People who think Tesla’s (NASDAQ: TSLA) stock is doing poorly should think again. For those who bought it at $480 in mid-December, the current $300 price is ugly. For those who bought it a year ago, their return is up 80%. Tesla traded for $168 last June, which is its 52-week low.
Key Points
Tesla’s Stock Has Done Well Long Term
Battles With Trump Have Hurt Tesla Recently
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However, due to recent problems, Tesla may still have a long way to fall back toward that low.
There was a reason Tesla’s stock was relatively low in mid-2024. First quarter 2024 revenue came in at $21 billion which was below Wall St. expectations, EPS missed expectations as well. The Cybertruck was launched in late 2023 and was priced above what Tesla had forecast. The Cybertruck range on a single charge was also below what Tesla said it would be months before the launch. Investors were skeptical about Tesla’s prospects.
Despite a move up in Tesla’s stock in mid-2024, it did not take off until November, about the same time the results of the 2024 Presidential election were announced. Due to Elon Musk’s relationship with Donald Trump, the stock spiked up. Musk’s work with the federal government, followed by a fallout with the President, led to a significant decline in the stock’s value recently.
Where does Tesla’s stock price go from here? It depends on whether Tesla is an AI company or just a car manufacturer.
Tesla’s robotaxi hits the streets of Austin this month. If it becomes clear that it is a car that requires no driver assistance at all, it will be evident that Tesla has broken through with an AI-powered vehicle. Then, Musk is in a race with other companies led by Alphabet’s (NASDAQ: GOOG) Waymo. The results of this race will show who will own the self-driving market in the U.S. Tesla’s work in China is just as important. The growth of EVs there is spectacular. Local car manufacturers claim that they are far along in self-driving technology, too.
If Tesla’s self-driving AI products miss expectations, they may fall into the category of every other EV company. And it may not even keep control of that market, especially in the EU and US. Sales have craters in Europe. Tesla does not release US features. However, it is likely in trouble in the U.S. as well.
Whether Tesla’s stock goes up or down in the future will have as much to do with its technology as the public’s perception of Elon Musk.
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