Will Tesla Stock Go Up in the Long-term?

Key Takeaways:

• Tesla shares are down 60% from all-time highs while the broad market is soaring.
• The company is growing its production volumes but drastically cutting its selling prices.
• The stock still looks expensive on a three-year horizon.
• Tesla is soaring after 2024 Q1 earnings.

Tesla (TSLA) announced first-quarter earnings and revenue that fell below analysts' expectations on Tuesday. Despite these results, investor confidence remained high, as evidenced by a 12% surge in TSLA shares on Wednesday. This optimistic response was largely driven by CEO Elon Musk's announcement of upcoming, more affordable models. Additionally, Musk's projection of increased vehicle deliveries in 2024 and his emphasis on the advancement of Tesla's Full-Self Driving (FSD) technology during the earnings call further bolstered investor sentiment.

Tesla Stock History Chart

2013-2014:

The stock traded sideways in a narrow range for more than two years after coming public in the mid-$20s in June 2010, finally breaking out in the second quarter of 2013. The uptrend attracted broad media attention, setting off a momentum-fueled advance that stalled above $250 in March 2014.

2015-2017:

Tesla stock added another 26 points in the next six months and settled into a volatile sideways pattern that generated a fresh buying wave after the 2016 presidential election. The uptrend ended at $387 in June 2017, giving way to a pullback, followed by a failed breakout that posted an all-time high less than two points above the prior high in September.

2018:

The price then eased into choppy range-bound action that carved three additional breakout attempts into the December 2018 high at $379. The stock fell 130 points to range support in the next five months and broke down on heavy volume, dropping to a two-year low in the $170s in June.

2019:

The breakdown cut through the .50 retracement of the 2016 into 2018 uptrend (black lines), while the bounce into July 2019 places resistance at the .382 Fibonacci retracement of the 2017 into 2019 decline (red lines). In addition, the 50- and 200-day exponential moving averages (EMAs) rolled over after range support failed and are now pointed straight at resistance near $250.

 Tesla may have failed the second attempt in two months to mount tough resistance above $250 and could now lose ground at a rapid pace, entering a critical test at June's three-year low in the $170s.

Will Tesla Stock Go Up in the Future?

Tesla's stock history from 2013 to 2019 showcases a period of significant growth and challenges. However, history doesn't repeat, but rhymes. Is the long-term upward trend set to continue? Here are the analysis below.

Tesla's strategic investment in Full Self-Driving (FSD) capabilities and other software innovations may remain pivotal in the long-term trend. By integrating advanced AI and machine learning technologies into its vehicles, Tesla not only enhances the appeal and utility of its cars but also opens up potential new revenue streams from software and services. This approach underscores Tesla's commitment to pushing the boundaries of automotive technology. "We've updated our future vehicle lineup to accelerate the launch of new models ahead of the previously mentioned start of production in the second half of 2025,” Elon Musk said on 2024 Q1 earnings. "These new vehicles, including more affordable models, will use aspects of the next-generation platform as well as aspects of our current platforms, and we'll be able to produce on the same manufacturing lines as our current vehicle lineup."

Analyst Ben Kallo maintains a bullish stance on Tesla's long-term prospects despite expecting near-term volatility. He continues to view Tesla as a core holding, emphasizing the company's strong future potential despite current challenges. However, others caution about the challenges such as competition and market saturation that could affect growth. Learn what specific factors contribute to Tesla's market leadership in EV sector for its long-term growth.

Is Tesla a Buy, Sell or Hold in the Long-term?

Phillip Securities recently downgraded Tesla to a hold, reflecting a more cautious stance due to the current market conditions and Tesla's recent performance. While Seeking Alpha suggests that despite recent price drops and market challenges, Tesla remains a long-term buy due to its potential in advanced technology integration and autonomous taxi services. They believe the current skepticism about the share price presents a buying opportunity for long-term investors. Given the mixed recommendations from various analysts, the decision to buy, sell, or hold Tesla stock depends significantly on your investment horizon and risk tolerance.