Tesla’s boldness is back.
A few months ago, Elon Musk’s company was the butt of every Wall Street joke, a growth stock that, as Wells Fargo put it, wasn’t growing. Pundits began to wonder why anyone still included it among the “magnificent seven” companies after Tesla ranked behind all 499 other stocks in the benchmark S&P 500 index — even scandal-ridden Boeing.
Not anymore. Just in time for the second half of the year, Tesla has fully recovered its year-to-date losses after adding $150 billion to its market value in just three days this week.
Tesla Investors Now pic.twitter.com/yqa3efRxkc
— Teslaconomics (@Teslaconomics) July 3, 2024
“The worst is in Tesla’s rearview mirror as we believe the electric vehicle demand story is starting to turn back on the troublesome tech company,” Wedbush Securities tech analyst Dan Ives wrote on Wednesday, raising his price target to $300 from $275 and reiterating his “outperform” rating.
Musk is now back to his old, reckless self, replacing one fantastic growth goal that defies human reason with another. last While he warned that any short seller who stood in his way would be “annihilated” — including Bill Gates.
After holding around the $180 level for the better part of two months, bulls see more room for gains after the stock breaks above 200 day moving average With heavy trading volume, it now looks like it may break the three-year downtrend.
Tesla Tesla I did it! The 2.5 year downtrend is finally broken 🥳🍾🫂 pic.twitter.com/9kEQejJoNb
— Barchart (@Barchart) July 3, 2024
When a popular pro-Tesla account reminded the fan community late last month of ARK Invest’s Katie Wood’s 2019 quote regarding charting techniques that “the longer the base, the bigger the breakout,” Musk was quick to respond. He answered: “TRUE.”
Second-quarter deliveries beat lowered expectations
The belief that the stock has bottomed out and is poised to continue rising in the coming months is reflected in some fundamentals that are now emerging.
For example, Tuesday’s announcement of second-quarter vehicle deliveries was a stark contrast to first-quarter numbers that badly missed even the most pessimistic expectations. After forecasts were consistently lowered in recent weeks, Tesla finally managed to put a stop to the problem by beating consensus with a relatively small decline in vehicle sales.
Tesla’s Q2 sales beat expectations
About those estimates… https://t.co/N2EGBHVbXl via @opinion Tesla pic.twitter.com/9TmW6xCpf6— Liam Denning (@liamdenning) July 2, 2024
The massive growth in its profitable energy storage business also helped support the argument that it is not just an electric vehicle company, with deployment volume more than doubling from the previous quarterly record.
Until recently, many analysts and investors were claiming that they needed to see an end to the downward revision in earnings estimates before sentiment could improve sustainably.
After Tuesday’s delivery surprise, optimists like Ives — who called first-quarter volumes a “nightmare” and an “unmitigated disaster” — now believe the company has renewed market confidence in its growth story.
“This was a strong performance from Tesla and Musk in the second quarter, with the street expecting a clear failure in the quarter as demand for electric vehicles continues to fluctuate globally, yet Tesla delivered strong numbers at an important time for investors,” he added.
With painfully high interest rates expected to ease later this year, the CyberCab robotaxi set to be unveiled on August 8, and Tesla’s new car set to launch six months from now, the stock could be poised for more gains. And it could even reclaim its place among the great seven.
It’s finally our turn Tesla pic.twitter.com/XMhF3JbZ1V
— TheSonOfWalkley (@TheSonOfWalkley) July 3, 2024