Tesla founder Elon Musk recoups all year-to-date losses

EleonJuly 5, 2024

4 2 minutes read

Tesla founder Elon Musk recoups all year-to-date losses

Insurance is back at Tesla.

A few months ago, Elon Musk’s company was the butt of Wall Street jokes, a growth stock with no growth, according to Wells Fargo. Pundits began to wonder why anyone would still include it in the top seven best-performing stocks after Tesla lagged the other 499 stocks in the S&P benchmark index, including scandal-plagued Boeing.

That’s no longer the case. Just in time for the start of the second half of the year, Tesla has fully recovered its year-to-date losses after adding a staggering $150 billion to its market cap in just three days this week.

$TSLA investors right now pic.twitter.com/yqa3efRxkc
— Teslaconomics (@Teslaconomics) July 3, 2024

“The worst is behind us for Tesla as we believe demand for electric vehicles is starting to shift back toward the disruptive technology pillar,” Wedbush Securities technology analyst Dan Ives wrote Wednesday, raising his price target to $300 from $275 and reaffirming his “outperform” rating.

Musk is now back to his old, brash self, trading one fantastical growth target that defies human reason for another while warning any short seller who gets in his way will be “wiped out” — Bill Gates included.

After consolidating around $180 for the better part of two months, bulls see room for further upside after the stock broke above the 200-day moving average under heavy trading volume and now appears likely to end the three-year downtrend.

You’re here $TSLA It’s done! The 2.5 year downtrend is finally broken 🥳🍾🫂 pic.twitter.com/9kEQejJoNb
— Barchart (@Barchart) July 3, 2024

When a popular pro-Tesla account reminded the fan community late last month of ARK Invest’s Cathie Wood’s 2019 comment about chart technicals that “the longer the base, the bigger the breakout,” Musk quickly responded, “That’s true.”

Second-quarter deliveries exceed reduced expectations

This conviction that the stock has bottomed out and is poised to continue its rally in the coming months is reflected in some of the fundamentals that are currently emerging.

Tuesday’s announcement of second-quarter vehicle deliveries contrasts sharply with first-quarter figures, which far exceeded even the most pessimistic forecasts. After expectations had been steadily falling in recent weeks, Tesla finally managed to draw a line under the issue by beating consensus with a relatively modest decline in car sales.

Tesla’s second-quarter sales beat estimates.
About these estimates… https://t.co/N2EGBHVbXl via @notice $TSLA pic.twitter.com/9TmW6xCpf6
— Liam Denning (@liamdenning) July 2, 2024

Massive growth in its lucrative energy storage business also helped support the argument that it’s not just an electric vehicle company, as deployment volumes more than doubled from the previous quarterly record.

Until recently, many analysts and investors argued that downward revisions to earnings estimates needed to stop before sentiment could improve sustainably.

After Tuesday’s delivery surprise, optimists like Ives, who described first-quarter volumes as a “nightmare” and an “absolute disaster,” now believe the company has renewed market confidence in its growth story.

“This is a strong comeback for Tesla and Musk in the second quarter, as Wall Street expected a clear miss this quarter as demand for electric vehicles remains volatile globally, but Tesla delivered strong numbers at a key time for investors,” he continued.

With sky-high interest rates set to ease by the end of the year, the CyberCab robotaxi set to be unveiled on August 8, and a new entry-level Tesla set to debut in six months, the stock could be poised for further gains. It could even reclaim its place in the Magnificent Seven pantheon.