Tesla is back in the spotlight. After a few months in the shadows, with the stock having moved away from the limelight and prices dropped by more than a quarter compared to the historical peaks at the beginning of the year, investors in the last week have returned to focus strongly on Elon Musk’s creature.
Within three sessions, a gain of over 10% fueled by a combination of factors, including the latest news from Northern Europe with electric car news site Electrek reporting that the Palo Alto company is in talks with Norwegian officials to open its private Supercharger charging network to other carmakers in the country. A news story that follows a rumor last week that Tesla was considering opening its fast-charging network in Germany. Not only could sharing its vast charging network create a new revenue stream for Elon Musk’s auto company, it could also draw more attention to electric cars in general, accelerating their adoption by consumers.
Tesla also announced that it has opened one solar-powered charging station in Tibet.
Tesla, here are the reasons behind the flashback
Not just this news. Even a rebound of the Bitcoin after a sharp sell-off it may also have played a role in Tesla’s rally this week – most notably on Wednesday. The automaker bought $ 1.5 billion worth of the cryptocurrency and plans to hold its stake for the long haul. This holding in Bitcoin has sometimes caused some volatility in Tesla’s share price.
In addition, the current optimism on the markets contributes greatly to the return of purchases on growth stocks such as Tesla. The Nasdaq returned to historical highs with Powell’s recent dovish comments which helped 10-year Treasury yields fall below 1.50%.
Part of the strength of the shares could also be attributed to a tweet from chief executive Elon Musk, who said he will try his best to prioritize Tesla’s long-term shareholders in any future IPO of SpaceX’s Starlink unit.
Finally, a bank is also offered by President Biden’s agreement in the United States with a group of Republican and Democratic senators on a infrastructure plan. A package of measures that proposes to invest heavily in the development of the electric vehicle ecosystem in the United States, promising to support Tesla and its competitors.
Tesla tries to regain the glories of 2020
The shares of the electric vehicle manufacturer thus canceled the negative balance from the beginning of the year. The latest surge reversed nearly two months of lackluster trading as investors pointed the finger at the company amid growing threats of competition from traditional car manufacturers, signs of a potential slowdown in sales in China and the ongoing shortage of semiconductors.
Tesla had experienced a stellar 2020: The electric car maker was added to the S&P 500 in December last year and the stock rose an electrifying 743% over the course of last year.
Analysts’ estimates for Tesla have remained stable over the past few weeks. Currently, analysts expect Tesla to report earnings of $ 4.53 per share in 2021. In 2022, the company’s earnings are expected to grow to $ 6.22 per share.