What's Going on With Tesla Stock? | TSLA Stock Analysis
Summary
TLDRThis video explores the recent surge in Tesla's stock price from $180 to $260 per share within a month, attributing it to two key factors. Despite a year-over-year decrease in vehicle deliveries, investors reacted positively to a smaller decrease quarter-over-quarter, signaling a potential inflection point. Additionally, European tariffs on Chinese-made cars may benefit Tesla more than its competitors, as it could lessen the impact on them compared to Chinese rivals. However, despite these positive signs, Wall Street's earnings per share expectations for Tesla have declined, indicating that the stock price increase is driven by investor enthusiasm rather than immediate financial performance.
Takeaways
- ๐ Tesla's stock price surged from $180 to $260 per share within a month, indicating a significant rally for the company's shares.
- ๐ The rally was fueled by two major factors: an improvement in vehicle delivery numbers and changes in European tariffs affecting Chinese-made cars.
- ๐ Despite a year-over-year decrease in vehicle deliveries, the second quarter saw a 14.8% increase from the first quarter, which was a positive sign for investors.
- ๐ The change in delivery trend from a significant drop to a smaller decrease indicated an inflection point, which was well-received by the market.
- ๐ ๏ธ Tesla's performance is still strongly tied to its vehicle deliveries, as they are essential for selling software upgrades and expanding its services.
- ๐ The European tariffs on Chinese-made cars could potentially benefit Tesla, as it may impact its Chinese competitors more negatively.
- ๐ฐ Tesla's valuation increase might be due to the expectation that its competitors will be more affected by the tariffs, reducing competition.
- ๐ Wall Street's earnings per share expectations for Tesla have worsened, not improved, reflecting concerns about the company's financial performance.
- ๐ Tesla's stock price increase is not based on current or near-future profits but on investor enthusiasm for its long-term potential in AI and self-driving technology.
- ๐ฎ The market is valuing Tesla based on its future prospects rather than current financials, which is a risky approach as it's speculative.
- ๐ The script contrasts Tesla with Nvidia, which is seeing its value increase due to proven roles in the AI market and expanding revenue, profits, and cash flow.
Q & A
What was the recent significant change in Tesla's stock price?
-Tesla's stock price has jumped from $180 per share to $260 per share in just one month.
What is the role of the sponsor mentioned in the video?
-The sponsor, mle fo, is mentioned for sponsoring the video and promoting their website full.com parev, which lists the 10 best stocks to buy now.
What was the total number of vehicle deliveries reported by Tesla for the latest quarter?
-Tesla reported a total of 443,000 vehicle deliveries for the latest quarter.
How did the year-over-year delivery numbers compare for Tesla in the latest quarter?
-The total number of deliveries fell 4.8% from the previous year, marking the second consecutive quarterly decrease.
Why did investors react positively to Tesla's delivery numbers despite a year-over-year decrease?
-Investors liked the news because the decrease was smaller than the 88.5% drop in the first quarter, indicating an improvement in the trend of declining year-over-year deliveries.
What is the significance of Tesla's vehicle deliveries for its long-term performance?
-Tesla's vehicle deliveries are strongly correlated to its long-term performance as it needs a large fleet of vehicles to sell software upgrades and services like full self-driving and energy solutions.
How do European tariffs on cars made in China potentially benefit Tesla?
-The tariffs could negatively impact Tesla's Chinese competitors more than Tesla itself, potentially reducing competition and benefiting Tesla's market share.
What was Tesla's response to the announcement of higher tariffs on electric vehicles imported from China?
-Tesla announced that it would increase the prices of its Model 3 in Europe from July 1, following the EU's imposition of provisional higher tariffs.
How have Wall Street's earnings per share expectations for Tesla changed recently?
-Earnings per share expectations for Tesla have worsened, with the 2024 EPS forecast dropping from $254 to $2.39.
Why is Tesla's stock price increasing despite lowered earnings expectations?
-Tesla's stock price increase is driven by investor enthusiasm and expectations for future growth in areas like full self-driving, driverless car technology, and robotics, rather than current profits or cash flow.
How does Tesla's stock price movement compare to Nvidia's in terms of market perception?
-While Nvidia's stock price increase is based on proven roles in the AI market with expanding revenue, profit, and cash flow, Tesla's increase is based on potential future developments and investor optimism.
Outlines
๐ Tesla Stock Rally Analysis
The video discusses the significant increase in Tesla's stock price from $180 to $260 per share within a month. The host will explore two key factors behind this rally. As of the recording, Tesla's stock price reached $262 per share. The first factor is the company's quarterly vehicle delivery numbers, which, despite a year-over-year decrease, showed an improvement in the downward trend, leading to a positive market reaction. The second factor is the EU's imposition of higher tariffs on Chinese-made electric vehicles, which could potentially benefit Tesla by impacting its Chinese competitors more severely. The video also touches on Tesla's broader business, including its ventures into energy, robotics, and AI, and how these relate to its vehicle sales and future growth.
