Tesla’s Strong Week: Stock Performance and Market Drivers

Tesla stock saw significant gains. It rose 13% over five days. The weekly increase was 10.2%. This outperformance stood out. Many other stocks struggled. Apple, Amazon, and Meta all faced turbulence. Visa, Mastercard, and banking stocks also wavered.

However, some sectors thrived. Pharmaceuticals, like Eli Lilly, performed well. Oracle and Palantir also saw good gains. Oracle, in particular, rose sharply. Energy stocks had a strong week too.

Weekly Performance

Tesla’s Price Action and Technicals

Last week, Tesla faced a dip. A spat between Trump and Musk hurt shares. Prices dropped to the $270 range. This week brought a rebound. The stock climbed back up. It nearly reached $333. Then, a slight pullback occurred.

The stock surpassed key averages. It crossed the 5-day average of $321. The 15-day average of $324 was also exceeded. This signals renewed momentum. The RSI (Relative Strength Index) recovered. It was overheated at $367 previously. The Trump-Musk dispute cooled it down. RSI dropped near 30. It did not hit oversold levels. Now, it’s rebounded to 52. This is right in the middle. The future direction is uncertain. It could converge or diverge.

The average holding price is $302. Many investors hold Tesla shares. Their cost basis is between $302 and $360. Some are underwater above $325. High volume, at 130 million shares, is encouraging.

Short Seller Activity and Financial Metrics

Short interest fluctuated. Shorts increased as prices rose. It dipped when Tesla was at $270. It climbed to 64% over $330. Then, it decreased again. Currently, it’s at 57%. Overall, short interest hovers around 3%.

Tesla’s P/E ratio is high. It stands at 178. The forward P/E is 110. This is based on next year’s projections. Continued 52% annual growth could lower it. However, the P/E remains elevated. The beta is 2.45. This indicates higher risk. Current RSI is 52. ATR (Average True Range) is $19. This means weekly volatility is $19.

Elon Musk and Political Dynamics

Elon Musk made concessions. He softened his stance on Trump. He deleted critical X posts. These included tax bill comments. Epstein-related tweets were also removed. Calls for Trump’s impeachment vanished too.

Musk extended an olive branch. He also had a phone call. The New York Times reported it. Following the call, Musk expressed regret. He regretted criticizing Trump on social media. Trump’s response was mild. He wished Musk “very well.” Musk initiated the reconciliation. This helped stabilize the stock.

Despite this, Trump made announcements. He spoke about electric vehicles. He expressed love for EVs, including Tesla. Yet, he emphasized fairness. He also supports combustion engine cars. Trump proposed higher auto tariffs. He wants a 25% increase. This impacts Tesla, too, which was expected.

These tariffs were expected. They were part of his campaign. A surprise came from California. Trump aims to repeal its EV mandate. California seeks all EVs by 2035. This would be a federal action.

Tesla generates significant revenue. It earns from EV credits. These come from Europe and California. They make up 52% of its revenue. Trump’s action could affect this. The stock saw some impact.

Positive Catalysts and Global Sales

The stock recovered on Thursday. It had dropped to $31 during pre-market. Geopolitical tensions contributed. News of Iran-Israel conflict emerged. The stock rebounded from its 5-day average.

A key reason was regulatory. NHTSA’s new rule passed. It expedites approval for AVs. Cars without steering wheels qualify. Cars without pedals also qualify. This is like Tesla’s robotaxis. Many suspect an implicit agreement. This came during the Trump-Musk call. This rule boosted the stock.

Robotaxis are already testing. Austin, Texas, has them now. Model Y Junipers are used. Musk stated 10-20 are operating. The federal rule helps expansion. This includes LA and San Francisco. Broader approvals are now easier. This positive news helped the stock rebound.

Austin’s ride-share service is approved. Testing is ongoing there. The June 22nd launch is awaited. It’s unclear if a full launch happens. This anticipation keeps the stock stable. It may prevent large fluctuations.

New Models and Energy Business Expansion

New models also arrived. Model S, Model Y, and Model X refreshed. This improved Tesla’s market sentiment.

Energy is a growing segment. Tesla’s revenue hit $19.3 billion. Energy contributed $2.7 billion. This is over 10% of total revenue. It grew 67% year-over-year. Megapack production is soaring. Lathrop factory passed 15,000 units. Shanghai factory also opened. Each Megapack sells for $100K-$200K. Sales are strong, contributing to revenue.

Optimis and Core Auto Business

Tesla’s Optimus is coming. Humanoid robots are hot this year. Figure 2 and Atlas compete. Unitree from China is also a player.

Tesla sued a former engineer. He allegedly stole hand technology. This led to “Perception” startup. This highlights Tesla’s advanced tech. The hand technology is crucial. It enables diverse household tasks. Cleaning and dishwashing are examples. Optimus can now grasp tennis balls.

Automotive remains core. Tesla sold $14 billion in cars. Regulatory credits brought $600 million. This rose 35% year-over-year. The hope is to thrive without credits. Net automotive sales were $12.9 billion. This is down 21% year-over-year.

Sales by Region and Analyst Outlook

Upcoming sales data is critical. July 2nd for vehicle deliveries. July 20th for earnings.

China sales are performing well. Weekly sales usually exceed 13,000 units. Last week saw 8,600 due to Dragon Boat Festival. Tuesday’s delivery report is key. Over 13,000 would be positive. Cumulative sales hit 80,000 units this quarter.

China is a crucial market. US and Europe sales declined. China’s performance is a relief. Model Y leads in China. It outsold BYD in May. Australia also saw strong Model Y sales. 3,580 units were sold there. Kia EV5 trailed with 703 units. Geely and BYD followed. Model 3 sold 317 units. Model Y sales are robust. This is due to the new model. South Korea, Australia, Turkey, and Hong Kong also perform well. July 2nd deliveries are highly anticipated.

Analyst Price Targets and Macroeconomic Factors

Tesla’s average target is $293. This is often seen as fair value. Dan Ives of Wedbush has a $500 target. Some targets are as low as $19. Piper Sandler’s Alex Potter reiterated $400. This “Buy” rating helped stock.

Baird downgraded to “Neutral.” They set a $320 target. Their reason was robotaxi reflection. They also cited Musk-Trump uncertainty. They believe Musk will focus on Tesla now. Less political involvement is expected.

Morgan Stanley’s Adam Jonas holds $410. Goldman Sachs lowered its target. It dropped from $295 to $285. Mizuho has a $390 target. Optimistic analysts foresee over $400. They focus on robotaxi and software. Neutral views are $285-$320. Some are even lower.

This week should be quieter for Tesla. This is until the robotaxi launch.

Geopolitical tension persists. Iran and Israel exchanged missiles. Israel initiated the attack. Iran retaliated with missiles. Damages occurred on both sides. Resolution is crucial.

The Federal Reserve meets this week. They will announce interest rates. A rate hold is expected. Economic projections (SEP) will be key. Powell’s comments will be watched. Macroeconomic factors will drive the market.

Disclaimer: This content is for informational purposes only and does not constitute financial advice. Consult a qualified financial advisor before making investment decisions.