July 05, 2024 at 08:46AM
It’s ok to fall. It’s not ok to stay there. Perhaps that’s
the new motto at Elon Musk’s Tesla. The company has erased its year-to-date
losses by adding a remarkable $150 billion in market value in just three days.
Just a few months ago, Tesla was a laughingstock on Wall
Street. Wells Fargo famously called it a growth
stock with no growth. Analysts started to question why it
was still considered among the high-flying “Magnificent Seven” after
Tesla ranked last among 500 stocks in the S&P index.
The worst seems to be behind them now. After a painful 40%
decline from January to late April, the electric vehicle maker has almost
recovered all its losses and is now just 0.8% down for the year.
In the last couple of months, Tesla stock has surged by an
impressive 75%, adding over $300 billion to its market cap.
Earlier this week, Tesla released its second-quarter
delivery numbers, which fueled a two-day surge of about 17% in its stock price.
The company delivered 443,956 electric cars, surpassing expectations of 438,000
vehicles.
However, the actual deliveries were lower compared to the
previous year, which could be concerning. On an annualized basis, vehicle
deliveries dropped by 4.7% compared to the same quarter last year, marking
Tesla’s second
consecutive quarterly decline in sales. Yet, investors seem
unfazed.
It appears that speculation outweighs value investing in
popularity. The fear of missing out continues to drive decisions, causing
significant gains on positive news for popular stocks like Tesla, despite its high P/E
ratio of 53.63.
Overall, things are looking better for Tesla and maybe it’s
even out of the slump. Moreover, according to the Bloomberg Billionaires Index,
Elon Musk has regained the title of the world’s richest person. Are there any
other concerns left to worry about?
This article was written by FL Contributors at www.forexlive.com.
