Tesla’s (TSLA) stock surged approximately 4% on Tuesday, marking its tenth consecutive day of gains and effectively wiping out all year-to-date losses. Since April’s 52-week lows, the stock has skyrocketed by about 75%, driven largely by robust second-quarter vehicle production and delivery figures that surpassed Wall Street’s expectations. Analysts attribute this bullish momentum to Tesla’s burgeoning artificial intelligence ventures.
Morningstar’s equity strategist Seth Goldstein noted, “The market is suddenly valuing Tesla’s growth potential. First-quarter deliveries fell short, leading the market to anticipate a slower growth trajectory, hence the significant rally we’re witnessing.”
Tesla is slated to announce its quarterly results on July 23 after market close, with investor attention focused on its plans for more affordable electric vehicles. This development is seen as a pivotal catalyst for future growth.
Goldstein cautioned, however, that Tesla must provide a clear and definitive timeline for the rollout of these vehicles, initially projected for 2025. “Investors need assurance that Tesla will kickstart a second wave of delivery growth by 2026,” he emphasized. Any delays or uncertainty in this regard could potentially impact the stock’s performance.
Aside from earnings and deliveries, Tesla’s foray into robotaxis remains another key area of interest. The company plans to unveil its highly anticipated robotaxi on August 8, further fueling investor optimism.
Tesla faced a tumultuous first half of the year, with its stock plunging following a disappointing fourth-quarter financial report and a subsequent 9% year-over-year decline in first-quarter vehicle deliveries. The EV maker’s valuation and U.S. demand were questioned, prompting significant stock volatility.
Competitive pressures from Chinese EV manufacturers such as Lucid (LCID), Li Auto (LI), Nio (NIO), and XPeng (XPEV) added further strain, leading Tesla to engage in aggressive price cuts to maintain market share. Despite challenges, Tesla’s recent rally has dealt a blow to short sellers, transforming it from the market’s top shorted stock to the fourth position.
Ihor Dusaniwsky of S3 Partners remarked, “Short sellers have experienced fluctuations with Tesla over the past few years. It was once the most shorted stock, but now ranks behind Nvidia, Apple, and Microsoft. Nevertheless, it remains a prominent name among short sellers.”
Related topics:
Asian Stocks Decline Amid Trade Concerns and Rate Hike Speculations
Global Markets Recap: Stocks Mixed Ahead of UK Election Results
Tesla Stock Surges Over 10% Following Strong Q2 Vehicle Deliveries