Tesla shares (TSLA) rose about 4% on Tuesday, marking their 10th consecutive day of gains.
The strong performance means Tesla has erased all of its losses so far this year, and shares are up about 5% so far this year. The stock is up about 75% since hitting a 52-week low in April.
Analysts are praising the company’s second-quarter vehicle production and delivery numbers, which beat Wall Street expectations, as well as momentum surrounding Tesla’s artificial intelligence business.
“Suddenly, the market is pricing Tesla’s growth potential,” Morningstar equity strategist Seth Goldstein told Yahoo Finance. “First-quarter deliveries came in below expectations, so the market was assuming lower growth, which is why we saw such a big rally.”
Tesla is scheduled to report its next quarterly earnings after the market closes on July 23. The company has hinted at the development of more affordable electric vehicles, which investors see as another key catalyst for growth.
But Goldstein said the company needs to provide a “firm, concrete timeline” for the launch of these cars, although he has previously said they could come as early as 2025.
“We need to see soon that target is met or even accelerated. [Wall Street] “You can assume that Tesla will see a second wave of delivery growth starting in 2026,” he said. “As long as that outlook holds, I think the stock will be OK. But if that gets delayed or management sees more uncertainty about whether that’s going to happen, I think the stock could fall.”
Beyond revenue and deliveries, investors are also keeping an eye on another growth opportunity: robotaxis, which the company plans to unveil on August 8.
Tesla shares plummeted earlier this year after its fourth-quarter financial report missed expectations on both sales and profits. A 9% drop in first-quarter vehicle deliveries compared to the same period a year ago sent the stock sliding further as investors questioned the electric-vehicle maker’s lofty valuation and remaining demand in the U.S.
The company cut more than 10% of its workforce in the wake of the delivery delays, in what analysts at the time labelled as an “ominous sign” for things to come.
Competition overseas from Chinese EV makers such as Lucid (LCID), Li Auto (LI), Nio (NIO), and XPEV (XPEV) has also been a major burden, intensifying price wars and forcing Tesla to aggressively cut prices to compete.
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As a result, short sellers flocked to the stock, but the recent rally in the stock price has killed off those sales.
“Short sellers on this stock have been up and down for the past few years. This stock was the No. 1 shorted stock on the market. Now it’s No. 4 behind Nvidia, Apple and Microsoft,” Igor Dusaniwski of S3 Partners told Yahoo Finance on Tuesday. “But this is kind of the OG short selling, and everyone is still shorting it.”
Tesla and SpaceX CEO Elon Musk listens to questions while speaking at the SATELLITE Conference and Expo in Washington, March 9, 2020. (Associated Press Photo/Susan Walsh, File) (The Associated Press)
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her at Yahoo Finance. translatorvisit me on LinkedIn or email me at alexandra.canal@yahoofinance.com.
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