Tesla Stock Stages a 3-day Rally of 11%: Out of the Woods?
$Tesla(TSLA.US$ stock has risen for three consecutive days, with an overall gain of 11%, following a sharp decline of nearly one-fifth of its value in less than two weeks.
Why Tesla's share price struggled
The recent decline was spurred by underwhelming third-quarter profits and CEO Elon Musk's concerns about the macroeconomic situation affecting new car buyers.
If interest rates remain high or if they go even higher, it's that much harder for people to buy the car. They simply can't afford it," Musk noted in the conference call for investors.
Although sales growth for electric vehicles is strong, it is decelerating, and the market is becoming saturated with too many EV models given the current demand.
Tesla remains the EV Goliath. However, its sales grew more slowly than other EV manufacturers. The year-over-year growth rate of all-electric car sales was limited and amounted to only 27%.
All-electric car sales in Q3'2023 (YOY change):
● Tesla: 435,059 (up 27%)
● BYD: 431,603 (up 67%)
● Volkswagen Group: 209,394 (up 41%)
Will Tesla get out of the woods?
Despite Tesla's recent numbers, billionaire Ron Baron remains bullish about the company's future. Baron says Tesla's valuation can hit $4 trillion.
We' ve made about 20 times our money since then….we'll make another five times in the next seven or eight or nine years," longtime Tesla bull Baron said.
That implies a market capitalization of about $3.5 trillion or $4 trillion based on recent prices.
Musk tweeted that the valuation is possible if the company can "knock the ball out of the park several times." The home runs Tesla needs are achieving fully self-driving technology, launching the long-awaited Cybertruck, and developing a lower-priced EV model.
Trading in Tesla stock is always a battle between bulls and bears, between hope for what might happen years from now and fear over what could happen in the short term.
Mooers, do you think Tesla can be a multi-trillion dollar company in the future?
Source: Barron's, InsideEVs, The Street
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Fire Cat : The demand for Tesla stocks is very high. As long as the company is strong, the sellers will drive the price down to buy in when people dump the stock out of fear. We have been through many of these cycles… see who is the last one standing. Recall where it came from and those who held on the early stocks, they are the one who are laughing right now. I hope it will be a multi trillion company, I will be the one laughing .
151345481 : It is impossible to surpass Apple. After all, the upper limit of automobile demand growth is obvious
frank Crane_3546 : Yes! The innovation & creativity of a company really depends on the founder of the company like Elon or Alex Karp! Ever since Apple lost Steve Job it has become a safe predictable company living on past glory of innovation! Tim Cook does not inspire disruptive innovation but safe bland invention….
151757323 : Tesla is the only other EV manufacturer that is profitable.
soon the energy business will make a material high margin contribution to profit.
cyber truck will likely become a 700K annual production with high margins due to the simplification of manufacturing. Lack of paint is a huge speed increase.
Tesla insurance is a slow moving buddies, but it helps to lower the TCO which encourages people to buy a Tesla.
factor in the charging networks by other companies are poorly run and Tesla has a huge most against the competition
Lu Loh : Tesla's future is AI robots, and electric cars are just the beginning. Elon is a person who likes challenges
生生世世生生世世 151345481: The phone is the same, no one is creative, no one will buy it
102661548 : It's very easy to make a big statement. Who can predict future events? Why will it use a market value of 4 trillion dollars? Only good performance can support the stock price. Tesla's valuation is clearly too high, performance is declining, and prices are constantly being reduced. Only reasonable prices can attract investors
102571500 : Musk has surpassed Jobs. SpaceX, Starlink. I want Musk's Xphone, an AI phone, a super smart phone. She'll tell you, master, you have a beautiful woman on your right hand side. Master, your wife is here. Run fast. hahaha. Go Musk! Soon we'll be able to see the Xphone.