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Investing.com — Here is your weekly Pro Recap on the biggest headlines out of tech this week: Tesla is slashed again after record rally, but picks up more momentum for its Supercharger network; FTC sues Amazon for allegedly deceptive consumer-facing practices; PayPal scores big loan deal with KKR; and MongoDB is riding high after solid investor day.
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Tesla’s Superchargers solidify dominance, even as shares are downgraded again
Rivian (NASDAQ:) said on Tuesday that it will adopt Tesla’s (NASDAQ:) charging standard, meaning owners of its electric vehicles will gain access to the already-dominant Supercharger network.
That access should open up as early as spring of next year, and Rivian also said it will standardize a Tesla-style charging port on its EVs as of 2025.
The announcement looks to add momentum to Tesla’s push to make Superchargers the standard for EVs in the U.S. and Canada following other recent agreements with General Motors (NYSE:) and Ford (NYSE:).
Still, later in the week Morgan Stanley downgraded Tesla shares to Equal Weight from Overweight after their massive recent rally pushed Tesla’s valuation to what the firm considers “fair” levels.
The analyst has been a vocal Tesla bull in recent years, but is now stepping to the sidelines, saying in a note to clients:
I have to be up-front with you all. While the team has defended the Tesla [Overweight] rating all year, I did not see this 111% YTD rally coming (the S&P 500 is up 14% YTD, for context). We think it’s understandable and are sympathetic to the changes in the market narrative around the name.
With the downgrade call mostly based on the valuation, the firm added that Tesla remains “a ‘must own’ company in any EV portfolio,” emphasizing that it also benefits from the ongoing AI frenzy on Wall Street. It added:
We see continued evidence that Tesla is emerging as an industrial ‘standard bearer’ for one of the greatest industrial changes we’ve witnessed in over a century – the electric transport and renewable energy economy.
The analyst also raised the price target to $250 per share from the prior $200, with the new target suggesting a modest downside to Tesla’s Friday close of $256.60 – down 3% for the week. This is the third downgrade for Tesla stock this month after Barclays and CFRA analysts also lowered the shares to neutral ratings.
FTC sues Amazon for violating consumer protection laws
The Federal Trade Commission on Wednesday sued Amazon (NASDAQ: NASDAQ:) in Washington state federal court for violating consumer protection laws. The lawsuit alleges Amazon’s website knowingly “duped” millions of consumers into enrolling in Prime and then made it difficult for them to cancel.
Prime is Amazon’s paid subscription service that includes faster delivery and access to video streaming, songs and other features. The service costs $139 per year.
Amazon used manipulative, coercive, or deceptive user-interface designs known as “dark patterns” to trick consumers into enrolling in automatically renewing Prime subscriptions, the FTC said. It then knowingly complicated the cancellation process for Prime subscribers who sought to end their membership.
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” said FTC Chair Lina M. Khan. “These manipulative tactics harm consumers and law-abiding businesses alike. The FTC will continue to vigorously protect Americans from ‘dark patterns’ and other unfair or deceptive practices in digital markets.”
BofA reiterated a Buy rating on Amazon as they believe the lawsuit was expected, adding that Amazon’s stock reaction to the announcement shows the Street isn’t too worried. They noted:
In our view, the lawsuit potentially signals that the FTC does not have something potentially more impactful to pursue, such as pricing policies, 3P fees or 1P product competition.
Shares were up 1.25% for the week.
PayPal climbs on $3.3B loan deal with KKR
Shares of PayPal (NASDAQ:) climbed Tuesday after it announced a pact to sell $3.3 billion of buy now, pay later (BNPL) loans in Europe to private equity firm KKR (NYSE:). KKR also agreed to purchase future loans, with a total deal value of about $43.6B.
BNPL is an increasingly popular method of payment that allows customers to pay the cost of a purchase over time.
“Our collaboration with KKR will allow us to accelerate our PayPal Pay Later originations alongside market demand in Europe while preserving free cash flow for other strategic initiatives,” said PayPal’s acting CFO Gabrielle Rabinovitch.
PayPal will allocate approximately $1B to incremental share repurchases in 2023 after the deal closes, increasing the total amount from $4B to $5B.
Keefe, Bruyette & Woods said the news should be “a headline positive.”
Shares of PayPal climbed 3% following the announcement, and are up 1.5% for the week. Year to date, the stock is down some 10%, lagging broader markets.
Analysts boost MongoDB targets after positive Investor Day
Wall Street analysts have weighed in positively on MongoDB’s (NASDAQ:) investor event that took place Thursday in New York.
Analysts at Mizuho and Stifel, among others, hiked the price target on the stock after the company unexpectedly announced a new Stream Processing offering.
“We view this as an intriguing new opportunity for the co., although it is clearly very early and remains to be seen whether MDB can meaningfully broaden its value proposition beyond databases,” wrote Mizuho, which hiked the price target to $240 per share on the Neutral-rated stock.
Stifel is more bullish, reiterating a Buy rating on the stock and raising the target to $420 per share.
“New announcements were very well-received by the customers and partners we spoke with during the day. Overall, with the pace of new product introductions accelerating Mongo continues to solidify its leadership position among developer data platforms,” it said in a client note.
MongoDB shares closed over 4% higher Thursday, and were up fractionally for the week.
Senad Karaahmetovic contributed to this report.
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