Tesla’s stock is on the rise.
Shares of the electric vehicle maker, up 10% this month through Thursday’s close—and up another 6% so far today—are on a roll. Though it’s been bumpy, Tesla (TSLA) stock has climbed off year-to-date lows around $222, seen in March, and is approaching break-even. (The stock, which finished last year near $404, was recently around $392.)
The recovery is notable for a stock that, as of the end of the first half of the year, was the laggard of the Magnificent 7. It was one of only two companies in the big-tech grouping in the red, Apple (AAPL) being the other, also tailing all three major U.S. indexes. (The Roundhill ETF that tracks the Magnificent 7 group, known as “MAGS,” is up about 14% this year.)
The stock has likely been boosted by factors that have lifted stocks broadly. Investors widely expect the Federal Reserve to cut rates next week, a move generally seen as beneficial to big tech companies. Strong second-quarter earnings growth has offered a measure of optimism to investors attempting to gauge the strength of the economy. (Though there’s plenty of concern on that score, too.)
But Tesla-specific factors also seem to be lifting the shares. Despite wariness about the health of the company’s EV business, some investors appear willing to pay up for the possibility of a big opportunity in robotics, as well as for signs of progress in autonomous driving at both Tesla and more widely. A costly public feud between CEO Elon Musk and President Donald Trump, while not extending valuable EV credits, has apparently cooled.
And Tesla’s board has offered CEO Elon Musk a pay package that could remove a “Will he stick around?” overhang from the company’s outlook—albeit at a high price. (Further enthusiasm for the stock may be attributed to what some see as potential for a “short squeeze” in which investors who traded against the shares have to buy it as it rises to cover short bets.)
Wall Street analysts don’t appear ready to climb aboard en masse. Visible Alpha tracks about as many combined bearish and neutral ratings as bull calls, while its mean price target around $327 is substantially below current levels. Investors are, nevertheless, driving ahead.
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