The S&P 500 entered a new bull market last week.
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But the gains during this year’s run higher have been led by the tech-heavy Nasdaq and investor hyper for artificial intelligence plays. And now, electric vehicle stocks have joined the AI-led mania as the market continues its rally as we near the end of the month, the quarter, and the first half of the year.
Tesla (TSLA), which has seen its market cap move back over $800 billion, has seen its stock more than double this year and gain over 10% in just the last four days. Through Tuesday’s close the stock had finished higher during 13 straight trading sessions.
Tesla stock was down about 0.1% on Wednesday afternoon.
In recent days, smaller EV rivals have seen ever larger stock moves as the AI-led market rally has spread into other areas of the next-gen tech trade.
“The market wants to believe Tesla is an AI name first, an auto company second,” Morgan Stanley analyst Adam Jonas wrote in a note to investors earlier this month.
Tesla has also been buoyed by recently announced electric-charging tie-ups with legacy automakers General Motors (GM) and Ford (F). These stocks have also gained more than 5% in recent days, a notable move for the typically more staid legacy automaker names.
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Tesla vehicles charge at a station in Emeryville, Calif., Aug. 10, 2022. (AP Photo/Godofredo A. Vásquez, File)
Expectations the Federal Reserve will pause its aggressive rate hikes on the heels of cooling inflation data has also helped fuel the EV rally as part of a broader risk-on trade.
Chinese EV maker XPeng (XPEV) has seen its stock rise more than 25% over the last four days while shares of rival Nio (NIO) are trading about 14% during the same period. On Tuesday, China’s central bank announced a cut to its short term borrowing rate in an effort to boost its economy.
Even more speculative names like Nikola (NKLA) have gained in recent days. Share of the battery- and hydrogen-powered electric truck maker extended gains for a sixth consecutive session on Wednesday, rising more than 20% at one point. Over the past four days the stock is up roughly 70%.
Nikola shares have doubled in price since hitting an all time low of $0.52/share on June 6. Last month the Nasdaq told the company its shares were at risk of delisting after closing below $1 each for more than 30 consecutive business days.
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Tesla, XPeng, Nio, Nikola are all up for the week amid a broader EV rally.
Ines is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre
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