Tesla stock has been on a wild green run for the past month. The electric vehicle leaders continue to beat their record win streak with 13 consecutive days of gains so far.
Over the past week, the stock jumped more than 15%; Tesla shares are up more than 40% for the past month and more than 110% for the year.
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Why Tesla Is Doing So Well
Though only one group has any reason to be upset about the recent gains catapulting Tesla’s stock — Tesla shorts have lost more than $12 billion in mark-to-market losses for the year — the reasons behind the surge are multi-faceted.
It is certainly no coincidence that the surge came amid news of partnerships between two of the biggest legacy carmakers — Ford and General Motors — and (TSLA) – Get Free Report.
Ford (F) – Get Free Report announced May 25 that it would be partnering with Tesla to bring its customers access to Tesla’s supercharging network. Not long after, (GM) – Get Free Report — in a Twitter Spaces conversation between Elon Musk and GM CEO Mary Barra — announced that it was following Ford’s example.
Some analysts at the time said that, though Tesla will pick up some revenue from the charging infrastructure, the move was largely better for its competitors than Tesla itself.
“They are giving the rails to these competitors which have been struggling,” Deepwater Management analyst Gene Munster said. “I think ultimately what Elon is doing here is he’s making good on his promise that he wants to advance electrification.”
Another thing getting investors excited about the EV makers is that, on June 7, Tesla Model 3 vehicles officially qualified for the $7,500 EV tax credit, suddenly making Teslas much more affordable.
At the same time, more news about the much-anticipated Cybertruck has surfaced; after earlier predictions that it would make around 250,000 units per year, Tesla has said that it will be aiming to produce around 375,000 per year.
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The Cybertruck is set to be available by the end of August.
Possibly playing a part in Tesla’s recent success story is the fact that, starting June 5, Elon Musk stepped down as the CEO of Twitter, handing the role off to Linda Yaccarino.
Where Is Tesla Headed?
Whether this explosive growth can continue might come down to whether investors view Tesla as an AI company or a car company.
Cathie Wood, CEO and investment lead of Ark Invest, has long been bullish on Tesla. Wood said recently that Tesla is the “most obvious beneficiary of the recent breakthroughs in AI.”
She thinks the car company is poised to see up to $10 trillion in revenue by 2030 from a quickly surging autonomous taxi business.
Wood is not alone in her position of Tesla as an AI-first company; KGI Securities Analyst Jennifer Liang, giving Tesla a price target of $335, said the company’s work in AI is underappreciated.
Morgan Stanley analyst Adam Jonas, however, said in a recent note that the market is trying to view Tesla as an AI company first, and a carmaker second.
“More than an ‘AI Play,” we believe Tesla’s role in building a de-risked EV supply chain is underappreciated by the market,” Jonas wrote.