Tesla shares extended gains on Wednesday, rising more than 6% after jumping 10% on Tuesday, as Wall Street focused on the electric carmaker’s better-than-expected quarterly vehicle delivery results. Tesla’s stock is now up more than 70% since its low in late April.
Tesla announced this week that it has produced nearly 411,000 vehicles and Nearly 444,000 delivered Auto sales rose in the second quarter, beating consensus estimates and posting an increase from the first quarter.
Despite the year-over-year decline in deliveries, analysts were optimistic about the report and pointed to signs that the electric vehicle industry may be holding up better than expected.
“We continue to see room for improvement in sentiment in Tesla shares as well as broader sentiment towards electric vehicles compared to the negative sentiment we have seen over the past six months,” Citi analysts wrote in a note following the results on Tuesday.
The company’s deliveries represent a “major turning point” in “Tesla’s rise story,” Dan Ives of Wedbush Securities said in a note.
“The key to Tesla stock is the Street’s realization that Tesla is the most underrated AI play on the market,” Ives wrote, adding “the mojo is back for Musk” as he raised his price target on the stock to $300 from $275 with a new bull case of $400 for 2025.
The company’s Robotaxi event on August 8 “will lay the groundwork for a ‘fully autonomous’ and autonomous future,” Ives added.
Morgan Stanley’s Adam Jonas said Tesla’s results were “the first positive surprise of the year,” noting that the automaker delivered 33,000 more units than it produced in the second quarter.
The analyst also highlighted a “show stealer” from his release — Tesla’s energy storage business, which posted its highest quarterly release rate yet. The business, which includes Huge utility scale packagesThe electric vehicle industry has grown faster than the EV sector, with record profit margins.
“Tesla started its Independence Day celebrations early with positive Q2 deliveries, a 33K unit drop in inventory, and a strong inventory volume to remind investors that it’s not just a car company,” Jonas wrote.
His team gives the stock an “overweight” rating with a $310 price target.
Tesla has faced stiff competition abroad from its Chinese peers and has been grappling with a slowdown in demand for electric vehicles in the United States. In a bid to cut costs, the company embarked on a plan to cut more than 10% of its global workforce earlier this year in what some analysts saw as a sign of tough times ahead.
During Tesla’s shareholder meeting last month, CEO Elon Musk stressed that near-term demand and sales will struggle as the industry goes through a transition.
The company also cut prices last year to stimulate sales.
“The risk of further price cuts remains, there are still other questions about the fundamentals, and we’re still in a bit of a winter in EV demand,” Dan Levy, senior equity research analyst at Barclays, told Yahoo Finance on Tuesday. “So the outcome is good. But I think the underlying macro backdrop is still intact.” Levy has an EqualWeight rating on the stock and a $180 price target.
Ines Ferry is a senior business reporter at Yahoo Finance. You can follow her on X on @ines_ferre.
