Tesla stock rose again during trading on Wednesday, July 3, setting a new record of consecutive gains and extending its spring and summer stock price surge to around $275 billion. Analysts quickly adjusted their ratings and price targets for the electric car manufacturer based on its unexpected second-quarter sales performance. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.
Tesla (TSLA) stock has risen more than 68% since its late April low, partly due to CEO Elon Musk's renewed focus on the group's self-driving and AI ambitions, and an important investor vote approving its deferred $56 billion compensation agreement.
Musk also plans to showcase the group's autonomous taxi prototype at an event on August 8, marking the group's transition from traditional car manufacturing roots to a broader business model dominated by self-driving, energy storage and next-generation robot technology.
At the same time, higher-than-expected second-quarter vehicle delivery data released on Tuesday eased investor concerns about declining demand for electric cars and the continued global price war, which could erode Tesla sales and further narrow its already shrinking profit margin.
Although overall sales in Asia fell by nearly 25% and demand in Europe remained weak, Tesla delivered about 444,000 vehicles in the three months ending in June, exceeding Wall Street's expectations.
Tesla delivered a total of 422,405 Model 3 sedans and Model Y mid-sized SUVs, as well as 21,551 of its higher-priced Model S sedans and Model X full-sized SUVs.
Production dropped by 14.3% to 410,831 vehicles, partly due to supply chain tension and the closure of the Berlin Gigafactory. Model 3/Y production was 386,576 vehicles, and Model S/X and "other models" production was 24,255 vehicles.
JP Morgan analyst Ryan Brinkman has indicated that total deliveries are about 22% lower than Wall Street's consensus at the beginning of the year, suggesting that Tesla may have lost its advantage over the entire auto industry in the first half of the year.
Brinkman and his team reiterated their $115 price target and "light position" rating after Tesla's second-quarter update on Tuesday.
Wedbush analyst Dan Ives raised his price target on Tesla by $25 to $300, calling the second-quarter delivery data a "major inflection point" in his bullish outlook. He expects the stock price to rise to $400.
"The key to Tesla stock is [Wall Street] recognizing that Tesla is the most underestimated artificial intelligence investment opportunity in the market... The historic Robotaxi Day on August 8 will pave the way to the golden avenue to fully automatic driving and autonomous future," Ives said.
"The key to reaching a valuation of over $1 trillion is the realization of Tesla's self-driving and fully autonomous driving vision, which seems to be coming true through the latest FSD v12.4 and China FSD tests," he added.
Canaccord Genuity analyst Gregory Francfort also emphasized the importance of self-driving technology in Tesla's growth story. In a report, he called himself and his team "super bulls" on autonomous technology and raised Tesla's price target by $32 to $254.
"Although the system is currently in this state, we believe that autonomous technology is the future," Francfort said. "Our optimism is supported by the potential margin expansion of FSD, energy storage growth, and an increase in expected EPS from $8.55 in 2026 to $9.06."
"We've raised our valuation multiple from about 26 times to about 28 times, reflecting our high confidence in Tesla's growth prospects and additional growth drivers," he added. "Tesla's quarterly earnings report on July 23 is crucial, especially regarding FSD acceptance rates."
CFRA Research analyst Garrett Nelson raised his Tesla price target by $20 to $250 based on yesterday's delivery release, believing that energy storage could be a potential growth driver for the company.
Along with its electric car sales data, Tesla said on Tuesday that it had deployed about 9.4 gigawatt-hours of energy storage products in the three months ending in June, more than twice the 4.1 gigawatt-hours reported in the first three months of this year.
"Although this area is still a small part of the Tesla story, the growth they have been talking about for so long is now starting to manifest itself in numbers," Nelson told CNBC.
In a report he released later on Tuesday, he added: "Musk has successfully shifted investor focus to the long-term opportunities in AI, robotics, energy storage, and other business lines, which means that the impact of the August 8 event on the stock may be greater than yesterday's delivery data or the Q2 financial report on July 23."
The recent trend of Tesla stocks is as follows.
(Image source: finance.yahoo)