Tesla stock has soared since the company announced its earnings on Wednesday. Wall Street analysts analyzed the factors they believe are fueling the rally. EMarketer analyst Jacob Born said the “surprise element” was the biggest factor.
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Tesla stock has fallen sharply in the two days since the automaker announced better-than-expected quarterly profits.
The stock regained lost ground after Tesla’s “We Robot” event on Oct. 10, when Elon Musk unveiled the CyberCab. He was lighter on launch details than some on Wall Street had hoped, and the stock fell 9% the next day.
Two weeks later, on Friday, Tesla stock ended the week at $269.19, its highest since September 2023. The stock is currently up 8.33% since the beginning of the year.
Kate Lehman, chief market analyst at Avatrade, told BI that Tesla’s results were “a surprise outcome and always drives up the stock price.”
Tesla announced higher-than-expected profits and gross profit margins, and these numbers are attracting attention. The company also announced that the Cybertruck has achieved profitability and said it plans to begin production of the more affordable EV in the first half of 2025.
Jacob Bourne, an analyst at Business Insider’s sister company Emarketer, said Tesla’s strong performance was unexpected and that the “biggest factor” in the stock’s jump was the “surprise element.” Ahead of the earnings report, analysts were concerned about the impact of a decline in EV demand and Tesla’s price cuts on profitability.
“Lo and behold, this company can cut prices and still be profitable,” said Tom Narayan, an analyst at RBC Capital Markets.
Dan Ives, a Tesla bull and analyst at Wedbush Securities, called Tesla’s profit numbers a “Goldilocks quarter.”
E-marketer Mr. Vaughn said questions about Tesla’s CyberCab robot taxi added to the uncertainty ahead of the company’s earnings report. Musk’s political activity is another, Born said.
Global Equity analyst Trip Chaudhry told BI that he doubts some people will stop buying Tesla because of Musk’s support for former President Donald Trump. said.
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“The negative narrative has been proven 100% wrong,” Chaudhry said.
Narayan said that while Tesla did not announce a low-cost car or announce regulatory approval for a fully self-driving car in its earnings call, the CyberCab event answered some questions that lingered. He stated that he provided a concrete answer to the question.
Musk expects his company’s robotaxi service to win regulatory approval in Texas and California next year, and Tesla employees in the Bay Area are already testing the ride-hailing service using the developed app. said.
For Musk, the rise in stock prices has increased his net worth to more than $25 trillion.
The Tesla CEO’s net worth was $277 billion as of Friday market close, according to the Bloomberg Billionaires Index.
