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Tesla has witnessed an impressive rally in its stock price, propelling its market value towards the trillion-dollar mark. However, the surge in price since the onset of 2023 has led to concerns regarding the company’s valuation, resulting in downgrades of its stock. Goldman Sachs, Morgan Stanley, and Barclays have all downgraded Tesla, although they have simultaneously increased their price targets. Tesla’s shares have experienced a remarkable 175% surge since January, advancing from a low of $101.81 to a high of $276.99 posted on the 21 st of June.
One factor contributing to Tesla’s rally is the growing excitement surrounding Artificial Intelligence (AI). The company’s shares have also benefited from a series of positive developments in recent months, including deals made by rival automakers Ford and General Motors to gain access to Tesla’s charging network. Such moves could potentially establish Tesla’s chargers as the industry standard. The announcement of China’s substantial tax breaks worth $72.3 billion for electric vehicles and other green cars has further boosted Tesla’s stock.
While the market recognizes Tesla’s long-term potential, there are concerns about the difficult pricing environment for new vehicles, which could weigh on the company’s automotive non-GAAP gross margin this year. Despite the positive outlook for Tesla’s full self-driving capabilities, enhanced by the potential of AI, and the decision to open Tesla’s Supercharger network to third parties, these factors are unlikely to significantly impact this year’s earnings.
Tesla reported lower margins in the first quarter and earnings remain vulnerable to negative revisions as it faces competition in China and potential price cuts, despite Tesla’s strong growth prospects in the long-term and its position as a global EV leader.
Tesla’s share price performance is notorious for its volatility as the stock is prone to significant fluctuations and rapid changes. Being a popular growth tech stock, Tesla is often priced at high valuations due to its potential for disruptive innovation. Currently, the stock trades at a lofty 73 times earnings and 50 times the estimated earnings for 2024, while most traditional auto stocks trade at much lower multiples.
Tesla is set to announce its global second-quarter delivery data on the weekend, providing insight into the effectiveness of the company’s price cuts and discounts in attracting consumers. Wall Street predicts a significant increase in Tesla deliveries, with estimates suggesting growth to 445,000 vehicles. This growth is partly attributed to easier year-over-year comparisons with Q2 2022 when Tesla’s Shanghai plant experienced Covid-related shutdowns.
Source: TradingView
After experiencing a 75% drop in 2022 – its largest annual stock decline ever, Tesla’s shares have more than doubled in value this year, closing at $276.99 on the 21 st of June, pushing the Relative Strength Index into extremely overbought territory. Concerns have been raised among prominent Wall Street analysts as well, regarding the rapid pace of Tesla’s rally, questioning the company’s AI credentials, also suggesting that the stock has become overbought in the short-term, and leading to a number of downgrades.
Last week Tesla’s share price rebounded close to its long-term down trend line crossing at $285 where strong resistance was encountered. The proximity to dynamic resistance combined with strongly overbought momentum conditions triggered a sharp selloff over the past three trading sessions. While the medium-term trend remains up, in the short-term further weakness is possible.
Overall, over the long-term the outlook for Tesla remains positive, marked by its potential for disruptive innovation and its leadership in the EV market. However, in the short-term concerns regarding the stock’s rapid surge remain as the share price have run too far and too fast, prompting a need for caution among investors.
Active traders looking for magnified ways to short Tesla may consider our -3x Short Tesla ETP.
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Notice
If you are not classified as an institutional investor, you will be categorised as a private/retail investor. At this time, we cannot send communications directly to private/retail investors. You are welcome to view the contents of this website.
If you are an ‘Institutional investor’, you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Eligible Counterparty Client, both as defined under the Markets in Financial Instruments Directive, or an equivalent in a jurisdiction outside the European Economic Area.
Risk Warnings
The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investor as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer.
This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.
Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.
This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.
United States Visitors
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.
Persons accessing this website in the European Economic Area
Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Exclusion of Liability
Certain documents made available on the website have been prepared and issued by persons other than Leverage Shares Management Company. This includes any Prospectus document. Leverage Shares Management Company is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, Leverage Shares Management Company shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no guarantee as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.
Leverage Investment
Leverage Shares exchange-traded products (ETPs) provide leveraged exposure and are only suitable for experienced investors with knowledge of the risks and potential benefits of leveraged investment strategies.
Cookies
Leverage Shares Management Company may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes (click here for more information). These are statistical data about users’ browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking ‘I agree’ below, you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps Leverage Shares Company provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.
This website is maintained by Leverage Shares Management Company, which is a limited liability company and is incorporated in Ireland with registered offices at 2 Grand Canal Square, Grand Canal Harbour, Dublin 2.
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