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Tesla’s chain of charging stations helped crystallize the idea that the company is more than just a car manufacturer.
Joel Saget/AFP via Getty Images
Tesla
began tweeting from an official Twitter account devoted to artificial intelligence on Wednesday, one designed to highlight how the electric vehicle maker’s AI efforts can help the company in the future. future. It’s also a reason to sell stocks.
Tesla shares have skyrocketed this year, but they’re also volatile. The stock has ranged from about $102 to $315 over the past year. The $213 gap is 100% above the average closing price for that period. Same calculation for
Apple
(AAPL) yields about 40% of the average price
With Tesla, it’s often easier or easier to see why a stock is going up or down. However, it is not always simple to understand why it moves so much for the given reason. Consider a recent run. Starting trading on Thursday, Tesla stock is up about 42% since May 25. Two things happened that day. Firstly,
Nvidia
(NVDA) surged 24% after reporting its AI-related business is performing much better than anyone anticipated. Then Tesla and
Ford Motor
(F) publish an authorization agreement Ford drivers use Tesla charging stations.
Both events, like new @Tesla_AI Twitter account, crystallizes the idea that Tesla isn’t just a car company, but the key to Tesla’s valuation. After all, Tesla is worth about three Toyota Motors (TMs), despite selling a fraction of the cars. In addition to electric cars, Elon Musk’s car company also owns its own dealership, has a chain of charging stations, offers AI-developed software to help cars drive itself, and sells solar roofs and storage products. utility-scale batteries and even auto insurance.
Given Nvidia’s 40% gain since the quarterly report, the excitement over AI could be to blame for most of Tesla’s profits. That makes sense, but has limits. Tesla stock now trades for about 77 times estimated 2023 earnings, up from 25 times when Barron’s wrote positively about the stock earlier this year. Simply put, the frenzy of AI has made stock prices a little more expensive for our tastes.
Wall Street is starting to see things our way. Tesla’s recent activity has spurred downgrade twice from analysts over the past two days. Both Morgan Stanley and Barclays take their ratings as Balanced from Overweight. Both brokers cite AI-related hype that has inflated the value of the stock.
There are still auto-related factors to worry about, namely Tesla’s second-quarter sales, which are expected to be reported in early July. Wall Street expects about 445,000 vehicles to be shipped in the three months ending June 30, a record and up from about 423,000 vehicles sold in the first quarter. If Tesla can beat those forecasts, the stock could rise further. She, and watch out.
That makes this the best time to sell some Tesla. Barron’s recommend to buy stocks on January 6, shortly after it closed at $113.06. On Wednesday, the stock closed at $259.46, up nearly 130% from the pick. We do not give up shares. Just use volatility, hopefully, to our advantage. We also don’t worry about giving up a bit of profit. After all, when a stock doubles, an investor can sell half of their shares and keep the value of the original position, with some profits deposited in the bank if things go wrong. horizontal.
With a stock like Tesla, we consider it a win-win.
