Is Tesla a Buy? Analyzing the Recent Surge and Future Prospects

Discover if Tesla is a buy amid stock surges, slowing car sales, and future tech like RoboTaxis and Optimus robots.
July 16, 2024
Unlock Free Stock Insights + 50% Off Discount Code!
Join thousands of savvy investors and get:
  • Weekly Stock Picks: Handpicked from 60,000 global options.
  • Ten Must-Have Stocks: Essential picks to hold until 2034.
  • Exclusive Stock Library: In-depth analysis of 60 top stocks.
  • Proven Success: 10-year track record of outperforming the market.
Sign up to our mailing list now and enjoy a 50% discount on premium services!
By submitting your email address, you consent to us keeping you informed about updates to our website and about other products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Policy and Terms of Use.

Key Takeaways

  • Recent Stock Surge: Tesla's stock has soared nearly 90% recently due to strong delivery numbers and analyst optimism.
  • Slowing Car Sales: Vehicle sales, making up 88% of Tesla's revenue, have declined, raising concerns.
  • Speculative Future Tech: Innovations like RoboTaxis and Tesla Bots offer potential but come with high risks and uncertainty

Tesla's stock has been on a wild ride, showing significant volatility over the past few months. After hitting a low at the end of April, Tesla's stock rebounded sharply, climbing nearly 90% in just over a month. This remarkable recovery has caught the attention of many investors, sparking a debate on whether Tesla is a buy right now.

The Recent Rally: What's Driving It?

The recent surge in Tesla’s stock price can be attributed to a few key factors:

  1. Q2 2024 Delivery Numbers: Tesla delivered 445,000 vehicles in Q2 2024, slightly exceeding analysts' expectations of 439,000 units. Although this 1.3% beat might seem modest, it helped boost investor confidence.
  2. Analyst Optimism: Following the delivery report, analysts from Bank of America and Wedbush Securities raised their price targets to $260 and $300, respectively. Their optimistic outlook on Tesla's potential significantly fueled the stock's rally.
  3. Anticipation for RoboTaxi Day: One of the most exciting developments on the horizon for Tesla is the highly anticipated RoboTaxi day, initially scheduled for August 8th but now delayed until October. This event is expected to provide critical updates on Tesla's advancements in autonomous driving technology.

The Challenges: Slowing Car Sales

Despite the recent surge, Tesla faces notable challenges:

  • Decline in Car Sales: In Q1 2024, Tesla's revenue from vehicle sales dropped by 4.7% year-over-year, totaling $18.8 billion. This decline reflects broader concerns about slowing car sales, which account for 88% of Tesla's revenue.
  • Growth Projections: Tesla has cautioned that vehicle volume growth for this year might be significantly lower than the previous year, contributing to investor anxiety about the company's near-term performance.

Speculative Technology: A Double-Edged Sword

Tesla's future, however, is not just about car sales. The company is heavily invested in speculative technologies that could redefine its revenue streams:

RoboTaxis: Elon Musk has long promised a fleet of autonomous robo-taxis, which could revolutionize urban transportation. Musk envisions a scenario where Tesla owners can earn revenue by sending their cars out as automated Ubers. This concept, if realized, could open a significant new revenue stream for Tesla and its customers.

Tesla Bots: Another ambitious project is the Tesla Bot, also known as Optimus. Unveiled at the World AI Conference, this humanoid robot is designed to perform mundane tasks. Musk has claimed that Optimus will be ready by 2025 and could generate more revenue than Tesla's automotive business. While promising, these claims need to be met with a healthy dose of skepticism given Musk's track record of over-promising and under-delivering.

Elon Musk's Promises: A Reality Check

Elon Musk's visionary ideas often generate excitement and drive Tesla's stock price. However, his ambitious timelines frequently face delays. For instance, Musk has promised full self-driving (FSD) capabilities for years, yet true level 5 autonomy (where a car can drive itself under all conditions without human intervention) remains a distant goal. Most experts believe level 5 autonomy is several years away, and even level 4 (high automation under specific conditions) is challenging to achieve soon.

Conclusion: Is Tesla a Buy?

Investing in Tesla means betting on both its current vehicle business and its potential to innovate and lead in autonomous driving and robotics. The recent stock surge reflects optimism about these future technologies, but investors should remain cautious about the inherent risks.

  • For Growth Investors: Tesla's innovative edge and potential new revenue streams make it an attractive option, despite the volatility and ambitious promises.
  • For Cautious Investors: The slowing car sales and frequent delays in promised technologies suggest a more measured approach, waiting for clearer signs of sustainable growth.

In summary, Tesla remains a high-risk, high-reward investment. Those considering buying Tesla should weigh its speculative future prospects against the reality of its current financial performance and the inherent volatility of its stock.


Should you invest $1,000 in Tesla right now?

Before you buy stock in Tesla, consider this:

MyWallSt founder Emmet Savage and his team of analysts have been successfully picking stocks for more than 25 years and their favorites are crowned Stock of the Month.

MyWallSt’s Stock of the Month service has more than quadrupled the return of the S&P since 2018* and will provide you with all the guidance you need to confidently build a market-beating portfolio.

Shopify became Stock of the Month in January of 2017 and has since returned 1323%*.

Join MyWallSt Invest Plus to enjoy Stock of the Month and other great benefits like:

  • Ten Foundational Stocks to hold until 2034
  • A new stock pitch each week from 60k worldwide
  • A ranked library of 60+ international stocks

Check Out Stock of the Month

*As of May 2024


Read More From MyWallSt:

Unlock Free Stock Insights +50% Off Discount Code!
Join thousands of savvy investors and get:
  • Weekly Stock Picks: Handpicked from 60,000 global options.
  • Ten Must-Have Stocks: Essential picks to hold until 2034.
  • Exclusive Stock Library: In-depth analysis of 60 top stocks.
  • Proven Success: 10-year track record of outperforming the market.
Sign up to our mailing list now and enjoy a 50% discount on premium services!
By submitting your email address, you consent to us keeping you informed about updates to our website and about other products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Policy and Terms of Use.

The Home of Successful Investing.

© 2024 MyWallSt Ltd. All rights reserved.


Services

Content

Social

Company

Support

Resources


This website is operated by MyWallSt Ltd (“MyWallSt”). MyWallSt is a publisher and a technology platform, not a registered broker-dealer or registered investment adviser, and does not provide investment advice. All information provided by MyWallSt Limited is of a general nature for information and education purposes, and you should not construe any such information as investment advice. MyWallSt Limited does not take your specific needs, investment objectives or financial situation into consideration, and any investments mentioned may not be suitable for you. You should always carry out your own independent verification of facts and data before making any investment decisions, as we cannot guarantee the accuracy or completeness of any information we publish and any opinions that we publish may be wrong and may change at any time without notice. If you are unsure of any investment decision you should seek a professional financial advisor. MyWallSt Limited is not a registered investment adviser and we do not provide regulated investment advice or recommendations. MyWallSt Limited is not regulated by the Central Bank of Ireland. MyWallSt Limited may provide hyperlinks to web sites operated by third parties. Your use of third party web sites and content, including without limitation, your use of any information, data, advertising, products, or other materials on or available through such web sites, is at your own risk and is subject to the third parties' terms of use.