In the first half of 2024, Tesla's stock price fell by more than 20%, with a market cap evaporating over $160 billion. Among the seven giants of the US stocks, it was the worst-performing company and also the S&P 500 index constituent with the largest market cap decline. However, in the second half of the year, Tesla began to turn things around, and its stock price rose with a trend of a potential rebound, surging by nearly 17% for two consecutive days.

Among them, second-quarter delivery data unexpectedly contributed the majority of credit. The data shows that, in the second quarter of 2024, Tesla produced about 411,000 electric vehicles worldwide, and delivered around 444,000 vehicles; the delivered volume continued to decline year on year for the second quarter, but better than the market expected 439,300 vehicles and it was the first time in a year that it exceeded expectations.

This data also exceeded Elon Musk's expectations. Earlier, Musk warned that the second quarter might be worse than the first quarter. Fortunately, Tesla's sales policy turned the tide in the second quarter and successfully delivered a satisfactory answer to the market.

In the crucial Chinese market, Tesla implemented disguised price cuts such as low interest rates, temporary zero down payment and zero interest rates, which effectively stimulated demand and achieved impressive results. According to data from the China Association of Automobile Manufacturers and authoritative media, Shanghai-based Tesla's super factory delivered over 70,000 vehicles in June, up 7% from the previous month; in the second quarter of this year, Tesla's sales in China increased by 10.2% compared to the previous quarter.

In addition to delivery volumes, Tesla has brought investors many 'extra surprises', attracting many investment banks such as Goldman Sachs, Wedbush, and Stifel, all of whom are optimistic about Tesla.

Tesla, the most underrated AI company! What other trump cards does Tesla have?

1. 'Major turning point' - Robotaxi's first appearance on August 8th.

Although Tesla's stock price has been declining, its Q2 delivery data has caused a 10% surge in the stock price. Market analysts point out that investors may be 'more concerned about other developments at Tesla' to some extent. Analyst Ben Kallo of Robert W. Baird said:

Compared with the first quarter of 2024, investors were too focused on the over-expectation of short-term delivery expectations, but now we are seeing more and more investors turning their attention to the August 8th Robotaxi event and related opportunities with FSD.

On August 8th, Tesla will launch the Robotaxi (autonomous driving taxi) technology, which has been highly praised by Tesla's major shareholders and CEO Musk. Prior to this, Musk had stated that autonomous driving cars were a 'trillion-dollar opportunity,' and yesterday he arrogantly challenged the shorts on the social platform X, saying:

Once Tesla fully solves the problem of autonomous driving and robots Optimus begins mass production, anyone who still holds a short position will be eliminated, even Gates will not be an exception.

Dan Ives, a Tesla bull and Wedbush analyst, boldly predicts that Tesla's worst period is already behind it, and the Robotaxi Day a month later will be a 'major turning point.' He said:

Tesla is the most underestimated AI company in the entire market, and the next month's Robotaxi Day will be a key moment in Tesla's history, which will be a catalyst for Tesla's short-term stock price growth.

2. 'AI trump card' - Energy storage products.

In addition to automotive products, Tesla also holds the crucial 'AI trump card' of solar energy and energy storage business. Tesla's energy storage business mainly includes two types of products: Powerwall and Megapack. Powerwall is a household energy storage system that can store electricity generated by solar panels for use at night or during power outages. Megapack is a large commercial energy storage system that is suitable for large commercial and industrial customers such as data centers, hospitals, and schools.

According to Tesla Energy, a subsidiary of Tesla, its energy storage products installed in the second quarter reached 9.4 GWh, setting a record for the highest quarter and more than doubling the previous quarter; in the first half of the year, Tesla deployed a total of 13.5 GWh of energy storage products, which is a staggering growth rate, almost approaching the total volume of last year.

Goldman Sachs analysts highly value the application of energy storage in the AI era, calling it the key 'winner' for the next round of AI investment. They said that AI data centers are being built across the United States, and these data centers will become 'power-hungry monsters,' making Tesla a key participant in the US energy market. From a financial perspective, this may also become Tesla's new growth point. Goldman Sachs predicts that Tesla Energy's revenue in the 2024 fiscal year will exceed $7 billion, and the profit margin may exceed Tesla's automotive business by 2025.

With Tesla's stock price surging for two consecutive days, how should we deploy it next?

Tesla has risen sharply for two consecutive days, reaching its highest level in over five months, and has for the first time since January exceeded the key technical level of the 200-day moving average. If we calculate from the phased low on April 23 to now, its stock price has accumulated by 62.80% in just over two months, which can be said to be very strong. In terms of product structure, the operating income of products worth 10-30 billion yuan is 401/1288/60 million yuan respectively.

But the market's enthusiasm seems far from cool. Currently, Tesla's skewness (measuring the premium of call options over put options) has reached its maximum since February 1, 2021. This means that the market is currently at an "extremely bullish" level, and the market sentiment has changed significantly compared to three weeks ago. The last time this value reached this level was on April 29, and since then, Tesla has accumulated a 37% increase.

Analyzing past data, July is also a "lucky month" for Tesla. In the July of the past nine years, Tesla's stock price has risen six times, with a probability of 67%; among them, in 2020 and 2022, the stock price rose sharply, with a monthly increase of over 32%.

Another key point in July is that Tesla's financial report will be released after the market on July 23. Analyzing its performance in the past 12 quarters, it was found that Tesla has a 67% chance of rising in the two weeks after releasing the financial report, with an average increase of 8%.

Currently, the market is still enthusiastic about the layout of Tesla stocks and leveraged ETFs, and the frenzy seems to have not ended. Last night, Tesla's trading volume in the entire U.S. stock market ranked first, surpassing the newly-crowned stock king Nvidia for the first time in months. The trading volume of leveraged ETFs investing in Tesla is also very high, with a turnover of 1.145 billion U.S. dollars, which is nearly double that of the previous day, and a rise of 20%, which is very impressive.$Direxion Daily TSLA Bull 2X Shares (TSLL.US)$The transaction amount reached 1.145 billion US dollars, nearly double compared to the previous day, with an increase of 20%, which is very substantial.

Under this sharp rise, IBD analysts believe that using options strategies is also a good method. They recommend investors to use the option bull call spread strategy to expand the bullish position. This is one of the methods to reduce the risk of principal under the premise of bullishness. Investors can buy and sell Tesla calls with the same expiration date but different exercise prices.

For example, buy a call with an exercise price of $240 and an expiration date in September, and sell a call with an exercise price of $245 and the same expiration date to form a bullish call option spread. The break-even price for executing this transaction is the exercise price of the bull option plus the option premium, which is about $241.8. The maximum potential profit is $320 (the difference between the exercise price difference multiplied by 100 minus the option premium paid).

In recent days, several Wall Street banks have greatly raised Tesla's target price. Among them, the highest was a target price of $310 from Morgan Stanley, CFRA analysts raised Tesla's 12-month target price to $250, and Wedbush also gave a target price of $275. There is still a lot of room for the stock price to rise from the current level.Click to view free Wall Street analysis>>

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