Tesla shares’ winning streak snapped on Wednesday at 13 straight days, but with one drop over the past 14 trading sessions, shares have risen an incredible 40%. However, they are falling again and now it looks like the losing streak will begin.
That losing streak continues depends on why Tesla stock has taken its winning streak. Analysts have few ideas about what drove the gains. The responses lead them to raise their target prices for Tesla (ticker: DSLA ) stock.
“What’s changed on the Street in the past month has been recognition with the Ford and GM supercharger partnerships, and Tesla’s total parts valuation is now finally starting to tap,” Wedbush analyst Dan Ives wrote in a report Wednesday. .
The sum of the parts, or SOTP, rating looks at the different businesses operated by a company, evaluating them individually to see if there is a difference between individual business ratings and a company’s overall rating.
“It reminds us of when the street started to feel fringe narrative and value [
Amazon
Web Services] The growth/edge of the Apple Services story in Amazon and Cupertino,” Ives added.
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Analysts often value AWS separately from Amazon’s retail business. Apple’s valuation has soared as its services business grows, boosting its hardware sales.
Tesla’s other service-like businesses include insurance sales, driver assistance software and EV charging. Tesla, essentially, owns the largest chain of EV “gas stations” in the United States. Both Ford and GM struck deals with their rival to allow their EV drivers to use the Tesla Supercharger network.
The day after Ford’s announcement began a 13-day rally for Tesla stock that took the stock from $182.90 to $258.71. Shares closed Wednesday at $256.79.
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During the run, Ives raised his Tesla price target from $215 to $300 per share. He evaluates the stock purchase. So did Taiwa researcher Jairam Nathan. He raised his Tesla price target to $285 from $185 on Wednesday.
Tesla’s “technology lead [is] “Revenues manifest in opportunity,” Nathan wrote. He projects up to $2 billion in annual charging revenue from Ford Motor ( F ) and General Motors ( GM ) drivers by the end of the decade.
RBC analyst Tom Narayanan also rates Tesla stock a buy, and he raised his price target to $305 from $212 on Thursday. While the Ford and GM deals aren’t responsible for all the increases, Narayan is also focusing on autonomous driving aspects.
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“We are strong believers in robotaxis,” Narayan wrote. “Tesla’s Leading FSD [Full Self-Driving] Software should offset margin dilution from low-cost models and position the company as the software transitions into a business.
Tesla sells its advanced driver-assistance feature, FSD, for $15,000 or a monthly subscription. Tesla plans to advance FSD technology to the point where cars can drive themselves. “Robotaxis could be 70% of Tesla’s value,” Narayan said in his statement.
Tesla is training its FSD systems using company-developed AI, and its CEO Elon Musk told CNBC’s David Faber on May 16 that the company is having its “ChatGPT moment,” meaning people will realize the importance of Tesla’s AI capabilities as FSD cars progress. Can drive themselves.
Musk said in the interview that self-driving AI is a harder problem to solve than creating an artificial intelligence that can write articles on impulse like ChatGPT.
The start of Tesla’s 13-day run coincided with AI chip company Nvidia’s ( NVDA ) second-quarter sales guidance. The AI business is doing better than analysts and investors thought. Nvidia stock is up about 41% over the past 14 trading sessions, beating Tesla by about 1 percentage point.
Tesla shares fell 2.6% in early trading Thursday, heading for a second straight decline.
S&P 500
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Little changed, at the same time
Nasdaq Composite
Reduced by 0.2%.
The average analyst target price for Tesla stock is about $201 per share, up about $9 over the past two days, according to FactSet.
Write to Al Root at [email protected]
