(Bloomberg) – Shares of Tesla Inc. jumped to a seven-month high on Wednesday, buoyed by investors’ insatiable appetite for mega-cap tech stocks and a slew of breaking positive news.
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The electric vehicle maker’s stock closed up 1.5% in New York at $224.57, marking its ninth straight day of gains and its longest winning streak since January 2021. Tesla shares are down this year despite Some recent declines are up 82% as they rebound from last day’s 65% plunge of the year.
The strong rebound has been fueled by a rush towards technology and growth stocks in recent days, while fears of a recession have receded.
“Some of these moves at Tesla are entirely justified given that we’ve been through a downturn that was comparable to the dot-com bubble. As such, there’s still upside potential for many tech stocks based solely on how hard they’ve been hit,” says Ivana Delevska. said Chief Investment Officer at SPEAR Invest in an interview.
On Tuesday, all Tesla Model 3 sedans became eligible for the full US tax credit, according to new US Treasury Department criteria. The new qualification may help allay growing concerns that demand for the company’s cars and electric vehicles overall is slowing.
After staging a strong rally earlier in the year, Tesla stock has found itself in troubled waters over the past few months. The company’s decision to aggressively cut prices to counter falling demand fueled further fears that margins could be squeezed.
Meanwhile, a new CEO at social media platform Twitter may also help reassure investors worried that Tesla CEO Elon Musk was too spread out in his many high-profile ventures.
While investor enthusiasm for all things artificial intelligence has buoyed stocks, some warn that trading Tesla as an AI move may not end well for investors.
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Last week, Morgan Stanley said that despite the hype, the company remains an auto company and that the stock’s direction over the next 12 months will be determined by supply and demand for electric cars.
“I would like to caution investors investing in Tesla for AI as the jury has yet to comment on Tesla’s positioning,” Delevska said, echoing the skepticism. “We believe that generative AI will destroy Tesla’s first-mover advantage in autonomous driving.”
(Updates stock movement in first and second paragraphs, updates chart.)
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