Tesla’s stock experienced a notable surge, increasing by 5% and reaching its highest close since late July.
This uptick on Monday comes as October is poised to be a pivotal month for the electric vehicle manufacturer, with significant events lined up, including the much-anticipated Q3 earnings release.
The renewed optimism surrounding Tesla’s stock follows a challenging year for the company. Analysts attribute part of this shift to heightened interest in Tesla’s artificial intelligence initiatives and excitement about the upcoming “robotaxi day” on October 10. At this event, Tesla is expected to showcase updates on its “full self-driving” software and demonstrate its planned autonomous “cyber-cab.”
To maintain profitability, Tesla must successfully sell vehicles equipped with its software. Barclays analyst Dan Levy forecasts that the company will deliver approximately 470,000 vehicles in the third quarter, representing an 8% increase compared to the same period last year and exceeding Wall Street expectations of around 460,000. This marks a welcome turnaround from the previous quarter, which saw a 5% year-over-year decline in deliveries, despite initially beating estimates.
Investor sentiment has fluctuated in recent months, particularly after a disappointing earnings call earlier this year led to a 12% drop in stock value—the largest single-day decline since 2021. Many analysts expressed disappointment over the lack of detailed discussions on revenue and profit margins during that call, instead receiving a long-term vision focused on next-generation electric vehicles and AI investments.
Despite these challenges, Tesla’s stock is currently trading close to $250, recovering from a low of $182 in early August and remaining significantly below its 52-week high of $271. The stock’s performance still trails behind the S&P 500’s 21% year-to-date gains, raising concerns among some analysts, including Shawn Tully of Fortune, about the company’s valuation.
The backdrop of rising tensions between the US and China adds further complexity to Tesla’s situation. The Biden administration recently announced plans to propose a ban on Chinese-developed software in internet-connected vehicles, following earlier tariffs on Chinese electric vehicles. While Tesla benefits from its operations in both markets, it could be impacted by deteriorating trade relations.
This year has also seen reports indicating a decline in Tesla’s market share in the US, China, and Europe. However, Levy’s analysis suggests that increased deliveries in China this quarter may offset some of the weaknesses in the European market.
Looking forward, the upcoming robotaxi day and Q3 earnings report are seen as crucial moments for Tesla, with analysts split on their potential impact. While some analysts, like Dan Ives from Wedbush Securities, maintain a bullish outlook, others, like Morgan Stanley’s Adam Jonas, express skepticism about whether the event will meet investor expectations.
The robotaxi day is expected to highlight Tesla’s advancements in autonomous driving technology, an area that CEO Elon Musk has emphasized as a key reason for holding the stock. The event will be held at Warner Bros. Studios in Burbank, California, and will feature the latest developments in Tesla’s Full Self-Driving technology.
Fortune, Forbes, and Market Watch contributed to this report.
