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Tesla, Inc. (TSLA), headquartered in Austin, Texas, designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems. With a market cap of $1.1 trillion, the company owns its sales and service network and sells electric power train components to other automobile manufacturers.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and TSLA definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the auto manufacturers industry. Tesla's competitive edge is fueled by its strong brand, technological innovation, and established manufacturing capabilities. A potential U.S. regulatory standardization for robotaxis could play to Tesla's advantage, as its AI-driven approach requires less infrastructure preparation. This could accelerate Tesla's robotaxi rollout, providing a significant first-mover advantage and further solidifying its industry lead.
Despite its notable strength, Tesla slipped 2.9% from its 52-week high of $361.93, achieved on Nov. 25. Over the past three months, TSLA stock gained 66.9%, outperforming the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 21.4% gains during the same time frame.
In the longer term, shares of Tesla rose 41.4% on a YTD basis and climbed 47.1% over the past 52 weeks, outperforming XLY’s YTD gains of 25.3% and 31% returns over the last year.
Tesla has traded above its 50-day moving average since late October. The stock has been trading above its 200-day moving average since mid-August.
Tesla's strong performance can be attributed to its leadership in electric vehicles (EVs) and energy solutions, as well as CEO Elon Musk's influential presence in the tech and business world. Musk's close relationship with President Trump has also fueled investor optimism, leading to a surge in Tesla's stock price post-election. Additionally, Trump's policies, including a tough stance on China and support for autonomous vehicles, could benefit Tesla's market position in the U.S. Overall, Tesla's continued growth and production capacity make it well-positioned for long-term success.
On Oct. 23, TSLA shares closed down more than 1% after reporting its Q3 results. Its revenue stood at $25.2 billion, up 7.8% year over year. The company’s adjusted EPS increased 9.1% year over year to $0.72.
Tesla’s rival, NIO Inc. (NIO), has had a rough ride. NIO's shares plummeted 48.8% in 2024 alone and a staggering 35.1% over the past 52 weeks.
Wall Street analysts are cautious on Tesla’s prospects. The stock has a consensus “Hold” rating from the 38 analysts covering it. While TSLA currently trades above its mean price target of $229.59, the Street-high price target of $400 suggests an upside potential of 13.8%.
