Tesla shares surge again, extending monstrous 40% rally over the past month

Tesla (TSLA) shares rose 2% on Friday as the stock extended its winning streak for the eighth straight session and erased year-to-date losses.

After rallying 37% in the past eight sessions — and up 43% in the past month — the stock is now in positive territory for 2024, completing a remarkably quick turnaround. The stock had fallen as much as 40% year-to-date through mid-April.

The S&P 500 is up a modest 4% over the past month.

Tesla’s continued rally comes after the automaker reported better quarterly deliveries earlier this week.

In addition to these production and delivery results, Tesla optimists also highlighted the company’s fastest-growing division: its energy storage business.

“Tesla got its Independence Day celebrations off to an early start with positive second-quarter deliveries, a 33,000 inventory drop and a big markup to remind investors it’s not just a car company,” Morgan Stanley’s Adam Jonas wrote in a recent note.

Another positive catalyst came after the Chinese provincial government released its purchase list, which also included locally built Tesla cars, on Thursday.

According to Reuters, Tesla’s Model Y vehicle has been listed for Jiangsu province in eastern China, meaning government employees are allowed to purchase the vehicle as a service vehicle.

HANGZHOU, CHINA - AUGUST 14, 2023 - Customers buy electric cars at a Tesla store in Hangzhou, east China's Zhejiang province, August 14, 2023. On the same day, Tesla announced that it had lowered the price of its two high-end Model Y models in the Chinese market, reducing the price of each car by $1,900 (about 14,000 yuan). The company also announced a temporary insurance subsidy of 8,000 yuan for existing Model 3 car orders. (Photo credits should be CFOTO/Future Publishing via Getty Images)HANGZHOU, CHINA - AUGUST 14, 2023 - Customers buy electric cars at a Tesla store in Hangzhou, east China's Zhejiang province, August 14, 2023. On the same day, Tesla announced that it had lowered the price of its two high-end Model Y models in the Chinese market, reducing the price of each car by $1,900 (about 14,000 yuan). The company also announced a temporary insurance subsidy of 8,000 yuan for existing Model 3 car orders. (Photo credits should be CFOTO/Future Publishing via Getty Images)

Customers buy electric cars at a Tesla store in Hangzhou, east China’s Zhejiang province, August 14, 2023. (CFOTO/Future Publishing via Getty Images) (Future publication via Getty Images)

Tesla is facing stiff competition from its Chinese counterparts abroad and slowing demand for electric vehicles in the U.S. In an effort to cut costs, the company earlier this year began a plan to cut more than 10% of its global workforce, which some analysts saw as a sign of tough times ahead.

The company also cut prices last year to boost sales.

At Tesla’s shareholder meeting last month, CEO Elon Musk confirmed that demand and sales will still be tough in the near term as the industry is in a transition period.

“There is still the risk of further price cuts in the future, and there is still a risk that prices will fall.” [are] “There are still questions about fundamentals, we’re still sort of in the EV winter on demand,” Barclays senior equity research analyst Dan Levy told Yahoo Finance earlier this week. “So, good outcome. But I think the fundamental macro backdrop is still the same.” Levy has an Equal Weight rating on the stock and a $180 price target.

Tesla is set to report its quarterly results on July 23 after the market closes. Analysts are also looking ahead to August 8, when the company will unveil its long-awaited robotaxi.

“The key for Tesla stock is that Wall Street recognizes that Tesla is the most undervalued AI player in the market,” Wedbush CEO Dan Ives wrote in a note this week, raising his price target on the stock to $300 from $275, with a new bullish scenario of $400 for 2025.

Ives added that the company’s robotaxi event on August 8 will “push the yellow brick road to [full self-driving] and an autonomous future.”

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X on @ines_ferre.

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