited from blanket approvals.

The revocation means all three companies will need to secure case-by-case authorizations, complicating operations and upgrades at their Chinese sites.

The decision comes as Washington and Beijing pursue negotiations to pave the way for a meeting later this year between US President Donald Trump and Chinese leader Xi Jinping.

The Trump administration has avoided imposing the harshest export curbs to prevent derailing talks but has signalled a tougher stance on semiconductor technology transfers.

“While we are evaluating the situation and taking appropriate measures, including communicating with the US government, we remain fully committed to ensuring the uninterrupted operation of TSMC Nanjing,” the Taiwanese chipmaker said in a statement.

Move to have limited impact on TSMC’s financials

Analysts said the impact on TSMC’s financials will be limited, given the relatively small size of its Chinese operations.

The Nanjing plant began production in 2018, using technology as advanced as the 16-nanometer process, which debuted more than a decade ago.

The site contributes only around 3% of TSMC’s total capacity and an even smaller share of revenue, as it produces lower-priced chips.

Morningstar senior equity analyst Phelix Lee said the loss of VEU status was “unexpected but should have a negligible effect on earnings and valuation.”

He added that TSMC may divert some equipment originally ordered for Japan to Nanjing before the December deadline to build spare capacity.

TSMC shares fell 3.7% in New York trading on Tuesday following the announcement.

Revocation to weigh more heavily on Samsung, SK Hynix

The revocation could weigh more heavily on Samsung and SK Hynix, whose China-based production represents a much larger share of their output.

“Revoking the “validated end-user” rules, which had allowed Samsung and SK Hynix to ship chip-making equipment to their plants in China without applying for a new license each time, would make them more difficult to expand or upgrade those facilities,” SK Securities analyst Han Dong-hee said in a note.

The South Korean chip makers could also struggle to stay competitive against Chinese rivals in the conventional-chip market as a result, Han added.

Samsung produces around 40% of its NAND memory in China, while SK Hynix relies on its Chinese plants for roughly 40% of its DRAM and 30% of its NAND production.

Korea Investment & Securities analysts Minsook Chae and JT Hwang warned that any disruption at Samsung’s NAND plant in Xi’an or SK Hynix’s DRAM and NAND plants in Wuxi and Dalian could trigger supply shortages and push up memory prices.

“If instability drives prices higher, US cloud-service providers could face significant losses,” they said.

Analysts see bigger implications for China

While the immediate financial consequences for TSMC appear minor, analysts highlighted the broader significance of the move for China’s semiconductor ambitions.

“The bigger story is Washington’s intent—this isn’t about today’s profits, it’s about freezing China’s chip capacity over the long term,” said Charu Chanana, chief investment strategist at Saxo Singapore.

Citi Research analyst Kevin Chen noted that Chinese memory makers may gain a competitive edge if foreign suppliers face curbs in expanding their operations, potentially boosting domestic demand.

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Oil prices plunged 2% on Wednesday after reports claimed that OPEC+ may consider further oil output hikes in the coming months. 

The Organization of the Petroleum Exporting Countries and allies will consider further raising oil production at a meeting on Sunday, according to a Reuters report. 

Should there be an additional increase, OPEC+, responsible for approximately half of the global oil supply, would initiate the reversal of a second phase of output reductions, totaling around 1.65 million barrels per day (equivalent to 1.6% of global demand), more than a year ahead of schedule.

An online meeting of eight OPEC+ countries is scheduled for Sunday to determine October’s output. 

According to the reports, there’s a possibility that OPEC+ might choose to halt output increases for October.

At the time of writing, the price of West Texas Intermediate crude oil was down 2% at $64.21 per barrel.

Brent crude oil on the Intercontinental Exchange was also 2% lower at $67.81 a barrel. 

OPEC+ output cuts

The eight members of the OPEC+ alliance, including kingpin Saudi Arabia and ally Russia, have been raising production of oil since April this year. 

The plan was to reverse the voluntary production cuts of 2.2 million barrels per day from April to September 2026. 

However, the group has been raising output by 411,000 barrels per day every month since May.

Additionally, the group agreed to raise output further by 548,000 barrels a day for each of August and September. 

A prevailing decision stipulates that the remaining restrictions of 3.66 million barrels per day, which include 1.66 million barrels per day on a voluntary basis, are set to continue until the close of 2026.

“We consider it unlikely that this will be changed outside of a regular OPEC+ meeting, especially since there is a risk of a considerable oversupply on the oil market from autumn onwards,” Carsten Fritsch, commodity analyst at Commerzbank AG, said. 

Fears of supply disruptions

Oil prices have climbed sharply over the last few sessions. 

Brent and WTI crude benchmarks both hit a near one-month high on Tuesday due to new US sanctions on several tankers and vessels associated with carrying Iranian oil. 

Fritsch added:

Due to Labor Day, US markets were closed on Monday, which reduces the significance of yesterday’s price movements. 

The market remained on notice as the threat of supply disruptions loomed large with both Russia and Ukraine targeting each other’s energy infrastructures. 

Bloomberg is set to release data today on Russia’s seaborne oil exports. This release is anticipated to shed light on the impact, if any, of last week’s events.

Last week, overall shipments hit a four-week low, with those to India reaching their lowest point in nearly three years.

“It is quite possible that there will be a counter-movement,” Fritsch said. 

India ignores US pressure

India’s government is unwilling to stop purchases of Russian oil despite increasing pressure from Washington. 

India’s energy minister publicly defended the country’s oil purchases, asserting in an Indian daily newspaper that these actions had successfully stabilised the market and averted a potential price surge to $200.

There is still a financial incentive for Indian refineries to buy Russian Urals oil. 

