Tesla's stock price speeds toward $1,000 a share
Tesla is leaving Wall Street naysayers — and other U.S. automakers — in the proverbial dust. Shares of the electric car maker zoomed higher on Tuesday, continuing an epic rise that has seen the company's stock market value more than double in just over a month.
How epic? The surge has lifted Tesla's market capitalization to $167 billion — just shy of the combined value of Ford, General Motors and Volkswagen. Only Toyota, worth $201 billion, is more highly valued by investors.
Continuing their ascent, Tesla shares leaped more than 20% on Tuesday to $940.13 and are up 45% over the first two days of trading this week. The stock has risen in 15 out of 22 trading days this year, lifted by a slew of positive news, including Tesla's opening of its factory in Shanghai and strong quarterly results.
Shares fell in the final moments of trading Tuesday to about $887, still up nearly 14% for the day.
Tesla has ramped up expected shipments of its Model Y SUV, which is set to roll out later this year, while the company says it will deliver at least 35% more vehicles in 2020 than last year.
Tesla's explosive market gains — especially in peeling away from auto industry rivals — suggests investors increasingly view the company less as a car maker than as a technology company, according to Gene Munster of venture capital firm Loup Ventures.
"We believe there's merit to that view and the company's valuation should be viewed in that context," Munster said Tuesday in a blog post.
Analysts also chalk up the Tesla's blistering rise to investors who had bet against the stock now scrambling to cover their positions. Before markets opened on Tuesday, such "short sellers" — who make money when a company's shares fall — were down more than $8 billion this year on their pessimistic trade, according to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.
More broadly, Tesla is benefiting from a growing conviction on Wall Street the company is ahead of the curve when it comes to the future of transportation.
"Coming out of earnings, we continue to hear from investors on both sides of the bull/bear debate around this parabolic move in Tesla shares since the beginning of year and have continued to accelerate post quarter," Wedbush analyst Dan Ives told investors in a note. He expects Tesla shares to soon top $1,000, citing Tesla's ability to ramp up production and growing demand in China.
Tesla is also reaping the benefits of its nearly 10-year head start in electric vehicles, as other automakers under-invested in the space, noted Munster, who added: "We continue to expect shares to be volatile in the years ahead but, ultimately, trend higher given the company's pole position in undeniable truths related to electrification and autonomy."