Tesla Stock (NASDAQ:TSLA)
Tesla stock is up to its old tricks once more. When the price of stock suddenly skyrockets, it can be challenging to find an explanation that makes sense. The move on Thursday, on the other hand, appears to be connected to the approaching Cybertruck. However, there are some people who disagree with your assessment.
Tesla (NASDAQ:TSLA) shares have been on an incredible run recently, rising for the 10th consecutive day to a new all-time high of $234.86, an increase of $10.29, or 4.6%. Both the S&P 500 and the Nasdaq Composite experienced gains of 1%. The S&P 500 gained 0.6% while the Nasdaq Composite gained 1%.
According to data provided by Dow Jones Market Data, the stock was the most actively traded component of the Nasdaq 100 Index on Thursday. Since October 6, when the stock closed at $238.13, Thursday’s close was the highest it has been since then. Gains totaling more than 28 percent have been accumulated over the past ten trading days. And this is the longest winning streak since January 8, 2021, when Tesla stock rose for 11 consecutive trading days in a row, making it the longest winning streak ever.
The price of the shares increased by approximately 15% in June and by 90% so far this year. Nevertheless, they have fallen by approximately 43% from their all-time high of almost $410 per share, which was reached in November of 2021.
But why hold the rally at this time? Earnings are a distant memory, and deliveries for the second quarter won’t be due for several weeks. Is it the pause from the Federal Reserve, the rally in artificial intelligence, or a new CEO at Twitter? Maybe. Thursday’s success can almost certainly be attributed, at least in part, to Cybertruck.
On Thursday, Electrek published an article stating that Tesla intends to manufacture 375,000 Cybertrucks annually. That is, to put it simply, a significant amount above what Wall Street anticipates. According to the projections of the analysts, there will be fewer than 100,000 units in 2024 and approximately 240,000 units in 2027. The mark of 375,000 is a significant milestone. In 2022, Tesla had approximately 252,000 Model Y sales in the United States. The Cybertruck is primarily a product that is manufactured in North America.
Barron’s reached out to Tesla for comment about the production of Cybertrucks, but the company did not respond.
The truck, which was presented to the public in 2019, is anticipated to be shipped toward the end of this year. The Tesla factory in Austin, Texas is where it will be constructed.
There may be additional drivers behind the recent surge in Tesla stock. Gary Black, the co-founder of Future Fund Active ETF (FFND), conducted a poll on Twitter on Thursday, asking why the stock was going up. The third spot goes to cybertruck. The option that received the most votes was to bring back the original full tax credit of $7,500 for Model 3 sedans. The event in question took place earlier in the week.
Black stated in an interview with Barron that the potential volume of sales for Cybertruck was substantial. In spite of this, there were over 10,000 votes cast, and it is reasonable to assume that retail investors were the ones who cast their votes on Twitter. Therefore, it is difficult to discount the possibility that positive tax credit news will continue to have an impact. The percentage of Tesla stock held by individual investors is significantly higher than what is typical for other mega-cap stocks.
The Cybertruck’s Disruptive Potential
One of the key factors contributing to the surge in Tesla’s stock price is Cybertruck’s disruptive potential. With its distinctive design and advanced features, the Cybertruck stands out among traditional pickup trucks. By offering an all-electric alternative with impressive performance metrics, Tesla aims to capture a significant portion of the lucrative pickup truck market.
The Cybertruck’s disruptive potential extends beyond its design and performance. As an all-electric vehicle, it aligns with the growing global focus on sustainability and the transition to renewable energy sources. The Cybertruck’s popularity among eco-conscious consumers further enhances its market appeal and potential for success.
Anticipating High Demand and Preorders
In the wake of the Cybertruck’s unveiling, Tesla witnessed an overwhelming response from potential buyers. The company reported a staggering number of preorders shortly after the event, reflecting the strong demand for this groundbreaking vehicle. The high number of preorders further fueled investor optimism and contributed to the surge in Tesla’s stock price.
Undoubtedly, the price of Tesla stock appears to be overvalued. The stock is considered to be overbought because its share price is significantly higher than its 200-day moving average of approximately $200 per share. Overbought is a technical term that, in essence, describes a situation in which a stock has increased in value very rapidly.
In the real world, overbought stock prices reflect an abundance of positive news, which is a risk for any stock in the short term. Investors are currently only thinking about the potential returns from a new model, which has the potential to be a huge success for the industry leader in electric vehicles. They are not currently concerned about the potential risks.
As the demand for electric vehicles grows and the world transitions toward a more sustainable future, Tesla and its Cybertruck are poised to make a lasting impact. With the surge in Tesla’s stock price reflecting investor confidence, all eyes are on the Cybertruck as it paves the way for the future of electric pickup trucks.
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