Key Takeaways
- Tesla's shares are up a staggering 144.42% from 6 months
- Driven by Trump's presidential win, debt reduction, and strong sales performance
- Tesla's stock may be overbought, with a market cap currently at $1.36T
- If you currently hold TSLA: Consider taking partial profits as the stock approaches new resistance levels
Tesla Stock News, What's the Latest?
For the first time, Tesla (TSLA) shares have closed at an all-time high, leading to an exceptionally successful gamble by CEO Elon Musk, on supporting the Trump administration in the recent US election.
Tesla's shares are up a staggering 144.42% from 6 months earlier. Due to the Trump win, investors are poised toward a bullish momentum for Tesla shares, with multiple buy signals by analysts leading to higher gains throughout 2024 and into 2025.
Why is Tesla Stock Rising?
Tesla and Trump
Tesla and Trump are now closely entangled with one another, potentially due to the Trump administration's support of the EV maker's business and any corresponding businesses linked to or indirectly linked to Elon Musk.
Reduction in debt
As of September 30, 2024, Tesla's cash, cash equivalents, and investments were over $33.6 billion, which was more than its total debt:
Total debt: Tesla's total debt was around $7.4 billion
Net cash: Tesla's net cash was $26.3 billion
Sales performance
Tesla's Q3 2024 earnings beat expectations, with revenue rising 8% year-over-year to $25.18 billion and net income up almost 17% to $2.17 billion
What Do the Analysts Say About Tesla Stock?
Many analysts have shown strong recognition of Tesla's future, as a leader in robotics and self-driving vehicles, leading to analysts increasing their stock price target.
Goldman Sachs:
"While we see some fundamental headwinds to the core auto business over the near to medium term and see valuation as full, we also believe the stock could remain at a higher multiple to reflect the long-term opportunity tied to [Full-Self-Driving]/robotics given broader market interest in potential AI beneficiaries," Delaney said.
Previous Target Price: $250 (Neutral)
New Target Price: $345 (Neutral)
Percentage Increase: 38%
Morgan Stanley:
The investment bank highlighted growing investor excitement about Tesla's leadership in AI, renewable energy, and onshoring initiatives, underscoring the company's potential to diversify into markets beyond the automotive sector.
Previous Target Price: $310 (Overweight)
New Target Price: $400 (Overweight)
Percentage Increase: 29%
Cantor Fitzgerald:
Andres Sheppard of Cantor Fitzgerald increased the firm's price target for Tesla from $255 to $365 per share, citing optimism about the company's robotaxi initiatives and the potential development of a federal framework for self-driving vehicles.
Previous Target Price: $255 (Neutral)
New Target Price: $365 (Neutral)
Percentage Increase: 43%
Bank of America:
After visiting Tesla's Texas Gigafactory, John Murph raised his price target, expressing confidence in Tesla's growth prospects for 2025 driven by its core EV business and the upcoming launch of its robotaxi. Murphy also highlighted that the Optimus humanoid robot is a tangible development, with its progress set to accelerate.
Previous Target Price: $350 (Neutral)
New Target Price: $400 (Neutral)
Percentage Increase: 14.3%
Roth MKM (Craig Irwin):
Shifted from bearish to bullish due to the upward trend in Tesla's stock, a lack of negative catalysts, and positive momentum tied to the Trump effect.
Previous Target Price: $85 (Neutral)
New Target Price: $380 (Buy)
Percentage Increase: 347%
What Does This Mean for the Future?
Short-term outlook
Tesla's stock may be overbought, with a market cap currently at $1.36T. The pressure is now even higher for Tesla to deliver significant revenue growth, with technical indicators suggesting a pullback or consolidation in the near term.
Long-term outlook
Event-driven factors, such as strong sales in China and reduced competition in the robotaxi market, provide a positive long-term outlook but may not immediately offset valuation concerns and overbought technical conditions.
General recommendations
If you currently hold TSLA: Consider taking partial profits as the stock approaches resistance at R2 (435.01). Monitor for a pullback to re-enter at lower levels.
If you do not own TSLA: Avoid buying at current levels due to overbought conditions and potential trend exhaustion. Wait for a pullback to key support levels (e.g., Fibonacci pivot point at 374.38 or SMA_5 at 394.82) before considering entry. Ensure RSI moves below 70 before initiating new positions.
Conclusion
Tesla's meteoric rise in 2024 has been driven by a unique blend of political alignment, robust financial management, and impressive sales performance. While the stock's performance has delivered exceptional returns for investors, its current valuation and technical signals suggest caution.
For those holding TSLA shares, now may be an opportune time to lock in partial profits as resistance levels loom. For prospective investors, patience and a strategic approach to timing entry points will be key.
As Tesla continues to navigate evolving market conditions and capitalize on its strengths in innovation and global expansion, its long-term prospects remain compelling. However, the road ahead may feature significant volatility, making disciplined investment strategies and close monitoring of market signals essential.