๐ Impact of EU Tariffs on Tesla and its Competitors
This section of the script delves into the implications of the EU's new tariffs on electric vehicles manufactured in China, where Tesla has a substantial production presence. The company plans to increase the prices of its Model 3 in Europe in response to the tariffs. The video suggests that Tesla's competitors, particularly those based in China, may be more adversely affected by the tariffs, which could be a net positive for Tesla. Despite the positive news, Wall Street's earnings per share expectations for Tesla have declined, reflecting concerns over the company's year-over-year performance and average selling prices. The video contrasts Tesla's stock price increase, which is driven by investor enthusiasm and future potential, with Nvidia's stock price growth, which is underpinned by proven profitability and cash flow expansion in the AI market.
๐ข Call to Action for Channel Subscription
The final paragraph of the script serves as a call to action for viewers to subscribe to the channel. The host mentions that over 90% of the viewers are not subscribed and encourages them to hit the subscribe button for additional benefits, such as a higher likelihood of their requests being addressed. This paragraph is a direct appeal to engage with the audience and increase the subscriber base of the channel.
Mindmap
Keywords
๐กTesla
๐กStock Price
๐กQuarterly Vehicle Delivery Numbers
๐กYear-Over-Year (YOY)
๐กInflection Point
๐กMarket Share
๐กEV Market
๐กTariffs
๐กFull Self-Driving
๐กForward Price to Earnings (P/E)
๐กInvestor Enthusiasm
Highlights
Tesla's stock price has surged from $180 to $260 per share within a month.
The rally was fueled by two major factors that changed investor sentiment in the last month.
Tesla's stock price reached $262 per share as of the recording, marking a significant increase.
Tesla reported total deliveries of 443,000 in the latest quarter, a decrease year-over-year but an improvement from the previous quarter.
Investors reacted positively to the decrease in the rate of year-over-year delivery decline.
Tesla's inflection point in delivery numbers was seen as a positive sign by investors.
Concerns about Tesla's market share and position in the EV industry were alleviated by the delivery numbers.
Tesla's performance is strongly correlated to vehicle deliveries for potential software upgrades.
Tesla's quarterly car sales are crucial for expanding the vehicle fleet to sell additional services.
European tariffs on Chinese-made cars could impact Tesla, which has a significant manufacturing presence in China.
Tesla's competitors in China might be more negatively impacted by the tariffs, potentially benefiting Tesla.
Tesla's stock price increase is not based on improving profit or cash flow expectations.
Investors are valuing Tesla based on future potential in full self-driving, robotics, and AI, rather than current earnings.
Tesla's forward price-to-earnings ratio is close to 75, indicating high investor enthusiasm.
Tesla's stock price surge is based on expectations of future profitability, not current financials.
Nvidia's stock price increase is tied to proven roles and financial growth in the AI market, unlike Tesla's future-oriented valuation.
Over 90% of viewers are not subscribed, and subscribing supports the channel with more content and subscriber requests.
Transcripts
hey everyone Tesla's stock price has
been on an absolute tear jumping from
$180 per share to $260 per share in as
little as one month so what's going on
with Tesla stock that's what I'm going
to dive into in this video I'm going to
highlight two major factors that changed
in the last month that have created this
rally for Tesla stock and Tesla stock
investors so let's take a look I want to
thank the mle fo for sponsor ing this
video visit full.com parev for the 10
best stocks to buy now so Tesla stock
price up to
$262 per share as of this recording
that's up significantly from a little
less than $180 per share one month ago
that rally gained momentum following
July 1st when the company updated
investors with its quarterly vehicle
delivery numbers Tesla reported total
deliveries of
443,000 the latest quarter with
production of just 410,000
overy year and the answer is yes it was
a decrease year over-year the second
consecutive quarterly decrease for Tesla
let me share with you why investors
still liked the news so the reason
investors liked the news from Tesla is
that the total number of deliveries in
the second quarter fell 4.8% from a year
earlier but it was an increase of
14.8% from the first quarter what's more
the number in the first quarter was an
88.5% drop in deliveries so Tesla went
from an 8.5% decrease to a smaller
decrease which ended several consecutive
quarters of Tesla's declining
year-over-year deliveries and so that
trend of worsening worsening worsening
improved and so that change in direction
that inflection point was really great
news for investors because they were
concerned that Tesla's deliver were just
keep on declining as the EV Market
became more competitive as the Chinese
competitors launched newer models at
lower prices and really expanded Supply
and then newer models in the US are
causing Tesla to lose market share
investors were concerned about Tesla's
market share and Tesla's position in the
EV industry after it pioneered that
industry so that change in inflection
was a big positive for Tesla stock
investors now I know what you're going
to say Tesla is not just an EV company
Tesla is an energy company EVS Tech
robotics artificial intelligence
Etc still
Tesla's quarterly performance and
long-term performance is strongly
