Tesla’s stock (TSLA) closed up about 4% on Tuesday, securing its tenth straight day of gains. The positive momentum has erased all of the year-to-date losses for the electric vehicle maker, with shares up about 5% since the start of the year. Additionally, the stock has surged about 75% since hitting 52-week lows in April.
Analysts have attributed the recent gains to Tesla’s strong second quarter vehicle production and deliveries numbers, which exceeded Wall Street expectations. The company’s artificial intelligence businesses have also been a driving force behind the stock’s rise.
Seth Goldstein, equity strategist at Morningstar, noted that the market is now valuing Tesla’s growth potential more highly. He explained, “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.”
Investors are eagerly awaiting Tesla’s next quarterly results, set to be reported on July 23. The company has teased the development of more affordable electric vehicles, which is seen as a key catalyst for future growth. However, Goldstein emphasized the importance of Tesla providing a clear timeline for the rollout of these cars to maintain investor confidence.
In addition to earnings and deliveries, investors are also anticipating the unveiling of Tesla’s robotaxi on August 8. The company’s stock had struggled in the first half of the year following a disappointing fourth quarter financial report and a drop in first quarter vehicle deliveries. Competition from Chinese EV makers and concerns about Tesla’s valuation and demand in the US also weighed on the stock.
Despite facing challenges earlier in the year, Tesla’s recent rally has crushed short sellers who had bet against the company. S3 Partners’ Ihor Dusaniwsky noted that Tesla was previously the top shorted stock in the market but has now dropped to the fourth position.
Overall, Tesla’s stock has rebounded strongly in recent weeks, driven by positive developments in its business operations and investor optimism about its future growth prospects.
