Tesla (TSLA) stock closed up about 4% on Tuesday, posting gains for the 10th straight day.
The positive moves mean Tesla has erased all of its losses since the start of the year, with the stock up about 5% year-to-date. Shares are up about 75% since hitting a 52-week low in April.
Analysts have attributed the company’s success to Second Quarter Vehicle production and delivery numbers, which beat Wall Street expectations, along with momentum surrounding Tesla’s artificial intelligence business.
“All of a sudden, the market started pricing in Tesla’s growth potential,” Seth Goldstein, an equity strategist at Morningstar, told Yahoo Finance. “First-quarter deliveries surprised the market down, so the market assumed a lower growth rate, which is why we saw this big rally.”
Tesla is scheduled to report its next quarterly results on July 23 after the market closes. The company has announced plans to develop more affordable electric vehicles, which investors see as another major driver of growth.
But Goldstein said the company will have to set a “strong, concrete timeline” when it comes to rolling out those cars, which the company has previously said could happen as soon as 2025.
“We need to see that happen or get pushed higher early enough for (Wall Street) to assume that Tesla will see a second wave of delivery growth starting in 2026,” he said. “As long as that narrative remains intact, I think the stock will be fine. But if that is delayed or if management seems more skeptical about that happening, I think we could see the stock falter.”
Beyond profits and deliveries, investors will also be looking at another growth opportunity: robotaxi. The company is set to unveil its long-awaited robotaxi on August 8.
Tesla shares fell in the first half of the year after its fourth-quarter financial report fell short of expectations. A 9% year-over-year decline in vehicle deliveries in the first quarter dragged the company’s shares down further as investors questioned the electric car maker’s sky-high valuation and the demand that remains in the United States.
Shortly after the failed delivery, the company laid off more than 10% of its staff. At the time, analysts described the layoffs as an “ominous sign” of what was to come.
Overseas competition from Chinese EV makers including Lucid (LCID), Li Auto (LI), Nio (NIO), and XPeng (XPEV) has also been a major drag, fueling a price war that has forced Tesla to cut prices dramatically in order to compete.
Short sellers piled into the name as a result – but have now been crushed by the recent rally.
“The shorting of this name has been oscillating over the past couple of years,” Ihor Dusaniwski of S3 Partners told Yahoo Finance on Tuesday. “It used to be the number one name in the market. Now it’s number four after… Nvidia, Apple, Microsoft. But this is like the original shorting. Everyone is still in it.”
Alexandra Channel She is a senior reporter at Yahoo Finance. You can follow her on X @Ali_Canal, LinkedIn, You can email her at alexandra.canal@yahoofinance.com.
Click here for the latest stock market news and in-depth analysis, including events that move stocks.
Read the latest financial and business news from Yahoo Finance.
