Tesla’s stock saw a significant rebound following its third-quarter earnings report on Wednesday, October 23, which exceeded Wall Street’s expectations. On Thursday, shares surged 22%, and on Friday, they gained 3.3%, closing at $269.19. This marks Tesla’s highest close since September of 2023. The company reported an EPS of $0.72, well above the predicted amount of $0.60. Elon Musk is forecasting a potential delivery growth of up to 30% in 2025, significantly higher than Wall Street’s estimate of about 10%.
The surge in Tesla’s stock price is partly attributed to analysts revising their estimates and price targets upward. For instance, Stifel analyst Stephan Gengaro raised his price target to $287 from $265, and Piper Sandler’s Alexander Potter increased his to $315 from $310, both maintaining a ‘Buy’ rating on the stock. The positive adjustments follow a historical pattern where Tesla’s stock tends to rise following robust earnings reports, driven by heightened analyst expectations and improved investor sentiment.
During an earnings call with investors, CEO Elon Musk highlighted future plans including the production of the newly announced Cybercab expected to enter production by 2026, and more focus on Tesla’s shift towards becoming more of an AI and robotics-focused company. This strategic pivot is essential for maintaining Tesla’s reputation as a leader in innovation, Tesla remains committed to leading the charge in autonomous vehicle technology.
Tesla’s earnings sparked a rally from the rest of the magnificent seven. On Friday, Tesla was up 3% in afternoon trading, Nvidia was up 2.1%, Meta Platforms was close behind with a 1.9% gain, Microsoft, Alphabet and Amazon were all up at least 1%, while Apple was up just under a percent, at 0.9%.
Sources:
Comments