© Reuters. As Tesla Stock Hits 1-Month High, Analyst Lists 6 Key Catalysts That Drove This Week’s Rally
Benzinga – Tesla, Inc. (NASDAQ:TSLA) shares rallied 7% for the week and breached the $180 level for the first time in a month.
What Happened: Future Fund‘s Gary Black weighed in on the change of sentiment toward the stock and the reasons thereof.
Among the upside catalysts are:
- CEO Elon Musk‘s view that auto gross margin will likely bottom in the second quarter.
- Likelihood of Musk shifting his focus on Tesla with Linda Yaccarino assuming the role of CEO at Twitter.
- Two next-gen vehicles, potentially priced at $25,000 to $30,000, rolling out by late 2024, with the demand potential at about five million units.
- Cybertruck on track for commercial launch by the fourth quarter, with a unit potential of over 250,000 in 2024.
- Tesla hinting at advertising on a small scale, which will likely accelerate EV adoption without having to rely on price cuts.
- Investors’ view Tesla is the next artificial intelligence play, with the total addressable market opportunity for the Optimus bot likely at $5 trillion to $10 trillion, based on the forecast of 5,000 to 10,000 units.
Why It’s Important: Tesla stock has been locked in a lackluster range amid worries concerning a lack of volume lift despite the multiple, aggressive price cuts. Investors were also concerned about the impact the price cuts can have on margins.
The first-quarter results released in April proved that these fears were not ill-founded. Core margin, which is auto gross margin, excluding regulatory credits, fell below the 20% threshold during the quarter.
The commentary from Musk at the annual shareholder meeting held this week should instill confidence in the company’s fundamentals and forward outlook. This in turn could prove healthy for the stock.
Price Action: Tesla settled Friday’s session 1.84% higher at $180.14, according to Benzinga Pro data.
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