correlated to how many vehicles it
delivers if it wants to sell driverless
technology or for full self-driving it
needs to have vehicles out there the
more Vehicles out there in circulation
the more potential to sell software
upgrades to those Vehicles so if it's
losing market share now that means a
smaller base of cars where Tesla can
sell software upgrades and remember most
of Tesla's competitors are also
investing in the same type of Technology
upgrades that Tesla is investing in and
if Tesla's losing market share to these
Rivals right now that's going to give
the rivals more profit more cash flow to
invest in these latest Technologies and
potentially catch up or leap ahead of
Tesla so quarterly unit Car Sales is
still a big deal for Tesla and Tesla
stock investors as much as they would
like to believe that quarterly Car Sales
don't matter anymore that Tesla's now a
artificial intelligence company that the
only thing that matters is investments
in Ai and driverless car technology that
is only partly true that will drive
growth in the long run for Tesla stock
investors but it still needs to sustain
quarterly delivery numbers in order to
expand the vehicle Fleet so that they
can sell those incremental services like
full self-driving like energy Etc all
right the second big thing that has
changed for Tesla is that Europe
announced tariffs on cars made in China
and of course Tesla has a strong
manufacturing presence in China It
produced nearly 1 million of its
vehicles in China in
2023 and so it's a big player in that
market and it will be impacted by these
European tariffs now Tesla said that it
will increase prices of its model 3 in
Europe from July 1 after the EU said
that it could impose provisional higher
tariffs on electric vehicles imported
from China so that was another step in
working the valuation for Tesla now you
might say why did Tesla's value why
would Tesla's value increase as a result
of this it could be more likely that
Tesla's competitors in China will be
impacted more negatively from these
tariffs compared to Tesla and so that's
why they were hurt more significantly
than Tesla and so because they're going
to be hurt more than Tesla overall it's
a net positive for Tesla because
competition is one of the bigger reasons
why Tesla's valuation has been down or
was down in 2024 before this latest
rally so this was good news for Tesla in
that it will hurt its competition and
its main competition is coming out of
China
those are the models that are lower
priced and similarly speced and gaining
significant Traction in China and so
slowing that down will be a big benefit
for Tesla and Tesla stock investors
surprisingly despite this news about
Tesla's better prospects the Wall Street
earnings per share expectations for
Tesla in the current year and next year
have not improved in fact they've
worsened so 30 days ago analyst on Wall
Street were expecting Tesla to deliver
$254 in EPS in 2024 that's now down to
$2.39 for next year it's down from
$337 down to
$39 so the company's earnings
expectations are worse and that's
understandable because year-over-year
it's still delivering lower Revenue
lower delivery numbers and these
delivery numbers are coming with lower
average selling prices than last year so
it's understandable that Tesla's
earnings this year and next year are
down
but that doesn't fully explain Tesla's
stock price right Tesla stock price is
soaring and Tesla doesn't trade like the
normal stock which looks at profit and
earnings and cash flow Tesla investors
believe that in the future it's going to
have full self-driving driverless car
technology robots and it's going to have
all of these extra profit engines that
are going to drive an exponential
increase in profitability and so they're
willing to pay premium valuations for
Tesla stock it's now trading at a
forward price to earnings of close to 75
so this increase in Tesla's stock price
is not coming on the back of increasing
profit expectations or increasing cash
flow expectations it's just coming on
the back of investor enthusiasm for
Tesla stock and that's always a
dangerous thing it's the opposite of
what's happening with Nvidia nvidia's
value nvidia's price is increasing
because it's increasing profits
increasing cash flow that's not
happening with Tesla Tesla stock price
is increasing ahead of potential revenue
and profit and cash flow expectations of
something way down in the future
something it hasn't yet fully
implemented and it doesn't generate
significant sums of revenue from from
that Source that's creating the
valuation right now so the source of
Tesla's valuation right now is something
that it's going to do several years into
the future and it hasn't yet proven on
that it hasn't yet delivered on those
expectations it's given hints it's given
little signs that it is heading towards
there but not to any degree remotely to
what Nvidia has proven right I'm just
comparing the two because those are two
very popular stocks in the market right
now with two kind of opposite scenarios
where Nvidia has already proven its
substantial role in the AI Market with
Revenue profit and cash flow expansion
where Tesla has only hinted at what it
could do in that category several years
in the future did you know that over 90%
of the people that watch my channel are
not subscribed it'll really help support
my channel if you hit that subscribe
button and oh by the way one of the
benefits of being subscribed is that I
take requests from subscribers more
often than I do from non-subscribers so
if you prefer that benefit please
subscribe to the channel
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