Tesla Soars Another 6%, Recovers Early-Year Stock Price... Wall Street Says "Good News Remains"

The stock price of U.S. electric vehicle maker Tesla continued its strong performance, recovering to the level seen at the beginning of the year. This improvement in investor sentiment is attributed to second-quarter vehicle delivery results that exceeded market expectations. Positive reports, including target price upgrades, have been continuously released on Wall Street.

On the 3rd (local time) at the New York Stock Exchange, Tesla's stock price rose 6.54% from the previous close, finishing at $246.39 per share. Following sharp increases of 6.05% on the 1st and 10.2% on the 2nd, the stock maintained a strong upward trend on this day as well. The stock price has risen more than 25% over the past five days. Market capitalization also expanded to approximately $785 billion.

The closing price on this day is similar to the stock price at the beginning of the year (around $248). Compared to the year's lowest point of $138.8 in April, it has surged by more than 70%. Although Tesla showed weakness earlier this year due to slowing electric vehicle demand, intensified competition, and profitability pressure from price cuts, it has been on a solid recovery trend since late last month. The year-to-date stock price decline narrowed from about 44% in April to less than 1% on this day.

This is analyzed as a result of Tesla's second-quarter (April to June) vehicle delivery figures released the previous day, which exceeded expectations. Tesla's second-quarter deliveries totaled 443,956 units, down 4.8% year-over-year but nearly 15% higher than the first quarter's 386,810 units. This also significantly surpassed Wall Street's forecast of 439,000 units compiled by FactSet. Additionally, the energy storage segment recorded its highest quarterly performance ever, suggesting potential market share expansion and acting as a positive factor for the market.

Accordingly, positive assessments from Wall Street continue. Dan Ives, senior analyst at Wedbush Securities, who had stated "the worst is behind us" immediately after the delivery figures were released, raised Tesla's 12-month target price from $275 to $300 on this day. He said, "The key to Tesla's stock price is recognizing Tesla as the most undervalued artificial intelligence (AI) player in the market," adding, "The August Robotaxi Day will lay the stepping stone toward the future of autonomous driving." He believes there are still positive catalysts remaining.

The Citibank analysis team also evaluated in an investor memo on this day that "compared to the negative investor sentiment seen over the past six months, there is room for improvement in Tesla stock and electric vehicle investment sentiment." They commented on Tesla's second-quarter deliveries, saying, "There will be a favorable stock price reaction," and added, "The market will now focus on the gross margin, which is a matter of price versus cost." The Canadian RBC analysis team highlighted that Tesla sold 9.4 GWh of battery storage devices in the second quarter alone, interpreting this as "either Tesla's market share has expanded or the market is rapidly growing. It is likely a combination of both."

Adam Jonas, analyst at Morgan Stanley, also evaluated Tesla's second-quarter delivery results as "the first positive surprise of the year," stating, "Tesla reminded investors that it is not just a car company through a reduction of 33,000 units in inventory and large-scale energy storage device performance." Morgan Stanley has set Tesla's target price at $310, indicating about a 26% potential upside from the current stock price.

However, concerns have also been raised. Tesla CEO Elon Musk stated at last month's shareholders' meeting that the electric vehicle industry is still undergoing a transition and that demand will continue to face difficulties in the short term. Dan Levy, senior analyst at Barclays, told Yahoo Finance on this day, "There is still a risk of further price cuts, and questions about fundamentals remain. We are still experiencing somewhat of a winter in electric vehicle demand." Barclays has set Tesla's target price at $180.