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AI Potential and Delivery Data Fuel Tesla to 9-Day Rally

 
  • user  Sam.Bernstein
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    Sam.Bernstein  Sam.Bernstein
     
      
     
     
     

    Sam Bernstein is a financial analyst with a knack for navigating the bustling streets of Wall Street. With a career spanning over two decades, Sam has earned a reputation as a financial guru, helping both institutional and individual investors make sound decisions in the world's most dynamic financial hub.

     
 
 
 

stocks on the run

 
 
 

Key Highlights:

 
•  
Tesla stock on track for 9th consecutive day of gains
 
•  
Recent delivery data and Musk's compensation package approval boosted investor confidence
 
•  
AI capabilities expected to be crucial for continued stock growth
 
•  
Upcoming Robotaxis event on August 8 could showcase Tesla's AI advancements
 

Tesla Resilient Rebound

 

Tesla stock has demonstrated remarkable resilience, poised for its ninth consecutive day of gains. This impressive rally comes after a period of underperformance compared to other tech giants in 2024. The recent surge has been primarily driven by better-than-expected delivery data and the approval of CEO Elon Musk's compensation package, which alleviated investor concerns.

 

In the second quarter, Tesla reported vehicle sales of 444,000 units. While this represents a 4.8% year-over-year decline, it significantly outperformed the company's most pessimistic forecasts, which had projected declines of over 15%. This data has rekindled investor optimism about Tesla's growth prospects for 2025, despite expectations of flat deliveries (around 1.8 million vehicles) for 2024.

 

The better-than-anticipated delivery figures have helped stabilize profit forecasts. Although Wall Street's earnings expectations for Tesla have been revised downward since the beginning of the year (from $3.8 to $2.4 per share), the company's recent performance suggests that the worst may be over. For investors, this stabilization is a positive sign, as it indicates that estimates are becoming "less bad" – a factor that often precedes a turnaround.

 

The Next Growth Driver

 

While Tesla recent stock performance has been primarily driven by its core automotive business, many analysts believe that artificial intelligence (AI) could be the key to sustaining the company's growth trajectory. Dan Ives of Wedbush has suggested that Tesla's AI initiatives could potentially add a trillion dollars to its current $800 billion market value.

 

Tesla is leveraging AI in two key areas: Enhancing autonomous driving capabilities and developing "labor-saving" robots for future commercialization

 

Upcoming Robotaxis Event: A Potential Catalyst

 

Investors and analysts are eagerly anticipating Tesla Robotaxis event on August 8. This showcase is expected to highlight the company's progress in self-driving technology and could potentially unveil new AI-driven innovations. A strong showing at this event could provide additional momentum to Tesla's stock.

 

For investors considering Tesla, it's important to note the stock's historical volatility. The wide range of analyst price targets (spanning approximately $200, or 80% of the current stock price) reflects the divergent views on the company's future. This volatility can present both opportunities and risks for investors.

 

The potential of Tesla AI initiatives, particularly in autonomous driving and robotics, could be a significant long-term growth driver. However, investors should also consider the competitive landscape in the EV market and the broader economic factors affecting the automotive industry.

 

As Tesla continues to navigate the challenges of scaling production and advancing its technology, investors should closely monitor delivery data, profit margins, and progress in AI development. The upcoming Robotaxis event could provide valuable insights into the company's technological advancements and future direction, potentially influencing investment decisions.

 

Conclusion

 

While Tesla recent stock performance has been encouraging, investors should carefully weigh the company's growth potential against the inherent risks and volatility associated with this innovative but sometimes unpredictable stock.

 
 

TSLA Stock Analysis

 
Last Price
Change
 
248.33
+3.03%

 

Total Score

 
score
3.26
 
StocksRunner Raring Score
Strong Sell
Hold
Strong Buy
 
 
 

Strengths

 

Rewards

 Earnings are forecast to grow

Rewards

 Trading below its fair value

Rewards

 Outperform the market

Rewards

 Analysts raised price target

 

Risk Analysis

 

Risk Analysis

 Downgraded on weak valued

Risk Analysis

 Investors losing their confidence

Risk Analysis

 Possible liquidity concerns

 
 

Risk Level

 
Risk Level
LOW
HIGH
 

TSLA has Medium Risk Level. Click here to check what is your level of risk

 

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Please note that the article should not be considered as investment advice or marketing, and it does not take into account the personal data and requirements of any individual. It is not a substitute for the reader's own judgment, and it should not be considered as advice or recommendation for buying or selling any securities or financial products.

 
 
 
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