Tesla Halts 11-Day Rally, Plunges
Stock Price Outlook Mixed… ‘Robotaxis’ the Key
[사진 출처 = AFP 연합뉴스]
Opinions are divided on Tesla stock, the most-held foreign stock among domestic investors. Some see it as a “meme stock” (trend stock) rising rapidly due to hype, while others believe Tesla’s upward surge will continue.
According to the Korea Deposit Insurance Corporation, as of July 10th, Tesla, the leading American electric vehicle company, was the most held stock by overseas stock investors, with a deposit amount of $15.627 billion (21.55 trillion won).
Tesla’s stock price ended its 11-day consecutive upward rally since July 25th and turned downward on July 11th (local time). The downturn is attributed to a Bloomberg report that the release of the self-driving car “RoboTaxi” (unmanned taxi), originally scheduled for August 8th, was postponed by two months.
The recent surge in Tesla’s stock price was fueled by its second-quarter vehicle delivery (sales) performance surpassing Wall Street analyst expectations.
Tesla’s second-quarter deliveries reached 443,956 units, representing a 4.8% year-over-year decline, but it slightly exceeded market expectations. The buying spree was driven by the perception that the bottom had been reached as electric vehicle sales were stronger than market expectations.
Expectations for robotaxis and the strong growth of the energy generation and storage sector, which operates the energy storage system (ESS) business, appear to have contributed to the stock price increase.
Lim Eun-young, a researcher at Samsung Securities, stated, “Expectations for autonomous driving technology have risen leading up to the announcement of the robotaxi technology.” She added, “Performance in the second half of the year, including the second quarter, is also expected to be sluggish, so the gap between performance and stock prices is widening.”
Tesla was left out of the AI rally this year. Concerns over slowing demand for electric vehicles and increasing competition caused the stock price to fall from $240 at the beginning of the year to $140 in April. Before the rally began on July 24th, Tesla’s stock price had declined 26.50% for the year. However, the stock price has recovered to its early-year levels, rising more than 40% over the past 11 trading days. It also regained the top spot in overseas stock deposits, previously lost to Nvidia, within just one month.
The securities industry has also raised its target stock price for Tesla, predicting further increases.
Park Yeon-joo, a researcher at Mirae Asset Securities, said, “Due to the faster-than-expected growth of the energy sector, short-term performance, which had been a concern, will also exceed market expectations.” “As the energy sector’s profit contribution improves, the quality of profits, previously solely dependent on electric vehicle sales, is expected to improve,” she added, raising her target stock price for Tesla from $225 to $307.
However, with the rapid increase in the stock price over a short period, some have become cautious regarding Tesla, comparing it to a meme stock.
Bill Gross, co-founder of Pimco and known as the “bond king” on Wall Street, said on social media on July 10th, “It seems like a new meme stock comes out every two days these days,” noting that “most of them are pump and dumps (stocks that rise and fall sharply).”
On the other hand, Cathie Wood, founder of Ark Investment Management and known as a Tesla bull, predicted that Tesla’s stock price will reach $2,600 by 2029.
Tesla Stock Halts Rally, Plunges: Robotaxis in Focus
The most-held foreign stock by domestic investors, Tesla, saw its 11-day winning streak end abruptly on July 11th, plunging amidst mixed opinions regarding its stock price outlook. While some view it as a mere “meme stock” riding a wave of hype, others believe its upside potential remains intact. The key factor driving the volatility seems to be the company’s “RoboTaxi” ambitions.
Tesla’s Recent Run and the “RoboTaxi” Delay
As of July 10th, Tesla boasted a whopping $15.627 billion (21.55 trillion won) in deposits from overseas investors, solidifying its position as their top pick. However, the stock’s recent surge can be attributed to factors beyond the “meme stock” phenomenon.
Tesla’s second-quarter vehicle deliveries, which surpassed Wall Street’s expectations, spurred the stock’s rally. Exceeding market concerns, electric vehicle sales appeared to have reached a turning point, fueling the buying spree. Additionally, expectations regarding robotaxis and the rapid growth of Tesla’s energy generation and storage sector contributed to the stock’s upward trend.
However, the anticipated launch of Tesla’s self-driving car “RoboTaxi” on August 8th was postponed by two months, according to Bloomberg. This news dampened investor enthusiasm and triggered the stock’s downturn.
Mixed Perspectives on Tesla’s Future
The Bullish Argument:
With the energy sector experiencing rapid growth, Tesla’s short-term performance is anticipated to surpass market expectations. The profit contribution from the energy sector is also seen as diversifying Tesla’s previously solely electric vehicle-dependent profit streams, enhancing the company’s overall profitability.
Mirae Asset Securities’ analyst, Park Yeon-joo, raised the target stock price for Tesla from $225 to $307, citing these optimistic factors.
The Bearish Argument:
Concerns persist regarding slowing demand for electric vehicles and intensifying competition, leading some to view Tesla as a mere “meme stock.” Industry veteran Bill Gross, co-founder of Pimco, echoed this sentiment on social media, comparing Tesla to “pump and dumps” – stocks that experience rapid rises followed by even quicker plunges.
Tesla, despite its recent rally, was notably absent from the AI-led market boom earlier this year. The stock plummeted from $240 at the start of the year to $140 in April before recovering to its initial value by late June. This volatility highlights the inherent risk and uncertainty surrounding the company.
Tesla’s Long-Term Outlook: A High-Growth Vision
Cathie Wood, the founder of ARK Investment Management, known for her bullish stance on Tesla, maintained her optimistic outlook, predicting the stock price to reach $2,600 by 2029.
Tesla’s long-term growth potential hinges on its ability to deliver on its ambitious plans. Key factors include the successful rollout of its “RoboTaxi” service, further advancements in its electric vehicle technology, and continued growth in the energy sector.
