Tesla stock (NASDAQ: TSLA) closed up about 4% on Tuesday, marking its tenth consecutive day of gains. This upward trend has allowed Tesla to recover its year-to-date losses, with the stock now up about 5% since the beginning of the year. Since hitting 52-week lows in April, Tesla shares are now up by an impressive 75%.
Analysts attribute this rally to Tesla’s second-quarter vehicle production and delivery figures, which beat Wall Street’s expectations. Additionally, the momentum surrounding Tesla’s ventures into artificial intelligence has further bolstered investor confidence.
In an interview with Yahoo Finance, Seth Goldstein, an equity strategist at Morningstar, noted the market’s renewed appreciation for Tesla’s growth potential. He explained,
“All of a sudden, the market is valuing the growth potential for Tesla. Q1 deliveries surprised to the downside so the market was assuming a lower growth rate, and that’s why we’ve seen the large rally.”
Upcoming Quarterly Results and Future Prospects
Tesla will report its next quarterly results on July 23 after the market closes. The EV giant has hinted at developing more affordable electric vehicles, which investors view as a crucial growth catalyst. However, Goldstein emphasized the need for a “solid, concrete timeline” for the rollout of these vehicles, which could happen as soon as 2025. He stated,
“We need to see that being met or pushed up earlier so that [Wall Street] can assume Tesla will see a second wave of deliveries growth starting in 2026.”
He also noted that any uncertainty or delays in this timeline could negatively impact the stock’s performance. Goldstein added,
“As long as that narrative remains intact, I think that the stock will be OK. But if that’s pushed out or if management sounds more uncertain that that’s going to happen, then I think we could see the stock falter.”
Beyond earnings and vehicle deliveries, investors are also eyeing another significant growth opportunity: robotaxis. Tesla plans to unveil its highly anticipated robotaxi on August 8.
Past Challenges and Market Reaction
Earlier this year, Tesla stock (NASDAQ: TSLA) plummeted after its fourth-quarter financial report missed expectations on both the top and bottom lines. A 9% year-over-year drop in first-quarter vehicle deliveries further dragged shares down as investors questioned the sky-high valuation of the EV maker and demand within the US.
Following the delivery miss, Tesla reduced its workforce by more than 10%. At the time, analysts described the layoffs as an “ominous signal” for future growth prospects.
Competition from Chinese EV makers, including Lucid (LCID), Li Auto (LI), Nio (NIO), and XPeng (XPEV), has also posed a significant challenge, fueling a price war that forced Tesla to cut prices aggressively to stay competitive.
The initial negative sentiment towards Tesla attracted many short sellers. However, these short sellers have faced significant losses due to the recent rally in TSLA stock.
Ihor Dusaniwsky of S3 Partners told Yahoo Finance,
“Short sellers have been up and down in this name over the past couple of years. It was the No. 1 short in the market. Now it’s No. 4 behind … Nvidia, Apple, and Microsoft. But this is like the OG short. Everyone is still in it.”
Tesla Stock (NASDAQ: TSLA) Price Action
TSLA stock jumped 3.71% on Tuesday, closing at $262.33, marking a 25% increase for the week. The trading volume was 160,742,512 shares, significantly higher than the average daily volume of 93.25 million.
