Facing challenges during most of 2024 and acquiring the unfavorable label of the worst-performing S&P 500 stock for several months, Elon Musk’s electric car (EV) firm, Tesla Motors (NASDAQ: TSLA), experienced a remarkable turnaround after its recent delivery update.
Remarkably, the stock not only climbed significantly but surged enough to become positive – by 5.84% – in the year-to-date (YTD) graph and an impressive 51.34% over the last 30 days of trading. The ongoing rally has driven the current Tesla stock price to $263.19.
Nonetheless, despite the excitement and the temporary vigor, uncertainties could shroud the continued surge of TSLA stock.
Tesla Motors: Transitioning Towards Tesla Robotics?
At the forefront, Elon Musk’s idea that Tesla should not only be seen as a carmaker but as an artificial intelligence (AI) and robotics entity remains mostly unproven.
While the company has exhibited its ‘Optimus’ robot and is in the experimental phases of its self-driving technology, the former remains at a relatively small scale, and the latter is encountering setbacks due to prolonged delays and indications that Mercedes (ETR: MBG) is reportedly ahead.
The true test for Tesla as an AI entity could come on August 8 when Elon Musk teased the reveal of an autonomous taxi – often referred to as ‘Cybercab’. The significance of the event remains uncertain as details on its scale are scarce, and doubts persist about its actualization given Musk’s reputation.
Can Tesla’s Upward Trajectory Endure?
Furthermore, the delivery report itself – the catalyst for the current surge – raises doubts about TSLA’s mid-term outlook.
This seems sturdy primarily in comparison to investor concerns, hinting not at Tesla having evaded all challenges but rather that the situation isn’t as critical as it was in January when Musk’s EV company managed to deliver only one vehicle in South Korea.
In this context, it mirrors Tesla’s recent earnings report, which prompted a brief surge by not being as dire as initially feared.
From a stock market perspective, the current overbought position of TSLA shares, the most since June 2023 as of July 10, is unsettling.
This raises worries about a possible imminent correction, particularly concerning given Tesla’s experience of a surge in July and August of last year followed by an enduring decline starting in September.
Has Tesla Become a Meme Stock?
Recent market activities by TSLA may lead Bill Gross, the co-founder of Pacific Investment Management Company (PIMCO), to view Tesla as a meme stock akin to firms like GameStop (NYSE: GME) and Chewy (NYSE: CHWY).
Yet, this viewpoint is not new. In specific circles, the EV manufacturer has been considered a meme stock for a long time due to its response to Elon Musk’s statements and actions, and its seemingly high valuation compared to rivals in both the traditional and electric vehicle industries.
