You’re here (TSLA) is looking to take a decisive step above a key resistance level, with the electric vehicle giant gaining provisional approval to introduce fully autonomous driving (FSD) in China after Chief Executive Elon Musk made a surprise visit to the country this weekend. TSLA shares jumped on Monday.
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Wedbush Securities analyst Dan Ives, a longtime Tesla investor, wrote Monday that Musk’s visit to China was a “home run.” Ives added that the Tesla chief’s ability to obtain FSD approval in China is a “defining moment in Tesla’s history.” The Wedbush analyst has a price target of 275 and an outperform rating on Tesla stock.
Tesla will team up with Baidu (BIDU), which will provide access to its map data and provide its lane-level navigation service for FSD, which is not capable of automatic driving.
Meanwhile, Adam Jonas, a leading auto analyst at Morgan Stanley and a Tesla buyer, proclaimed on Monday that it was clear that Musk was entirely focused on the Tesla business.
“Elon Musk’s visit to China means much more than just seeking approval for self-driving technology on Chinese roads,” Jonas wrote Monday. “Whether Tesla’s CEO is sleeping on the ground or on a plane… the message is clear: he’s back.”
Tesla stock jumped 15.2% to 193.89 during market action Monday. On Friday, the stock fell 1% to 168.29. However, since Tesla results and revenues reported for the first quarter Last Tuesday, TSLA shares gained 29%.
“While there are demand challenges in China for Tesla, the Street expects from this painful transition period that a long-term growth story will emerge for Musk & Co., with FSD being a key ingredient in this recipe for success,” Ives added Monday.
Tesla shares: Musk relies entirely on AI
Musk and Tesla have ramped up their rhetoric about fully autonomous driving and AI in recent weeks. That message was on full display during last week’s first-quarter earnings call. The company announced that its free cash flow turned negative to the tune of $2.5 billion in the first quarter as Tesla spent $1 billion on “AI infrastructure” with plans to unveil its robotaxi on the 8th. august.
On Sunday, Musk posted on
“Any company that doesn’t spend at this level and doesn’t do it efficiently cannot be competitive,” Musk said.
Cathie Wood reinforces Tesla’s focus on AI
Musk also endorsed Cathie Wood’s comments via X over the weekend, stating that Tesla is the “greatest AI project on Earth.”
Wood responded to Musk Sunday, writing that she and her Ark Invest funds believe Tesla’s investments in AI “separate it from the automotive and technology packs.”
Wood has long been bullish on Tesla, believing in the long-term value of fully autonomous driving and robotaxi technology. Cathie Wood put money into Tesla as it hovered around a 52-week low heading into first-quarter results. Wood tends to load up on Tesla shares as they hit lows.
The Wall Street Journal reported in early April that investors had withdrawn more than $2 billion from Ark funds in 2024. Woods ARK Innovation ETF (ARKK) has underperformed the S&P 500 over the past two years. Tesla stock is ARKK’s largest holding, with a weighting of 10.95% as of April 29.
“Investors have piled into cash-rich, mega-cap innovation stocks in a crowded trade, and are neglecting pure plays in disruptive innovation that are not part of the mainstream benchmarks,” Wood wrote on Sunday on X “We believe this crowded trade will lead to below-average results.” returns compared to those of small and large cap stocks that are not part of broad benchmarks.
Tesla Stock Performance
Last week, Tesla stock rose 14.4% after hitting a 52-week low of 138.80 on April 22. The stock remains down more than 4% in April.
After recovery after first quarter resultsTesla stock surpassed the resistance at its Monday 10-week moving averageaccording to MarketSurge Analysis.
Tesla has struggled to regain this level for much of 2024. A decisive break through of resistance could be a positive signal. If Tesla stock fails to regain its 10-week line, this downside marker could continue to cap the stock price.
Tesla stock ranks eighth in the 35-member IBD Automotive Manufacturers Industry Group. The stock has a 38 Composite score on a best possible 99. Tesla stock also has an 18 Relative Strength Rating and a 63 EPS rating.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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