Xpeng's Electric Surge: Did I Miss the Boat or Is This the Next Microsoft?

Earnings That Made Me Raise My Eyebrows (and Consider a New Car)

Alright folks Bill Gates here and I've been looking at Xpeng's latest earnings report. Let me tell you it's got me thinking. Remember when everyone thought Microsoft was just a fad? Well Xpeng just reported a 141.5% year over year revenue increase hitting $2.18 billion. Color me impressed! They were expected to bring in 15.1 billion yuan but they blew past that expectation with 15.81 billion Chinese yuan. It's enough to make a guy who once said '640K ought to be enough for anybody' rethink his whole philosophy on growth. Okay I never said that it was a misquote that still haunts me to this day! The point is sometimes you have to admit when a company is doing things right and Xpeng seems to be in that category.

Losing Less Money: A Novel Concept!

Now let's talk about losses. Nobody likes them not even billionaires. Xpeng managed to cut their net loss to 660 million yuan. That's still a loss sure but it's way better than the 1.4 billion yuan loss they were expected to report. And significantly lower than the 1.37 billion yuan loss last year. Think of it this way: it's like finding a twenty dollar bill in your old winter coat – a pleasant surprise even if you're already loaded. I remember when I saw the first version of Windows running and thought 'This is going to be huge but it's going to cost us a fortune upfront!' Xpeng is going through that phase and it looks like they're managing it well. I wish I had a fraction of their risk appetite for my investments when I was younger!

Second Quarter Projections: Optimism or Just Really Good Math?

Xpeng isn't just resting on its laurels. They're projecting second quarter revenue between 17.5 billion yuan and 18.7 billion yuan. That's ambitious! But hey I've always said 'Success is a lousy teacher. It seduces smart people into thinking they can't lose.' So I'm keeping a close watch on whether they can deliver. And their projections for delivering 102,000 to 108,000 electric cars is a 237.7% to 257.5% year over year increase. I hope they are conservative with their estimates especially in the current market.

From Rocky Roads to Electric Highways

Let's not forget that Xpeng had a tough 2023. Slowing growth mounting losses and fierce competition in China's EV market made things challenging. It reminds me of the early days of the PC when everyone and their dog was trying to build one. But Xpeng didn't give up. They launched new products refreshed their flagship X9 and started turning things around. Perseverance is key folks. As I like to say 'Your most unhappy customers are your greatest source of learning.' Xpeng seems to have taken that to heart.

Stock's Up But Still a Ways to Go (Just Like My Golf Game)

All this good news has fueled a 66% year to date rally in Xpeng's share price. It's finally above that initial $15 IPO price from 2020. Baby steps people! But it's still a long way from the $50+ peak in 2021. It's like my golf game I've made improvements but I'm still not ready for the PGA Tour. The main issue I had with their cars was that their software was pretty bad and I am a stickler for good software. I'm sure they can improve on it though.

The Road Ahead: More Competition Than a Tech Conference

Xpeng is facing a swarm of competitors from new entrants like Xiaomi to established players like BYD. The EV market is getting crowded. It's like the internet in the mid 90s – everyone wants a piece of the pie. But Xpeng is maintaining momentum delivering over 30,000 vehicles for six consecutive months. That's impressive. They're proving that they're not just a flash in the pan. But let's face it staying ahead in this game will require constant innovation and a bit of luck. I hope Xpeng is ready for the challenge. If they are I might just have to trade in my Porsche.