Tesla’s stock (TSLA) increased 2% on Friday, wiping out its losses for the year and continuing its winning run for an eighth straight session.
The stock has completed an incredibly rapid turnaround, rising 37% over the last eight sessions and 43% in the last month to put it in positive territory for 2024. By mid-April, the stock had dropped as much as 40% for the year.
More modestly, the S&P 500 has increased by 4% during the past month.Tesla’s prolonged upswing coincides with the automaker’s earlier this week beat on quarterly deliveries.
Tesla supporters have also emphasized the company’s fastest-growing business division, which is its energy storage business, in addition to these production and delivery statistics.
“To remind investors it’s not just an auto company, Tesla started its Independence Day celebration early with a positive 2Q delivery beat, 33k lower inventory, and a large storage beat,” said Morgan Stanley’s Adam Jonas in a recent note.
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The release on Thursday of China’s provincial government procurement list, which featured locally produced Tesla vehicles, was another encouraging development.
According to Reuters, Tesla’s Model Y car was listed in the Jiangsu province’s catalog, which permits government employees to buy it as a service vehicle.
In addition to fierce competition from Chinese automakers overseas, Tesla has seen a decline in US demand for EVs. Earlier this year, the corporation announced plans to decrease almost 10% of its global workforce in an attempt to save expenses. This move was interpreted by some analysts as a foreshadowing of difficult times to come.
In an effort to boost sales last year, the business also cut pricing.
Elon Musk, the CEO of Tesla, acknowledged last month at the company’s shareholder meeting that the industry is going through a transitional phase and that short-term demand and sales will continue be challenging.
“We are still facing somewhat of an EV winter on demand, and there is still a risk of further price cuts ahead,” senior equities research analyst Dan Levy of Barclays told Yahoo Finance earlier this week. “There are also questions on fundamentals.” “So, successful outcome. However, I believe that the underlying macro background remains unchanged.” Levy has a $180 price target and an Equal Weight rating on the stock.
Following the closure of the market on July 23, Tesla will release its quarterly earnings. Analysts are also anticipating the company’s much-awaited robotaxi unveiling on August 8.
Wedbush managing director Dan Ives boosted his price target on the stock to $300 from $275 with a new bull case of $400 for 2025. “The key for Tesla’s stock is the Street recognizing that Tesla is the most undervalued AI play in the market,” Ives wrote in a note this week.
The company’s Aug. 8 robotaxi event, according to Ives, “will lay the yellow brick road to [full self-driving] and an autonomous future.”