The Phenomenal Rise Of Tesla Stock Explained And What The Future Might Hold

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The stellar performance of Tesla(TSLA) this year has reached all ears. 2020 brought with itself this massive pandemic, where most of the companies are struggling to fight bankruptcy. On the other hand, the shares in Elon Musk’s creation have reached sky-high values.

The shares have increased by more than 300 percent, hitting an all-time high of nearly $1,800 on July 13. After a small pause, they’ve added more than $500, or 36%, to the stock price. Tesla shares continued their upward climb, closing up $123 or 6.6% at $2,001.83 in August. Tesla is now worth more than two grand a share against all negative predictions.

At the current share price, Tesla holds a market value of around $300bn. This makes Tesla ten times more valuable than Ford. It surpassed Toyota as the world’s most valuable car manufacturer, that too, despite selling fewer cars.

The latest Tesla performance report beat all the analyst estimates. What is a day trader wondering every day is – how high can Tesla stock reach? With Tesla capturing all the financial headlines by storm, the question is how it managed to achieve this height in the pandemic?

To answer that and many other blanket questions, let us go through all the details to get a better insight into Tesla stock. We will review the company’s shares performance, analyze the key drivers, and discover the apparent future of TSLA stock for 2020 and ahead.

Rise Of Tesla Stock Explained

The company’s stock started 2020 with a low of $430 per share, falling further down to $361 in March during the panic sell-off caused in the market by the pandemic. However, what happened next came as a surprise to all analysts and investors around the globe.

With the SpaceX launching a Tesla Roadster into space, the Tesla stock prices have also increased with rocket speed. Following the sell-off, the company’s shares were already changing hands at $427.64 in March, gaining upside momentum and soaring in value quickly.

Tesla’s second-quarter earnings reports made investors call for a massive celebration. Tesla earned $2.18 per share on revenue of $6.04 billion. This rise was seen despite Tesla’s main manufacturing plant shutting down in Fremont, Calif., for six weeks during that quarter. This decision came in the backdrop of lockdown as the coronavirus was in full swing.

Tesla shares more than doubled since July 1, 2020. The stock hit its all-time high of $1,795 per share in July, representing a booming hike of over 300 percent from the start of the year. At this price, shares went up by almost 66 percent in July itself. Tesla stock is rising fast because there are more buyers than sellers in the market.

Investors have bet the company’s inclusion in the S&P 500 could mean a huge jump in demand. Besides, Tesla stock got another push since August as it declared the 5 for 1 stock split. The stock splits typically work in the 2-for-1 and 3-for-2 variety, this new stock split might create a significant difference. The Trading began on a stock split model from August 31.

Upcoming Plans Of Tesla

Tesla is now planning to work on the full production of its Model 3 and Model Y. Also, Tesla is installing additional machinery at the Fremont factory where it might be able to produce more than 500,000 units of this model per year.

After receiving a strong reception in China for Model 3, Tesla planned to make the Model 3 at its factory in Shanghai. Also, it is planning the expansion process to build plants in Berlin, and Austin, Texas. Plans are to start deliveries of these vehicles from both locations in 2021. In addition to this, deliveries of its big truck – Semi will also begin in 2021.

Very soon in the coming days, Tesla is set to crossover its rivals, securing the top position in the electric car market. It’s possible that the electric vehicle market shows off for a decade and showers its shareholders with great dividends and buybacks. In case it falls short of the current investor expectation, you can expect some pullback in the near future.

Based on the Tesla share price prediction by Wallet Investor, the stock is expected to reach $2500 per share by the end of 2020. The stock analysts also suggest the share price would keep increasing in 2021 and 2023. The shares hit an all-time high in September, which further is strengthening these predictions.

Future Of Tesla Stock

Over the last month, almost 200,000 new investors have purchased the Tesla shares on electronic brokerage Robinhood, whose users incline toward the young demographic. According to CNN Business, 29 analysts offering 12-month price forecasts for Tesla predicted a wide range as low as $300 per share to as high as $2,400 per share.

Wall Street analysts’ views on the company’s future valuations have varied widely in the past few months. In reality, it’s incredibly hard to provide a solid long-term prediction for the Tesla share. The market has become very unpredictable amid the pandemic. You will find mixed opinions, with some bullish while others are calling it a dangerous bubble.

Even though the company is growing at an extremely rapid pace and is attracting a lot of potential investors’ attention, many analysts still argue whether Tesla will be able to survive the market’s high expectations.

Just like the basic market rule, investing in Tesla shares gives no guaranteed financial success. Long term investments might prove a bigger margin with Tesla. But if you think you are not ready to make long-term investment commitments, but still desire to give a shot to make a profit from the price volatility, you should analyze your success and profit margin thoroughly.

Before you enter the real market with any stocks, it’s always better to undergo free stock trading practice to polish your analysis. No matter whether an analyst holds a positive or negative view of the stock’s future, you can still try to profit from the stock’s fluctuations.

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