“According to informed sources, this oil is being offered at a discount of USD 3-4 per barrel compared to Brent for cargoes loaded at the end of September and in October,” Fritsch said.

By comparison, Indian refineries recently had to pay a premium of USD 3 over Brent for US oil.

Nayara Energy’s refinery, majority-owned by Russian entities, was added to the EU sanctions list in July.

Consequently, both Saudi Arabia and Iraq have ceased their oil supply to this Indian refinery, according to Commerzbank.

The refinery in question, which processes 400,000 barrels of crude oil daily, represents almost 8% of India’s total processing capacity.

Consequently, it is now anticipated to rely entirely on Russian oil imports.

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The electric vehicle revolution promised unstoppable growth and sky-high profits.

Tesla once led with its futuristic tech and cult-like following. BYD, China’s EV titan, surged past rivals with aggressive expansion and bold pricing. But recent earnings have put question marks over that story.

Profits are slipping, price wars are cutting deep, and even the biggest names are showing cracks. Investors who still see EVs as a guaranteed win need to rethink their positions. Consumers are now beginning to wonder if it’s still worth the hype.

What’s behind Tesla’s faltering appeal?

Tesla’s Full Self-Driving (FSD) software was meant to be a game changer. Instead, it is turning off buyers. A recent survey of over 8,000 US consumers revealed only 14% would be more likely to buy a Tesla because of FSD.

More tellingly, 35% said it made them less likely to buy one. Nearly half want regulators to ban it outright.

This skepticism isn’t just about tech, but more about trust. Tesla’s frequent safety recalls and public controversies surrounding CEO Elon Musk have eroded confidence.

FSD remains unproven at scale and has been linked to accidents.

Many Tesla owners who paid for the software refuse to activate it. The tech, once Tesla’s crown jewel, now feels like a liability. The company’s growth depends heavily on this innovation, but that pillar is shaky.

Tesla’s stock is starting to reflect this sentiment. After a strong start to 2025, shares have dropped 13% this year.

With margins squeezed and brand trust weakening, Tesla faces tougher competition than ever, especially in China where BYD’s rise is eating into its market share.

Why is BYD’s profit tumbling despite rising sales?

BYD reported a nearly 30% plunge in net profit for the second quarter, dropping to 6.36 billion yuan ($890 million). That’s the first quarterly profit decline since early 2022.

Yet, revenues grew 14% year-on-year, reaching 201 billion yuan ($28.1 billion). The disconnect between revenue growth and profit decline reveals a key problem: margins are under severe pressure.

BYD’s gross margin fell from 18.8% last year to 18% in the first half of 2025. While this is still strong compared to rivals like Zhejiang Geely and Chery, the trend is worrying.

The company’s profit was hammered by aggressive price cuts in China, a tactic BYD itself helped spark.

The domestic market’s fierce price war forced BYD to slash prices repeatedly, narrowing its profits.

Adding to the strain, BYD has sped up payments to suppliers to comply with new government regulations. Faster payments squeeze cash flow and working capital, increasing borrowing, which rose from 28.6 billion yuan to 39.1 billion yuan in less than a year.

At the same time, research and development costs climbed over 50% as BYD invests heavily in batteries and driver-assistance tech.

Overseas sales are a bright spot. BYD’s international revenue surged 50% in the first half of 2025. European registrations jumped 225% in July alone. The company is expanding aggressively in Brazil, Australia, and Europe.

But even this overseas growth is not enough to offset the pressure at home.

Is the price war crippling the EV industry’s economics?

The core issue isn’t just BYD or Tesla but the entire EV sector in China. Retail EV prices have dropped roughly 19% over two years. This price war benefits consumers but destroys profits across the board.

Chinese regulators have warned automakers about “rat-race competition,” where constant discounting endangers supply chains and the reputation of Chinese-made vehicles globally.

The government’s crackdown aims to end unsustainable price cuts that are now routine in the industry.

Legacy automakers are reacting. Porsche recently delayed its full EV transition, returning to hybrids and combustion engines. Opel ditched its 2028 EV-only goal.

The message here is that EV companies that are chasing volume at any cost are hitting a wall. Sustainable profits require more than just aggressive pricing. Without it, even market leaders risk collapse.

Who are the real winners and losers in this market shake-up?

Tesla and BYD remain the biggest names, but both are showing cracks.

Tesla struggles with a damaged brand and questionable technology bets. BYD leads in volume but bleeds profits trying to hold its ground in China’s cutthroat market.

Meanwhile, some legacy automakers benefit by avoiding the fray. They lean on hybrids and ICE vehicles for steady cash flow. These brands are not losing EV relevance but are pacing growth more realistically. This strategy may shield investors from the volatility wrecking Tesla and BYD.

Another key opportunity lies overseas. BYD’s aggressive international expansion shows how global markets can buffer domestic weakness. In Brazil, Europe, and Australia, BYD is gaining market share with competitive pricing and increasing brand recognition.

What should investors take from this upheaval?

The electric vehicle story is no longer about guaranteed exponential growth or unbeatable tech hype. It is a story of hard economic realities setting in. Investors must focus on profitability, balance sheets, and business models, not just sales volume or futuristic features.

Tesla’s FSD troubles reveal how fragile brand strength can be. BYD’s profit squeeze shows that even market leaders can’t escape brutal competition. Price wars erode margins for all players, pushing companies to borrow more and cut corners.

The companies best positioned are those that can grow profitably, control costs, and diversify globally.

BYD’s overseas push is a smart move but carries risks in execution and rising costs. Tesla needs to rebuild trust and deliver on its tech promises to justify premium valuations.

For investors, the EV market is no longer a one-way bet. Careful analysis of margins, cash flow, and competitive strategy is essential. The next phase of EV growth will reward discipline, not hype. Profits will matter more than ever.

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