Shares of Tesla (TSLA) closed down about 4% on Tuesday, securing their tenth straight day of gains.
The positive moves mean Tesla has recovered all of its losses over the past year, with the stock up around 5% since the start of the year. Shares are also up about 75% since hitting a 52-week low in April.
Analysts have credited the company second quarter vehicle production and delivery figures, which exceeded Wall Street expectations, along with momentum around Tesla’s artificial intelligence business.
“Suddenly the market appreciates Tesla’s growth potential,” Seth Goldstein, equity strategist at Morningstar, told Yahoo Finance. “First quarter deliveries surprised on the negative side, so the market assumed a lower growth rate, which is why we saw the big rally.”
Tesla will report its next quarterly results after the market closes on July 23. It teases the development of more affordable electric vehicles, which investors see as another key catalyst for growth.
But Goldstein said the company will have to set a “solid, concrete timeline” when it comes to rolling out those cars, which the company previously said could happen as early as 2025.
“We need to make sure that this is passed or brought forward sooner so that we can achieve that [Wall Street] I can assume that Tesla will experience a second wave of delivery growth in 2026,” he said. “As long as that story remains intact, I think the stock will do well. But if that gets pushed out or if management sounds more uncertain that that will happen, then I think we could see the shares falter.”
Beyond profits and deliveries, investors will also be looking for another growth opportunity: robotaxis. The company will unveil its highly anticipated robotaxi on August 8.
Tesla shares tumbled in the first half of the year after its fourth-quarter financial report missed on both the top and bottom lines. A 9% year-over-year decline in vehicle deliveries in the first quarter sent shares tumbling further as investors questioned the EV maker’s sky-high valuation and the demand that still existed in the US.
Shortly after the delivery error, the company cut more than 10% of its workforce. At the time, analysts categorized the layoffs as an “ominous sign” of things to come.
Competition abroad from Chinese EV makers, including Lucid (LCID), Li Auto (LI), Nio (NIO), and XPeng (XPEV), has also served as a significant overhang, fueling a price war that forced Tesla to raise prices aggressively lower to compete.
As a result, short sellers have adopted the name, but have now been crushed by the recent rally.
“Short sellers have gone up and down under this name in recent years. It was the No. 1 short in the market. Now it is No. 4 behind… Nvidia, Apple and Microsoft,” Ihor Dusaniwsky of S3 Partners told Yahoo Finance Tuesday. “But these are like the OG shorts. Everyone’s still in them.”
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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