Replies to post #105551 on Savvy Trades and Investments

[researcher59]

TSLA +7 to 257, on a 13 day win streak, but is the rally overdone ? Does it deserve to be up 110% YTD ?

Barron's -

DJ Tesla Stock Gains for 13th Day. The Reason Is a Headscratcher. -- Barrons.com
(Dow Jones 06/13 12:03:58)

Al Root
Tesla stock looks as unstoppable as the Denver Nuggets, crowned NBA
Champions Monday after dismantling the Miami Heat in five games. There are
many reasons the stock is up, but none of them really justify the entirety
of the hefty move.
This is one of those times when investors create a narrative to explain a
move. It reverses the ordinary pattern of investors seeing news and reacting
to it, moving a stock price.
Tesla (ticker: TSLA) stock was at $254.16 in early Tuesday trading, up
$4.33, or 1.7%. The S&P 500 and Nasdaq Composite were up about 0.4% and
0.2%, respectively.
With Tuesday's gains, shares are now up 13 consecutive trading sessions,
rising 29% over that period. It is the stock's longest winning streak yet
and the best 13-day stretch since the 13 sessions ended Feb. 9, when it rose
44%, according to Dow Jones Market Data.
Tesla stock is up about 25% in June and almost 110% in 2023. The question
is why?
There are some fundamental reasons to consider. Tesla's decision to open
up its supercharging charging network to General Motors (GM) and Ford Motor
(F) has crystallized the value of that part of Tesla's business for
investors.
Tesla isn't only a car maker. It controls the EV equivalent of a vast
network of gas stations, which means GM and Ford EV drivers will pay Tesla
regularly to recharge on road trips.
Reports that Tesla is gearing up to produce more than 350,000 Cybertrucks
a year have helped too. Wall Street projections for Cybertruck output don't
get much above 250,000 a year, according to Bloomberg.
There is more. All versions of the Tesla Model 3 now qualify for the
$7,500 purchase tax credit passed as part of the Inflation Reduction Act.
The rear-wheel drive version had lost half the credit in April because of
factors related to where the batteries, or the materials used to make them,
were produced.
And Tesla CEO Elon Musk recently named a new Twitter CEO, leaving him
more time to spend running Tesla.
It's all good news, but is it worth as much as Toyota Motor (TM)? The
increase in Tesla's market capitalization over the past 13 days is getting
very close to the Japanese car company's entire market cap.
The situation contrasts with what happened to Nvidia stock after the chip
maker disclosed its results for its fiscal first quarter. Management's
guidance for the second quarter was roughly 50% better than Wall Street was
expecting, and the stock rose 25% in response as investors responded to
clearly significant news.
Earnings per share estimates for Nvidia's fiscal year 2024, which ends in
January, have gone to about $7.40 a share from $4.50 a share since the
first-quarter report, for a gain of about 64%. Nvidia stock has risen about
31% since then.
Investors can argue about whether artificial intelligence will be a
sustainable creator of demand for Nvidia chips, or whether Nvidia stock
should be up more or less. But the reason the shares took off isn't part of
the debate.
With Tesla, the reason is always up for debate. Factors moving the stock
can also include difficult-to-contextualize data from China about weekly car
insurance sales or tweets from Elon Musk.
What is indisputable is that Tesla is the most valuable car company on
the planet. Its stock is often the most heavily traded security in the
entire U.S. market.
There is rarely a dull day investing in Tesla.
Write to Al Root at [e-mail]